Wealthy Living

6 Signs You Should Know That Warn of a Housing Market Crash

The rapid growth in the economy has made some experts question whether the boom will last or whether we will see another bubble (and then burst) like the one preceding the 2008 housing crisis.

A bubble occurs when the value of an asset (in this case, houses) rises beyond its actual value due to speculative demand.

Eventually, bubbles will pop, and investors (in this case, homeowners) lose money when prices fall back to earth, hurting the overall economy.

Signs of Trouble for the Housing Market

1) Rising Interest Rates and a Greater Number of Houses for Sale

As interest rates continue to rise, this may indicate the impending collapse of the housing market. Several factors, including the current interest rate, contribute to lenders competing against one another to attract buyers.

2) Macro Economy Experiencing Pains

Housing markets are intensely local, not simply national, and regional variations can be huge, even within a block. Assess the neighborhood you're looking in at a more micro level.

3) Risky Mortgages are Common in the Market

We are also likely to see a housing market crash when the market begins to expand riskier mortgages and lower credit standards.

Swipe up now to read the full post!