As the world navigates through unprecedented times during the COVID-19 pandemic, many people are wondering if there will be another housing market crash. While it’s natural to be concerned, Greyhound Real Estate is here to provide some clarity. The reality is that we won’t see a housing crash as we did in 2008.
Improved Lending
There are several reasons for this. Firstly, lending guidelines are now more qualified than they were in the past. Lenders are more cautious and have stricter lending criteria, meaning that borrowers will likely have a stronger ability to repay their mortgages. This reduces the risk of defaulting on a loan, which was one of the major contributors to the 2008 crash.
House Production Factor
Another factor that mitigates the chances of a housing market crash is lower house production. Over the past few years, the rate of housing production has declined, which has kept the supply of homes relatively low. This has, in turn, kept prices from plummeting, as there’s still a high demand for housing. In addition to lower house production, the current market has a robust housing industry, with real estate sales remaining steady throughout the pandemic.
Interest Rates Are A Contributor
The economy also plays a significant role in the health of the housing market. The improved economy ensures steady interest rates, which contribute to stable financing options for potential buyers. The risk of foreclosure has also been reduced as more individuals are consistently finding work, and unemployment rates are decreasing over time.
We Are In A Solid House Market
In summary, based on qualified lending guidelines, lower house production, and a solid housing market, it’s unlikely we will experience another housing market crash like in 2008. Despite the economic uncertainty caused by the pandemic, optimistic projections for the future of the housing industry can provide ample assurance for those looking to invest in real estate.
As a marketer in this industry, it’s important to us to communicate factual information to our clients and encourage you to stay informed by sharing valuable blog posts or social media updates from Greyhound Estate. Contact our team if you are interested in selling or buying.