There’s No Housing Bubble in 2022
Why you don’t need to worry about a housing bubble here in 2022.
Have we entered a housing crash like in 2007? Many people are concerned about the state of the real estate market, and Google searches for terms relating to the “housing bubble” have shot up as a result. However, many experts believe that it’s unlikely we will experience the same bubble as before. Today we’ll share six reasons that will explain why this market is not heading for a crash:
1. Demand outweighs supply.
The number of buyers today far outweighs the number of homes available. This is true for both the local and national markets.
2. Interest rates are still low historically.
The graph at 0:52 in the video shows that our interest rates are still historically low compared to the last five decades.
3. Down payments and equity are stronger than before.
The average down payment is 12% nationwide, but it’s even higher in Northern Colorado. This is unlike 2007, when people put almost zero down regularly. We also have better lending practices now compared to before, and homeowner equity is currently at an all-time high.
4. Rental rates are increasing.
As rental rates increase, many people are buying a home rather than renting, even if interest rates are high.
Why you don’t need to worry about a housing bubble here in 2022.
Have we entered a housing crash like in 2007? Many people are concerned about the state of the real estate market, and Google searches for terms relating to the “housing bubble” have shot up as a result. However, many experts believe that it’s unlikely we will experience the same bubble as before. Today we’ll share six reasons that will explain why this market is not heading for a crash:
1. Demand outweighs supply. The number of buyers today far outweighs the number of homes available. This is true for both the local and national markets.
2. Interest rates are still low historically. The graph at 0:52 in the video shows that our interest rates are still historically low compared to the last five decades.
3. Down payments and equity are stronger than before. The average down payment is 12% nationwide, but it’s even higher in Northern Colorado. This is unlike 2007, when people put almost zero down regularly. We also have better lending practices now compared to before, and homeowner equity is currently at an all-time high.
4. Rental rates are increasing. As rental rates increase, many people are buying a home rather than renting, even if interest rates are high.
5. Economic recession doesn’t equal a housing crisis historically. At 2:07 in the video, you will see a graph that shows how the previous six recessions affected home prices. Home prices actually appreciated in four of these recessions.
6. Fort Collins and Northern Colorado are recession-proof. North Collins real estate market remained strong even during the previous historical recessions. We’ll share more about this topic in our next blog update.
