The Real Reason Home Prices Don’t Seem to Be Crashing
The real estate market today is quite different from what it was just a few months ago. Mortgage rates have risen dramatically which impacts the borrowing power of home buyers. The frantic pace of the past few years has also slowed with homes staying on the market longer than we saw during the last few years.
With all these changes, many potential homebuyers are wondering when the prices will crash. In other words, when is the right time to buy?
The housing market is affected by supply and demand. With a potentially smaller buyer pool, the assumption would be that home prices would fall to attract the few buyers still looking. But prices are not reacting this way in many markets. In fact, the supply of homes nationwide has stayed relatively small, which in turn has helped prices stay steady.
The fact is that rising interest rates are affecting sellers as well. Most sellers are planning to purchase a replacement property. This means that many sellers are reconsidering their own ability to purchase the desired replacement home. As a result, rather than attempting to capitalize on any lingering seller’s market, many have withdrawn instead, keeping the current inventory low and prices stable.
While it’s difficult to predict the effect of more interest rate hikes on seller’s behavior, homebuyers should concentrate on finding the right property for their needs rather than second guessing the market. It’s always the right time to buy the perfect property.