You might have heard that the housing market is in for a rough ride. Some experts are predicting a massive crash, while others believe things will only get worse before they get better. If you’re worried about your home’s value or if you’re concerned about the stability of the housing market, you’re not alone.
In this article, we’ll look at the predictions of some of the top financial experts. We’ll also explore what this could mean for you â€“ and what you can do to protect yourself from potential damage. So buckle in and let’s take a closer look at the state of the housing market â€“ and what’s to come.
Examining the Warning Signs of an Impending Housing Market Crash
It’s no secret that the housing market is in a bubble.
Experts have been predicting a free-fall in home prices for years, and every month brings fresh evidence that the bubble is only getting bigger. Whether it’s skyrocketing prices in coastal markets or the increasing number of “zombie” homes (abandoned by their owners but still technically in possession of the banks), it’s clear that something is going to give.
And when it does, it could be a brutal crash. So what are the warning signs that you should be watching for?
Here are six of the most troubling indicators, as outlined by some of the top financial minds in the country:
1. Huge increases in housing prices, especially in coastal markets
2. An increase in “zombie” homes
3. The rise of subprime mortgages and other risky lending practices
4. Lagging new home construction
5. The increasing role of foreign investors in the housing market
6. The potential for a global recession
Jeremy Siegel’s Predictions for the US Housing Market
As one of the most respected financial minds in the country, Jeremy Siegel’s predictions about the US housing market are worth paying attention to.
And his latest forecast could be better news for homeowners. According to Siegel, the current bubble in housing prices is about to burst, leading to a free fall in values that could be as bad as the crash of 2008.
If you’re considering buying a home in the near future, it’s best to wait and see how things play out. The current market conditions are ripe for a housing bubble burst, so you could end up losing a lot of money if you buy now.
Paul Krugman Weighs in on a Potential Housing Crisis
“It’s not hard to see why there’s a housing bubble. The same thing that happened in the late 1920s is happening now: there’s a huge influx of capital into the market, because people are looking for a place to invest; this influx of capital is pushing prices up; and at some point it has to reverse.”
-Paul Krugman, Economist and New York Times Columnist
According to some of the world’s most renowned economists, the housing market is in for a brutal free-fall. To brace yourself, it’s important to understand why they think this could happenâ€” and how bad it could get.
For example, Paul Krugman believes that the influx of capital into the market drives up prices and creates the current housing bubble. He also believes that this bubble will eventually burst, causing a massive crash in home prices.
Lawrence Yun’s Take on the Current US Housing Market
Lawrence Yun, the National Association of Realtors’ chief economist, thinks the US housing market is in a massive bubble ready to burst. He pointed out that prices were rising too fast and warned that it was not sustainable.
Yun believes the long-term interest rate could still increase sharply, significantly impacting homebuyer affordability and leading to a rapid price decrease. He also gave an example of what could happen if mortgage rates jumped from 3% to 6%, noting that a typical homebuyer with an annual income of $60,000 would be willing to pay only $320,000 for a house â€“ instead of the $420,000 they could afford at 3%.
Yun thinks there’s still time for the market to correct itself before things get too crazy but noted that â€œhomebuyers and homeowners need to brace themselves for a potential free-fall in prices.â€ He concluded that costs would eventually return to normal levels once they peak and drop back down again.
Harry Dent’s Forecast of a 2020 US Housing Market Collapse
Forecasting expert Harry Dent believes the US housing market is in a massive bubble and is set for a significant crash. In his book “The Sale of a Lifetime,” Dent predicts that home prices will drop by as much as 50% in 2020 alone, with prices continuing to fall over the next few years.
But this isn’t just an American issue: Dent maintains that there will be across-the-board declines in home prices for most of the world’s developed countries as well. He believes that these declines are part of a longer cycle, which he calls â€œThe Great Resetâ€.
Dentâ€™s prediction may sound dire, but it is backed up by data from The Federal Reserve Bank of New York, which found that home prices have outpaced wage growth by an average of 4.3% per year since 2013. This data may indicate an impending collapse of the housing market, which could trigger the beginning of The Great Reset.
What Can Homeowners Do to Protect Themselves During a Potential Market Crash?
The experts have clarified that a crash is coming, and it is time to buckle in. But what can you do to protect yourself if the housing market does take a nosedive?
First, take a look at your finances and review your budget. Are there any expenses you can cut out? Now is the time to do so. Building an emergency fund is another sensible option. The experts recommend having enough money to cover six months of expenses in an emergency.
Next, consider paying off any loans or debts as quickly as possible. This will help you establish financial security and increase your credit score if you need to refinance. And, if you are able, put extra money towards your mortgage payments so thatâ€” in the worst-case scenarioâ€”youâ€™ll at least have equity in your home should you decide to put it on the market.
Finally, consider speaking with a financial advisor for more tailored recommendations for your situation to weather any future economic storms with minimal damage to your bank account or credit rating.
The bottom line is that no one can predict the future, but it’s important to be aware of the warning signs. If you’re considering buying a home, it’s important to do your research and be prepared for a market crash.
If you’re already a homeowner, it’s important to stay informed and be prepared for the possibility of a sharp decline in home values. You can do several things to protect yourself, including diversifying your investments and being careful not to over-leverage your home equity.
The most important thing is to stay informed and be prepared for the future.