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Housing Market Crash in 2022 is NOT likely

Since 2019 the market has seen massive demand in homes and soaring housing prices and the pandemic has been of no help. The last year has had an astonishing growth rate in home prices by nearly 20%, which has led to multiple talks of an “inevitable crash” in the market. With skyrocketing home values showing no signs of letting up, some are already predicting a real estate crash this year, some going as far as to say that this will be a redo of the 2008 housing crisis. With the current situation it’s not really out of line to assume an impending real estate market crisis, BUT here are three good reasons why your worst fears isn’t likely to come to fruition:

Home loans aren’t easy to come by

Years leading up to the 2008 market crash there was an unprecedented rise in Subprime mortgages which meant that buyers could obtain mortgages even if they had low credit scores (viewed as credit risks). In fact in the year 2006 alone $375 Billion in loans were given to people with a FICO score under 620. However in 2020 that amount in loans has been reduced to $74 Billion. Recent years have seen a stricter policy in granting home loans and it is extremely difficult for risky borrowers to have a chance at getting a mortgage approval.

Homeowners aren’t tapping into their  home equity

The difference between what you owe on your property and the home’s fair market value is your home’s equity. In recent years homeowners have built up a lot of home equity and some are either  choosing to continue building wealth and not borrow against what they’ve earned or lenders are not allowing them to use all the equity on their home. Going back to 2006 89% of homeowners in America did a cash out refinance loan to tap into their equity as compared to two year ago which only saw 38% use their home’s equity. Simply put, most people have a significant amount of equity sitting inside their homes and very few are upside down in their home’s value given the rise in home values over the last few years. 

There is a shortage in housing

United States home builders have never returned to building the number of homes they built pre- 2008. Since 2008, new home construction has been in a deficit and home builders are not able to add enough new homes to the market.

According to most statistics, the United States has a deficit of over 5 million homes. This deficit isn’t something that can be overcome overnight and it appears it may take decades before our new home inventory creeps up to the level to meet the demand of the number of buyers in our markets.

The real estate market is far from ideal but compared to rougher times it’s in a fairly healthy state. Yes the current market atmosphere is somehow reminiscent of the years leading up to the 2008 market crash but the markets are completely different. Many agents that currently hold their real estate license weren’t licensed during that time and do not have the experience to know the difference in markets. There always seems to be some level of doom-and-gloom in the housing market but there are very few indicators that an impending crash is around the corner. 

So the buyers who are waiting for prices to plummet in 2022 will likely be disappointed. Competition still seems to be increasing and home prices are still rising. What is problematic is the rise of interest rates. So if you are waiting for that crash you may be completely priced out of the market altogether. The best time to buy is right now and I would be happy to talk to you about what you are looking for in your new home. If you’re still on the fence drop me a message and I’d be glad to talk to you about the market. 

Visit to schedule a call or call me at 704 617 0547 to talk soon!

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Ann Rudd

Ann is a 3rd generation real estate professional in her family and has inactive licenses in Maryland and Pennsylvania and is actively licensed in North and South Carolina. Seeing other members of her family help others achieve their home ownership dreams inspired her to become a real estate agent. Helping families is what her job is all about. Whether they are buying a larger home, downsizing, transitioning to a new town or neighborhood, Ann's mission is to make those transitions as smooth as possible.

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