WORTH THE READ
The Housing Market Future
August 12, 2022 - 2 MINUTE READ
With the Federal Reserve sticking to the mandate of taming inflation, we are starting to see a slowdown in the housing market. The increase in interest rates is putting pressure on potential home buyers who plan on taking out a mortgage. After more than 2 years of a seller’s market, we are seeing fewer homes being sold above their asking price.1
Some are concerned about a housing-market crash similar to 2007-2009 but homeowners today have a much stronger financial state than back in 2008. Subprime mortgages were to blame back then, with many buyers getting mortgages they could not financially afford1. The rate of mortgage delinquencies is also low by historical standards.
The last time we saw the US housing market during a period of rising interest rates was during the early 1980’s, with the average rate on a 30-year fixed mortgage in the double digits1. You could also deduct 100% of your mortgage interest back then, with today’s buyers being limited based on their tax status. The big question now is should you make a move now or wait to see what the market does. It really comes back to what your goals are for the next several years. If there is no urgency, it’s usually best to assess your personal situation and make the best decision with a clear head. After all, none of us have a crystal ball into the future.