3 Reasons to STAY in the Market If You're Buying
If you are waiting for the housing market to crash before you jump into the market this video is for you.
Here are 3 reasons why there will NOT be a housing crash in the next few years.
#1: The agency of consumer financial protection just signed into law on June 28 a final ruling stating that Banks cannot start, continue or expedite foreclosures on homeowners unless they were already 120 days late on their mortgage payments before March 2020 when the pandemic hit
The banks have to make a concerted effort to expedite loan modifications and work with all homeowners who elected for forbearance to delay their mortgage payments last year. Banks have to do everything in their power to keep people in their homes and these laws go into effect on August 31, 2021 and run through January 2022. The “wave” of foreclosures you hear about are not coming, the end of the eviction moratorium that is constantly on the news is geared towards renters who have not made their lease payments for the last 18 months. This has a much bigger impact on the commercial sector like the multi family housing market than it does on the residential market.
#2: this market is not similar to the 2004 to 2007 real estate bubble market. cumulative growth in mortgage debt meaning the total amount of new mortgages is up a conservative 6% from just five years ago versus the 65% increase in new mortgage debt that we saw from 2004 the 2007. Lending standards and loan products are just far more conservative and have far more regulatory oversight now than they did during the last bubble.
#3: Home pricing is not going to crash. Now, what goes up cannot go up indefinitely but what that means is that pricing will not continue to increase at its current pace of 8-12% year-over-year.
The National Association of Realtors expects homes to increase in value Around 9% this year 5% next year before leveling off to a more historical norm of 3 to 4% from 2003 through 2025. So it doesn’t mean home prices are going to come crashing down just that they’re going to appreciate at a slower rate. Even though interest rates are expected to creep up they will still remain at historic lows, so if you’re taking yourself out of the market all you’re doing is costing yourself money. We’re not going to see a foreclosure crisis, you’re not going to see a massive drop in pricing, all you’re going to do is end up paying more money. Pricing will be higher than it is today and interest rates will be higher as well which could drastically affect your overall affordability.
Having an experienced Real Estate agent on your side to help you navigate these market conditions is absolutely critical. For any additional clarification or questions please feel free to reach out.