A seller’s market. That was the theme that played out across the country from the summer of 2020 into the summer of 2022. Bidding wars erupted across the country as buyers made any concession imaginable—from waiving home inspections to large amounts of cash as earnest money—to seize their dream home in the hyper competitive home-buying market.
How did we get to that stage? According to the U.S. Census Bureau, the housing market stalled in March 2020 due to the COVID pandemic and high unemployment rates. As the country rebounded, mortgage rates dropped, sending many into the home buying market. The depleted inventory drove up home prices, placing many buyers in tight bidding wars.
In late summer 2022, those notions changed. Due to sharp inflation growth and rate increases by the Fed, mortgage rates had risen as high as 7% by fall 2022. Many buyers pulled out of the market as thoughts of the 2008 housing crash played out in their minds.
R – E – L – A – X.
While it is not unreasonable that this thought has emerged, there are some key differences between the two markets to consider.
Key takeaways from the 2008 market compared to now:
Ultimately, no one has a crystal ball to predict what will come of the housing market. Will it bust like the 2008 crash? Will the housing market rebound? What we do know is that history has taught us some valuable lessons, and the coming months and years will likely bring additional insight. Stay tuned!