The consensus from analysts is that while there may be some signs of a bubble, rather than crashing, the housing market will likely cool over the coming months. The National Association of Realtors predicts a 3% increase in property prices in the coming year.
The Association's Chief Economist, Lawrence Yun, thinks the housing industry will continue to perform well in 2023 and beyond, but he does not anticipate outperforming recent performance.
According to Yun, this year's home price-to-income ratios have been the worst since 2006. He points out, “the situation is very different now.” There are several reasons why real estate investors don't need to fear a housing market crash.
Homebuyers had just 2.4 months of supply in September, according to the National Association of Realtors (NAR). The stockpile was down to just 2.0 months' worth of supplies in February.
Home building slowed down significantly after the last recession and has never fully recovered to pre-2007 levels. Builders can no longer buy land and rapidly secure regulatory permissions to satisfy demand.
Near-Historic Low Mortgage Rates Are Still In Place
Mortgage rates have climbed somewhat since hitting all-time lows in January, but not by much. According to a survey of lenders conducted by Bankrate, the average 30-year loan rate was recently 3.22%. Low-interest rates give homebuyers more sway in the market.