Source: The Ascent —
It’s been a wild couple of years for the housing market. For starters, home values have climbed since the buying boom that started not long after the COVID-19 pandemic hit the U.S. in spring 2020. According to data from the Federal Reserve Bank of St. Louis, the median sale price for an American home in Q2 2020 was $322,600, compared to $454,900 for Q3 2022. That’s a gain of nearly 29%.
Meanwhile, we’ve seen mortgage rates fluctuate from a low of 2.66% for a 30-year fixed-rate mortgage at the end of 2020 to more than double that in 2022. As of this writing, the rate for that 30-year fixed mortgage is 6.58%, per Freddie Mac.
It’s perhaps not so surprising that in November 2022, Zillow got some interesting results in a survey of real estate agents. It sought to find out what misconceptions home sellers and buyers are hanging onto in this market, and what the housing truths actually are. If you’re preparing to wade into the market as either a buyer or a seller, don’t fall for these.
1. Buyers think prices will crash
Nearly half (46%) of agents surveyed noted that many buyers believe the market will crash and home prices will fall in a hurry. This hope is certainly understandable, especially if you’ve ever been a renter longing to buy a place of your own. If all you see are high prices on homes that are far outside the bounds of affordability, you’ll likely wish for prices to fall so you can get on the property ladder sooner rather than later. Unfortunately, this is unlikely to happen.