Contrary to the negative media, this is what’s really going on in our market.
Are we in a housing bubble? The media likes to highlight a lot of negativity, which contributes to uncertainty in the market. Today, let’s cut through the red tape and find out what’s really going on in the 2022 real estate market.
Even though interest rates have risen, they’re still historically low. This makes housing much more affordable today than it was in other eras. Inventory is also still low; home builders haven’t been building enough homes since 2008. We’d need around 4 million homes to be built in order for supply to catch up with demand.
“As more families are established, more homes will be purchased.”
Given these conditions, it doesn’t seem like we’re in a housing bubble. Homeowners today are flush with equity in their homes, supply is low, demand is high, and rates are relatively low. Even with lessening demand, supply will likely remain low, and that will keep prices where they are or possibly even return them to a normal rate of appreciation (a healthy market appreciates at a rate of 3% to 5% per year).
Another major factor to consider is the fact that birth rates are up. One of the effects of COVID is that more babies are being born; as more families are established, more homes will be purchased.
If you have any questions about what’s going on in the market or anything to do with real estate, give us a call or send us an email. We’d love to hear from you.
