5 Reason Why Home Prices Won't Crash
Posted: October 14, 2023 by Mark L. Corner
I'm surprised how many people I meet through the year that have sold their home in 2021 or 2022 at what they felt was the peak of the housing market, are renting now waiting for housing prices to crash and buy at the low point of the market.
Here are 5 reason why we won't see housing prices crash:
1. Lack of homes for sale. In the Bozeman/Belgrade markets, we only have half of the homes for sale that we did before covid. When home prices declined after the recession of 2008, we had a glut of homes for sale and that is not the case this time.
2. Builders aren't building enough homes. A lot of home builders went out of business after the recession of 2008 and have not been able to catch up with buyer demand since then.
3. Strong buyer demand from the Millennial generation. There are more Millennials now than Baby Boomers making them the largest generation in history. They are coming into their peak home buying years (age 27 - 41) and we are seeing unprecedented home buying demand.
4. Lending standards remain strict. After the recession of 2008, lending standards were tighten up which creates fewer borrows getting behind on their mortgage payments.
5. Foreclosures are almost non-existent these days. After the recession of 2008, foreclosure accounted for 35% of all home sales which helped to drag home prices down.
In the Bozeman/Belgrade markets we have seen softening buyer demand as mortgage rates have increased to 7.6% and some buyers hit the pause button, but home values continue to increase, maybe just not as fast as in 2021 & 2022. Many of us love living here for a smaller town feel and all the outdoor resources we have. Those outdoor resources aren't going away and will continue to keep our area an attractive place to live.