National Housing Market Update - March 2022

National Housing Market Update - March 2022

I know that everywhere we look, prices are on the rise. From food to gas, we are paying more, and housing costs are not immune to rising prices. But there can be huge benefits to owning a home when other prices are rising. 

Inflation gives homeowners a buffer when prices are on the rise. According to the NAR, as inflation goes up, home price appreciation rises faster. And Investopedia says, "Real estate is one of the time-honored inflation hedges. It is a tangible asset and those tend to hold their value when inflation reigns, unlike paper assets. More specifically, as prices rise, so do property values." In case you haven't heard, homes are certainly increasing in cost right now, but how does that affect you and your decisions?

Well, Forbes put it simply when they said, "Homeowners are shielded from mounting rental prices because their cost is fixed. Regardless of what is happening in the market, they're locked in at that payment at today's cost." In other words, once your mortgage is set, it's usually consistent regardless of other economic impacts. Rising interest rates, inflation, those things do not tend to affect your mortgage payment on a monthly basis. Meanwhile, people paying rent are at the mercy of the market.

Now, how is the market? We're in a bubble, right? Everything's going to burst because that's what happened in 2008. Well, let's take a look at foreclosures.

According to RealtyTrac, just over 90,000 homes across the United States were put into foreclosure in 2021. This number is down 96% from the just over two million that went into foreclosure in 2009. As you can see, we have a very, very different market than the last housing bubble and crash.

So what does this mean to you in simple terms?

Number one, home ownership allows you to weather the storm of economic impact with a consistent monthly payment that's not going to fluctuate.

And number two, we are not in the same market we were in 2006, '7, '8, '9 or '10. It is very, very different today.

And while the market will correct itself at some point in time, it's not going to happen overnight - we have a long way to go. Expect to see continued buyer competition and continued rising prices for the near future.

As always, if you have any questions regarding your unique situation, just reach out; we are always happy to help! Don't forget to follow us on social for more real estate tips and information about the newest listings. Let's talk soon.