Many fear that we’re heading for a housing bubble, but are we really?
It’s no secret that our housing market is undergoing a shift. Recent changes like rising inflation and interest rates have many people convinced that we’re either in or headed for a housing bubble. Is that true? I don’t think so. To demonstrate why, let’s compare today’s market to the last housing bubble.
1. The federal government has strengthened lending requirements. In the years leading up to the last housing bubble, many banks were lending to homebuyers who couldn’t pay them back. Nowadays, lending requirements are much stricter, ensuring that the buyers who apply for loans are capable of paying them.
2. Buyers are bringing more money to the table. Homeowners at the time didn’t have nearly as much equity as they do today, which limited their options for buying new homes. The increase in equity they’ve enjoyed since allows today’s sellers to use their equity to submit larger earnest money deposits on their next homes.
If you’re a home seller, speak to a professional about whether or not your circumstances favor a home sale. We still have a shortage of inventory and high demand for homes, so you can still sell your property for top dollar and use your equity to buy a new one.
If you’re a buyer, don’t let rising rates chase you out of the market. A 2% increase in interest rates won’t steal too much buying power away from you. We can put you in touch with a local lender who can help you budget your monthly payments.
Whatever your real estate plans are, now is a great time to act. If you have any questions or need assistance, give us a call or send us an email. We’d love to help you.