There’s no denying that it’s a tough market, with challenges for both buyers and sellers. But myths and misconceptions floating around about this market and what’s going to happen next aren’t making things any easier.
So what, exactly, are those myths and misconceptions, and why are they incorrect? Here are some of the common myths in today’s housing market that are hurting both buyers and sellers, including:
Myth 1: Owners with low mortgage rates will never sell.
Many buyers that purchased a home a few years ago locked in record low interest rates on their mortgages. And with interest rates significantly higher today, there’s a belief that those homeowners will never give up their low interest rates and sell. But the truth is, there are a ton of life circumstances that could force a person to list and sell their home — like a new job, growing family, or change in their financial situation — no matter what kind of interest rate they have on their mortgage.
Myth 2: As rates go up, home prices will go down.
Many buyers believe that as interest rates rise, home prices will fall — and, as such, they’ve been waiting to make a move until prices are more affordable. But the relationship between interest rates and home prices is impacted by a variety of factors, including demand and available inventory, and the “prices will fall as rates rise” myth just hasn’t been true in this market.
Myth 3: The market is about to crash, just like in 2008.
The prices and fierce competition in today’s market are reminding a lot of people of the conditions right before the 2008 crash. But today’s market lacks the fundamental issues that caused the 2008 crash, including bad lending practices, and the majority of homeowners having little to no equity in their home. The recent rise in prices was driven by completely different factors — including low interest rates and a lack of inventory — making a similar crash highly unlikely.