The housing market has been on the rise for quite some time now. Just last year, the prices went up by slightly over 6%. But this is a trend that has been continuing for numerous years, and many homes are worth two or three times what they were a decade ago.
Because this increase happened so quickly, some people assume that there must be a crash in the future. Is the housing market about to decline and are those prices going to fall?
The lack of supply
Experts actually do not think that the housing market is going to crash. The problem is not that the prices are inflated, per se, but that there is greater demand than supply. There are more people who need to buy homes than people who are interested in selling them, and not enough new homes have been built to bridge the gap. As long as the supply stays low and more homes do not go on the market, those houses that do go up for sale are going to be much more expensive.
That being said, the interest rates that mortgage borrowers obtain also play a big role in determining how affordable a home seems to them. It has been projected that these interest rates are going to fall in the coming year. This will make it seem like buying a home is more affordable in the future, even if the list price of that home has not gone down.
Whether you are interested in buying a home or a piece of commercial property, understanding the market is critical. Make sure you know what legal steps to take during the transaction.
