When is the housing market going to crash?
Not only is this the No. 1 question my team and I are getting asked by homebuyers and sellers, but that Google search phrase is up 2,450% over the past month. We’re also seeing a lot of Americans seek out explanations as to why the housing market is so hot and why home prices are exploding.
If you remember my last video, I explained why this market is different from the 2008 market. You might be having deja vu, but the fact is that back in 2008 there were a lot of loans approved for people who didn’t need to prove income, assets, or that they even had a job. That’s what primarily caused the last financial collapse. What’s worrying people now is that, as of mid-April, there were roughly 2.3 million homeowners who were still skipping their mortgage payments, according to the Mortgage Bankers Association. I understand this thought process and the PTSD that goes along with it. You might be hearing rumors about a wave of foreclosures primed to hit the market.
I don’t think that’s going to happen, though. The main reason is that we don’t know how many people took out loan forbearances after COVID first hit because they didn’t know what would happen. It’s possible they could’ve afforded their mortgage back then and still can but are regardless in a loan forbearance period.
“The bottom line is, we won’t see a housing market crash anytime soon.”
Also, according to the Consumer Financial Protection Bureau, they recently proposed extending the pause on foreclosures until 2022. This means we’ll see the government step in and help lenders create programs to assist homeowners with staying in their homes. Furthermore, many homeowners—even the ones in forbearance—have a lot of equity in their homes. With home values going up, we’re not seeing the same number of foreclosures and short sales that we would if home values were dropping.
If you’re thinking of buying a home, this means now is the time to make your move. The expectation is that interest rates will start creeping up, which should reduce demand and give inventory a chance to catch up. If you buy now, you can take advantage of home appreciation throughout this year and into 2022. If you’ve already made offers on homes but keep losing out to other buyers with cash offers, give me a call. My team and I can help you formulate a cash offer of your own.
If you’re a seller and you’re afraid you’ll sell without having a home to move into next, we have a solution for you as well: our Buying Before Selling Program. We have a proprietary lender who’ll help you buy your next home with cash so you don’t have to worry about being temporarily homeless. If you have a second house or inherited a property, now’s a great time to sell that too. Prices are high and demand is there, so start the process now before we hit our price ceiling.
The bottom line is, we won’t see a housing market crash anytime soon. Any talking head that suggests we’re in a bubble are just trying to get your attention and create fear. I’m here to help you no matter what your real estate needs are, so feel free to reach out to me so I can put my team’s resources to work for you.
