Why The Market's Cooling, Not Crashing

Home prices are falling from all-time highs while rising interest rates are making it difficult for some buyers to purchase. This is causing some newcomers to the real estate industry to panic...but there's no reason for this.

Here are three reasons why experts say the market is headed for a correction, not a crash:

Housing inventory levels remain low.

Many homes would need to flood the market to cause a significant price reduction. Beautiful, bright, and updated homes continue to sell quickly while homes that aren't "move in ready" often stay on the market a bit longer.

Home values remain high.

Prices have skyrocketed in the last two years. That means even if prices go down 10-15% they're still up. Ultimately, moving forward there will simply be more negotiation room between buyers and sellers.

Lending standards reduce risk.

Today's real estate lending market is far from the subprime mortgage crisis of 2008. Newer laws, such as the Dodd-Frank Qualified Mortgage and Appraiser Independence Requirements (AIR), have reduced risks for buyers concerned about affordability.

Source: consumeraffairs.com


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