A recession doesn't mean a housing crisis! Don't believe what the news is telling you.
The news makes it sound like the sky is falling but what is really happening is the things that happened in the last 2 years are finally calming down. This doesn't mean the real estate market is going to crash! It simply means it's changing. I believe this to be a good thing. More time for more buyers to see homes available and make good sound financial decisions for themselves rather than being forced to make quick decisions that cost them more money than they planned for. This will bring the buyers who walked away from this market back.
There is no real estate "bubble bursting" because of several factors.
We are still suffering from a housing shortage from the last 10 years at a time when Millennials are reaching the prime home buying age. This will keep house prices on the rise. Supply and demand at its best.
In the last 6 recessions housing prices only fell twice. One of these times being 2008 which was a banking crisis from loaning money to people they shouldn't have which caused the crash. The other 4 of the 6 recessions home prices actually increased.
This doesn't mean homes will continue to appreciate at the rate they have the last 2 years. Experts say we are more than likely to see normal rates, around 4-5%, for the next several years. Probably more in high demand /growing areas of the country.
This means that even with the rates above what they have been, it's still a good time to buy if you are a prepared buyer!
According to Dave Ramsey's July 14th Article you are ready to buy a house if you meet these qualifications:
- Debt free
- Have an emergency fund of 3-6 months of bills
- Your monthly house payment will be 25% or less of your monthly take home pay
- You have down payment: 20% preferred but if less know you are going to pay PMI and you need to know what those costs are
- You can pay the closing costs up front
After every recession since the 80's interest rates have gone down. Even with another Fed rate increase looming I think we are where we will be until the "recession" they are telling us we are heading for is over.
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