T
he housing market is a topic of great interest, with many wondering if we're on the cusp of a major crash or continued boom. However, data suggests that neither scenario is likely in the immediate future. Instead, we can expect a more moderate path, with some areas experiencing price increases while others may see minor dips.
The rapid growth seen a couple of years ago has cooled down, but this doesn't necessarily mean a crash is imminent. According to the Federal Housing Finance Agency (FHFA), U.S. house prices increased by 4.3% between the third quarter of 2023 and the third quarter of 2024. While this may seem significant, it's a slowdown compared to previous years.
The National Association of Realtors (NAR) reports that existing-home sales climbed 4.8% in November 2024 compared to October, with a median existing-home price of $406,100 - a 4.7% increase from November 2023. CoreLogic forecasts a 2.4% year-over-year increase from October 2024 to October 2025.
Several factors could support the idea that we're headed for a boom: low inventory, consistent demand, and regional differences. However, others argue that affordability issues and cooling demand may lead to a crash. Some metro areas are at risk of price decline over the next 12 months, according to CoreLogic.
After analyzing data and market trends, I believe we're not heading for a crash or boom. Instead, prices will continue to rise at a moderate pace. There's no indication of a speculative bubble, lending standards are stricter than before the 2008 crash, and sellers' power is waning.
The housing market is shifting towards a more balanced environment, with prices still rising but at a slower pace. Demand remains, but it's less frenzied. It's essential to stay informed, do your research, and make decisions that align with your individual circumstances and goals.
In the coming years, we can expect moderate growth, with single-digit price increases in most areas. This is a good time to buy if you're prepared and financially secure, but it's crucial to consider long-term investment strategies and location-specific trends. The bottom line is that the housing market will find a stable and sustainable ground for the coming times.
