Will the real estate market crash in 2022?

A day doesn’t go by without at least one person asking if the real estate market will crash next year. The concern about a crash has people wondering whether they should buy or sell now.

Well, I don’t have a crystal ball, but my 20 years of experience tell me that for every 2006 market, there will be a 2007 market. While no one knows when the crash is going to come, I can tell you what’s going on right now.

“If you don’t currently own a home, I’d suggest that you buy one.”

We have below-normal levels of inventory and high demand due to people moving in from out of state and our interest rates being so low. That makes it cheaper to own a home than to rent in most cases;. Why give money to a landlord if you can put it away for your own future?

I wouldn’t be surprised if we saw more buyers jump into the market soon because the Federal Reserve recently stated that interest rates could rise in 2022, which would cool the market. For every 1% increase in interest rates, buyers’ purchasing power decreases by 10%.

Does that mean the market will crash? Not necessarily; no one knows what’s going to happen. I can say, however, that this is a great market. Prices are still going up, and many people are cashing out their equity and using that money as a down payment on the home they’ll live in for the next seven to 10 years. Doing so now also allows them to lock in a super low interest rate and guarantee the lowest possible monthly payment.

In the end, if you don’t currently own a home, I’d suggest that you buy one. It’s cheaper than renting, and if you want to retire, it’s a good idea to have a home that’s paid off so that you’re not having to make payments in your retirement days.

If you have any questions about today’s topic or anything else to do with real estate, don’t hesitate to give us a call at 602-738-9943, or send an email to jason@thepenroseteam.com. We’d love to help you.