Despite the current economic climate, it’s unlikely that housing prices will crash anytime soon. This assertion is backed by housing economists, who have identified five reasons why the market is expected to remain stable. These factors include:
Inadequate inventory: Currently, there are not enough houses available to meet the demands of buyers. This constraint on supply keeps prices from falling too steeply.
Lack of new housing construction: New housing construction is not keeping up with demand, which means that there won’t be a glut of homes on the market anytime soon.
Strict lending standards: After the 2008 recession, lending standards became much tighter. This means that only financially stable individuals can qualify for a mortgage loan, which has helped to stabilize the housing market.
Strong buyer demand: There are still a significant number of people who are looking to buy homes, which means that the market has not yet reached saturation.
Decrease in foreclosures: The number of foreclosures has decreased significantly since the height of the recession, which reduces the number of distressed sales and helps to keep housing prices stable.
Overall, while there may be economic uncertainty in the short-term, the housing market is expected to remain stable due to these factors. While there may be small fluctuations in pricing in various markets, a crash is unlikely.