As home prices continue to rise in the United States, many wonder if there will be an eventual housing market crash similar to the one that occurred during the great recession in the mid 2000’s. Many people that are interested in purchasing a home are not sure if they should buy now, or wait for a housing market decline, however, waiting for the current market to crash may not result in the cheaper outcome you are looking for. If you are interested in purchasing a home in Jacksonville, Florida, and have questions about the best time to purchase a home, North Star Mortgage, Inc. can help. Read on to learn more about current trends in the housing market and if you should buy now or wait to become a homeowner.

The Housing Market Now Vs. The 2000’s Recession

todd-kent-178j8tJrNlc-unsplashThere are certain similarities between the housing market of today and the housing market of the mid-2000’s recession, leading some people to speculate that there may be a decrease in housing prices in the future. Home prices in both markets are and were higher, and in many cases it currently is and was more difficult for buyer’s to purchase a property, however, the causes of the uptick in prices are very different. The mid-2000’s  crash was caused by lenient lending practices and many loan options were approved that many borrowers could not afford to pay back. Currently, the prices are higher due to the lack of supply and demand, so the economic situation is very different from the past recession, and potential homebuyers should not expect the same housing market pricing drop that occurred previously.

Why Are Housing Prices Currently So High?

One of the major reasons for the current high cost of homes is a supply and demand issue; there are not enough homes available for the amount of people that are ready to buy. The limited supply of homes can be attributed to the fact that there haven’t been enough new homes constructed for the demand of people who need them, and prices for labor and supplies have increased since the pandemic. Most of the current housing market consists of existing homes, and this supply is down as well. Many homeowners are opting to renovate their current home rather than selling. Even though homeowners may be tempted to sell because the prices are high, they are hesitant because they would also be facing a tough market since the new home they might buy wouldl also be more expensive. Another reason for the current increase in home prices is that more people are wanting to buy a home, so demand is high.

Should I Buy a Home Now, Or Wait It Out?

Since the circumstances of the current housing market are so different from the crash of the mid-2000s, the housing market is not likely to go down in the near future. If you are interested in buying a home in Jacksonville, Florida, it is advisable to shop around for a suitable deal and continue with your plan to purchase a home sooner rather than waiting for a market crash. Contact North Star Mortgage, Network, Inc. today to help answer your home financing questions.