7 Reasons to Fear the Pain of Housing Market Prices Fall Now

A housing bubble is when housing prices are unusually high, spurred by high demand and low supply, investor speculation, and irrational spending.

Several reasons contribute to these bubbles, including increasing economic prosperity, more mortgage product offers, low-interest rates, and easy credit availability.

What could be the reasons people fear there could be a trend towards a housing market price fall?

Reasons to Fear a Fall in Housing Market Prices

The hot real estate market can be credited to the stay-at-home and work from anywhere culture of the pandemic.

However, consumers are becoming increasingly concerned that real estate is experiencing a price bubble, which may lead to housing market prices falling.

1. High Mortgage Rates

According to Freddie Mac, the average 30-year mortgage rate is around 4.67%, the highest since 2018. The anticipation that the Federal Reserve will continue to hike interest rates is the main reason for the increase.

2. Inventory Picks Up

The cause of the present housing crisis in the United States is supply and demand and is a similar principle phenomenon that investors see in the opening range at the start of the stock market trading day.