Wealthy Living

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

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

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

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.

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

Reasons to Fear a Fall in Housing Market Prices

1. High Mortgage Rates

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.

2. Inventory Picks Up

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.

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

3. Declining Confidence

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