3 Things That Are Not Going To Happen in Today's Housing Market

Theres a lot of uncertainty right now and thats leading to some dramatic headlines. And if youre thinking about buying a home, that can make you feel a little less sure about your decision.

A recent study by CNBC asked homebuyers what theyre most worried about, and three themes kept coming up again and again:

• Mortgage rates
• The number of homes for sale
• Home prices

But a lot of what you may be hearing on those is based more on misconceptions. Not facts. So, lets break it down and separate fact from fiction.

Misconception #1: Ill Just Wait, Because Mortgage Rates Are Going To Fall Dramatically

One idea doing its rounds on social is that mortgage rates are going to drop dramatically soon. So, its better to wait to buy.

But is that really whats expected?

While mortgage rates have come down a bit in the last few weeks, forecasts dont show a major drop ahead. The most likely scenario is that rates stay somewhere in the low 6% range this year.

And thats not a big change from where rates are now (see graph below):

Of course, this depends on where inflation and the economy go from here. But, based on what we know today, waiting for a big drop in rates may not work out the way some people hope. As U.S. News explains:

Mortgage rates aren't expected to change much over the next several quarters . . .

Not to mention, even with rates where they are today, its already more affordable than a year ago. So, even if they dont change much, its still better than it was.

Misconception #2: "There Are Too Many Homes for Sale Right Now

Youve probably heard inventory is up. And nationally, it is. The number of homes for sale is 8% higher than this time last year. But that's not a bad thing. In fact, its one of the reasons buyers have a bit more breathing room right now.

The problem is the headlines are making something good, sound bad. Theyre focusing on how this is the most inventory weve had since 2019 or how many homes builders are building. And that can make it sound like the number of homes for sale is rising too far, too fast.

But thats not what the bigger picture shows.

Data from Realtor.com proves that, even though inventory is up compared to last year, its still nearly 14% lower than it was during the last normal housing market (2017-2019):

While it can vary a lot based on where you live, only 9 states have more inventory than pre-pandemic today. Thats a key reason why there still arent enough homes for sale to trigger something like the crash back in 2008.

Misconception #3: Home Prices Are About To Crash

Youve probably seen this one, too. The confusion is coming from the fact that some metros are experiencing slight price declines. And influencers are running with that and saying prices are crashing. But thats not the reality.

Most areas are seeing prices rise, not fall. And thats because:

• Many homeowners arent selling because they dont want to give up the low mortgage rate they locked in a few years ago. And thats keeping a lid on how much inventory can grow.
• Since inventory is still below pre-pandemic norms, there arent enough homes for sale to cause a price crash.
• And even in markets with more inventory, some sellers are choosing to pull their homes off the market instead of cutting prices.

And those are 3 big reasons prices arent headed for a crash.

And even in the markets experiencing mild declines, the drops arent enough to cancel out the big gains most homeowners have seen in the last 5 years (see graph below):

Thats not a crash. Thats just prices moderating after a few record-breaking years.

Bottom Line

Online posts are going to make things sound worse than they are. If you want a true, data-bound look at whats really happening in todays market, lean on a real estate agent.

Connect with a local agent so you have someone to separate fact from fiction today.