Slowdown or Bubble?

The headlines today are attention grabbing. Recession, housing bubble, dropping prices. News is designed to get you to watch more news – not educate you. Fear sells. If you look at the data, there is no case to be made for a national bubble or housing crash. Here’s why:

Since 2008, lending standards are much stricter. The exotic programs are gone and there are now better qualified buyers. Foreclosures have been trending down since 2010 – 2.9M in 2010 to 151K in 2021. Today, only 0.4% of homeowners are facing foreclosure and about 91% of these have at least some equity built up. US households own 41 trillion dollars in owner occupied real estate. There is 12 trillion in mortgage debt, leaving 29 trillion in equity. That’s a big number!

Inventory is still historically low. In the US, it is up 27% year-over-year as of Sept. 9^th. Compare this to 2019 where it was 43.2%. In NH, new listings as of Aug., are down 22% and there is only a 1.6 month supply of homes to sell. (A balanced market has a 6 month supply).

Price appreciation is slowing but not depreciating. Experts forecast an avg. gain of 11.3% for home prices in 2022 and 2.5% for 2023. YTD thru Aug., the median sales price in NH is up 14.5% compared to Aug. 2021.

Rates are rising in response to inflation. Over the past 5 recessions, mortgage rates have fallen an avg. of 1.8% from the peak to the trough.

Buyer demand has moderated compared to the frenzy of the last 2 years, however showing activity is still beating pre-pandemic levels. Interest rates will fluctuate, and pricing is all about supply & demand. Housing is traditionally one of the first sectors to slow as the economy softens but is also one of the first to rebound. Don’t let fear stop you from buying or selling today. Contact me to work with a professional to help guide you thru this process.

Contact Donna Forest: 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com

You’ll be moving in the right direction with Better Homes & Gardens Real Estate - The Milestone Team