For those keeping a close eye on the housing market, the question of a potential crash is front and center. Despite sky-high prices and climbing mortgage rates, many experts agree: a market crash isn’t on the horizon. Let’s dive into the key factors shaping the current housing landscape and what it means for buyers and sellers.
Home Prices Continue to Rise
After a period of slowing growth in late 2022, many predicted a housing price correction. However, the market surprised everyone: home values began to rise again. According to the S&P CoreLogic Case-Shiller home price index, home prices rose by 4.2% year-over-year in August, marking yet another historic high.
Even with high prices, sales volume has dipped significantly due to limited inventory. Homeowners who locked in historically low mortgage rates during the pandemic are hesitant to sell, further constraining supply. This environment stands in sharp contrast to the Great Recession, when a surplus of distressed properties and loose lending standards led to a catastrophic collapse in prices.
Why a Housing Market Crash is Unlikely
While it’s natural to draw parallels between the current market and past downturns, today’s conditions are fundamentally different. Here’s why:
- Low Inventory: The persistent shortage of homes for sale has kept competition fierce and prices elevated. Without a significant increase in supply, a dramatic price decline is unlikely.
- Tighter Lending Standards: The lessons of the Great Recession led to stricter mortgage lending practices. This has ensured that buyers are more financially stable, reducing the likelihood of widespread defaults.
- Low Foreclosure Rates: According to Lawrence Yun, chief economist at the National Association of Realtors (NAR), both distressed property sales and mortgage defaults are at historic lows. This stability further minimizes the risk of a crash.
Election Impacts on the Housing Market
The 2024 U.S. presidential election has also introduced some uncertainty. With President-elect Donald Trump’s proposed tax cuts and a Republican-controlled Senate, the federal deficit is expected to rise. This could have ripple effects on mortgage rates.
“As the government issues more Treasury bonds to cover rising deficits, bond yields are climbing,” notes Lisa Sturtevant, chief economist at Bright MLS. “Since mortgage rates closely follow 10-year Treasury bond yields, we’re likely to see higher rates in the near future.”
While higher mortgage rates may cool demand slightly, they’re unlikely to result in a significant market correction given the persistent supply-demand imbalance.
What This Means for Buyers and Sellers
For buyers, the combination of high prices and rising rates can feel daunting. However, purchasing a home remains a valuable long-term investment. Sellers, meanwhile, continue to benefit from a strong market, especially if they have desirable properties.
Your Trusted Partner in Real Estate: Amin Vali Real Estate Group
Navigating today’s housing market requires expert guidance and a tailored approach. At Amin Vali Real Estate Group, we’re committed to helping you achieve your real estate goals, whether you’re buying your dream home, selling for top dollar, or investing in the future.
Our team brings unmatched market insights, negotiation expertise, and personalized service to every transaction. Let us turn your real estate aspirations into reality!
📞 Contact Amin Vali Real Estate Group today!
🌐 Visit our website or follow us on social media for the latest market updates and tips.
Your real estate journey deserves a partner you can trust. Choose Amin Vali Real Estate Group — your key to success in any market!
Amin Vali .
B.S in Civil Engineering,MBA, Realtor
Cell phone: +1 (949)220-1000
Phone : +1(310)300-0011
Web : www.aminvali.com
E-mail : amin@aminvali.com
Instagram:aminvali
Instagram: Persianinvest.us
Facebook:amin vali
Realtor in Zutila Inc.
DRE02104474
Southern California Real Estate Investment Blog 