Fear the Pain of Housing Market Prices Fall Now: 7 Big Reasons Why

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A housing bubble is when housing prices are unusually high, spurred by high demand and low supply, investor speculation, and irrational spending.

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Several reasons contribute to these bubbles, including increasing economic prosperity, more mortgage product offers, low-interest rates, and easy credit availability.

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The housing bubble ends when demand declines or stagnates – because of increased mortgage rates or inflation eating away at savings – and demand and supply realign. It might lead to a sharp decline in housing market prices.

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What could be the reasons people fear there could be a trend towards a housing market price fall? Read on to understand better.

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Reasons to Fear a Fall in Housing Market Prices

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1. High Mortgage Rates

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According to Freddie Mac, the average 30-year mortgage rate is around 4.67%, the highest since 2018. The anticipation that the Federal Reserve will continue to hike interest rates is the main reason for the increase.

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2. Inventory Picks Up

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The cause of the present housing crisis in the United States is supply and demand and is a similar principle phenomenon that investors see in the opening range at the start of the stock market trading day.

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As stock investors, the more confidence in a stock, the greater the demand but be cautious here and know how to hedge yourself.

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3. Declining Confidence

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