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Happy Thanksgiving week!
Over the past week, mortgage rates improved from roughly 6.38% to 6.22% nationally (Mortgage News Daily). That is welcome news for buyers who have been waiting on the sidelines. At the same time, many clients have been asking questions after seeing the latest doom-and-gloom headlines about prices falling and rising foreclosures.
Specifically, a recent Newsweek article gained traction this week with a staggering prediction: a 50% drop in home values within the next 12 months.
It is a scary number for anyone who does not follow the data. It also makes for great clickbait.
The headline is alarming, but once you look more closely at the article, the argument falls apart. There is no meaningful data to support a crash of that magnitude.
The bottom line
Could surprises happen? Every market has uncertainty. But there is no credible evidence pointing to a wave of forced selling or a structural collapse. Most homeowners have very low mortgage rates, strong equity positions, and no financial pressure to sell. As you can see from the Visual Capitalist infographic below that the average rate in California is 4.56%. This is why we are VERY UNLIKELY to see a Real Estate crash soon. 👇
The housing market is not crashing. It is recalibrating. That is what healthy markets are supposed to do.
Feel free to share this insight with clients who are concerned about the headlines. The fundamentals tell a very different and much more reassuring story.
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