The rapid growth in the economy has made some experts question whether the boom will last or whether we will see another bubble (and then burst) like the one preceding the 2008 housing crisis.
The rapid growth in the economy has made some experts question whether the boom will last or whether we will see another bubble (and then burst) like the one preceding the 2008 housing crisis.
Whether you are a buyer or a seller, the prospect of the housing market crashing is quite unsettling. You do not want to be responsible for an overvalued asset while the economy collapses.
1) Rising Interest Rates and a Greater Number of Houses for Sale
As interest rates continue to rise, this may indicate the impending collapse of the housing market. Several factors, including the current interest rate, contribute to lenders competing against one another to attract buyers.
Housing does not exist in a vacuum, though it may operate independently. Losing a job because of a recession could lead to people being unable to pay their mortgages, and this correlation is inevitable.
We are also likely to see a housing crash when the market begins to expand riskier mortgages and lower credit standards. Easing standards allow low credit quality buyers to make purchases at the exact time house prices are most overpriced.