Following the downturn during the height of the COVID-19 pandemic, consumers were eager to get back to buying and wanted to take advantage of historically low-interest rates. 

Mortgage interest rates are holding right around 6% as we near the end of the second quarter of 2022. Since June of 2021, that rate has doubled, but prices remain high, leading to a dramatic drop in home mortgage applications. This may mean that sellers, who until recently were accepting multiple bids, may be forced to lower asking prices and accept lower offers.

Read on as we discuss housing market predictions from some of the top experts in the field for the summer of 2022 and beyond in Washington, DC.

Supply & Demand 

After the housing market crash of 2008, new home construction dropped off quickly, and actually never regained the momentum it needed to keep up with the growing US population. After the initial slump during the pandemic, buyers were suddenly hungry to purchase homes! 

The market became so hot that sellers were taking multiple offers for way over asking price. This pushed home prices up above market values and further drove the market towards an upper limit for consumers.

While home prices were climbing quickly, so was inflation. Unfortunately, the wages of consumers have remained stagnant while the cost of living continues to soar. Seeing this unsustainable dynamic, the federal government stepped in and increased mortgage lending rates to cool off the market.

What Is a Real Estate Bubble?

A real estate bubble happens when the market demand Is high, and buyers bid up home prices. This leads to home prices being artificially inflated. Eventually, the market rebalances, and home prices come back down. This can leave recent borrowers owing more than their home is worth and can leave many people in a financial crisis.

In 2008, the US real estate market saw a crash that followed a similar trajectory as the current one we are in. Many people who remember that crash like to predict that the same thing will happen in 2022, but what do the experts predict?

There are varying opinions on how the current market will wash out throughout the rest of 2022. While many insiders think that the market will remain strong as people rush to buy before interest rates increase, others predict that buyers will back off and wait for interest rates to fall again.

The most popular opinion seems to be that the continued supply and demand issues combined with rising interest rates will successfully stabilize the market and prevent another bubble burst as the US has seen in the past.

What’s Next?

Things have changed significantly since the last time the US saw a real estate market crash, both in the industry and with buyers. What happened in 2008 didn’t go unnoticed by consumers. In fact, it seems to have created a level of discomfort about buying more than they can afford – whether a bank tells them that they can or not.

We can’t predict exactly what will happen but we do know that our real estate team is the best choice to help you in your move. We have had success in getting our clients top dollar for their homes no matter what type of market we are in. We have the systems in place to help you with your most important asset.

Work With Our Team To Have Security 

With so much uncertainty in the market, sellers will want a real estate team that gives them the most security. Our team can give you that security! Not only do we have the experience of navigating our clients in uncertain times, we have our guarantees and programs that give you the comfort to know that we have your back! We will guarantee to sell your home or we will buy it!* Call us now at 202-759-1266 to learn more about this program as well as all the other programs we offer to our sellers!

 

*Conditions Apply. Call for Details.