The media keeps criticizing the housing market, and they won’t stop. They find any bad news about housing and report it and make it sound worse by adding adjectives like “crash” and “soaring.” Unfortunately, it’s hard to trust the media for the truth about anything these days.
Interest rates are elevated from where they were, and home sales are down, mainly due to a lack of available homes. But why doesn’t the media talk about how people who already own homes are making money? Homeowners are seeing the value of their homes continue to increase. It appears that either the media is trying to ruin the housing market or they don’t understand the basic idea of supply and demand.
I’m not trying to make the situation sound better than it is for homebuyers. But the media keeps saying that now is a bad time to buy a home, and that’s just not true. Many people are doing the math and showing that waiting to buy a home will cost more in the long run. The problem is that these numbers can be hard to understand.
Here’s what you need to know if you’re thinking about buying a home:
- Over the last 56 years, home prices have increased an average of 6.88% per year.
- In the last 10 years, home prices have increased by 8.58%.
- Since 1968, there have only been 8 times when home prices went down in a year (yes, only 8 times, and the last one was in 2009).
Some people are saying that home prices will crash by 20–25%. They’re making up these numbers without any real evidence to support it. In 2008, during the Great Recession, home prices only declined by 10.60%. In 2009, they only dropped by an additional 3.50%. This was the worst financial crisis since the Great Depression, and home prices only went down by a total of 14.10%. Today, the economy is strong, and there’s no financial crisis in sight. We might have a recession, or we might not, but there’s no reason to believe there will be a significant housing crash. Sadly, the media gets more viewers by scaring people with sensational headlines instead of showing real numbers.
Everyone thinking about buying a home should understand that there’s a lot of pent-up demand for purchasing a home. Many buyers are waiting for interest rates to go down before they jump back into the market.
So, here’s a question for the media experts who seem to have forgotten about supply and demand. What do you think will happen to home prices when more people want to buy because interest rates are lower? (Just look at what happened during the pandemic when rates dropped.) In 2021 and 2022, home prices went up by a combined total of 34.60%. Also, it is important not to forget all the bidding wars and purchasers who could not get their purchase offer accepted.
I’m not trying to convince you to buy a home right now or tell you not to purchase now. I just wanted to share the real facts about housing. The media doesn’t care about what’s best for you; they only care about getting you to watch their shows. They know that scaring you gets more viewers than educating you.
Vaimberg, Ron. “Weekly Newsletter – January 6, 2023.” Ron Vaimberg International, Ron Vaimberg, 6 Jan. 2023, https://rvionline.thinkific.com/courses/take/rvi-weekly-newsletter/texts/41523497-weekly-newsletter-january-6-2023.