Tuesday, December 5, 2023 / by Barb Fessenbecker
3 Myths About Today’s Housing Market
In the ever-changing landscape of the housing market, it's crucial to debunk housing myths that may mislead potential homebuyers. Let's address and clarify three common misconceptions:
Myth #1: Homeowners have low interest rates and will never sell.
Fact: While it’s true that some homeowners have indeed secured low-interest rates in the past, it’s important to remember that life happens and people will always need to move for one reason or another. It could be that the homeowners need to relocate for a job, or growing families need more space, or simply the empty nesters want to downsize to a smaller, more manageable home.
Myth #2: The housing market is going to crash.
Fact: On the contrary, the current market reflects low inventory, leading to more buyers than sellers. Limited supply creates a competitive environment with multiple offers, driving home prices upward.
Another reason is that today’s lending standards are more strict. Prior to 2008, borrowers didn’t need to document their income. Lenders would offer mortgages to just about everyone regardless of their credit score. Unfortunately, many new homeowners took on more than they could afford which led to millions of homeowners having to foreclose. This flooded the housing market with more homes for sale than there were buyers which resulted in the well-known crash of 2008, which remains as one of the most significant events in the history of the housing markets.
Today, most borrowers must have excellent credit to qualify for a mortgage loan and most homeowners now have a comfortable amount of equity built up in their homes which gives them peace of mind to buy again.
Myth #3: You have to put 20% down
Fact: Having little or no down payment does not prevent you from buying a home; however, you will make up for that in a higher interest rate and monthly payment, plus you will need to buy private mortgage insurance (PMI). Some of the available options include FHA loans, USDA loans and VA loans. These options are especially helpful for first time homebuyers. The good news is that you can refinance later on to get better rates and terms.
In conclusion, it's crucial to dispel these common myths surrounding today's housing market. The reality is that market dynamics, lending practices, and financing options have evolved, providing opportunities for diverse homeownership scenarios. If you're prepared to embark on your home-buying journey, Emmer Real Estate is committed to offering guidance and support. Reach out to us today at 262.629.4747, and let's turn your homeownership dreams into reality.
Sources: Homeowner equity data and statistics | Bankrate