Whatever the current state of affairs for house sellers may appear to be, a look back in history warns us that a housing market crash often follows significant price rises.
Home prices began to soar, reaching new-highs. Soon, mortgage-backed securities were sold off in large volumes, and mortgage defaults and foreclosures rose to record-breaking levels.
As hundreds of thousands of houses went into foreclosure and lenders declared bankruptcy in 2007, the market slowed to a crawl before collapsing totally.
Most experts believe the US will not suffer a collapse on the scale of the 2008 financial crisis. This is due to several factors, including regulatory changes affecting lending processes.However, what practical steps can be taken to protect against a downturn?
To be prepared for emergencies, save enough money to cover three to six months of expenses. You may aim for a larger emergency fund. However, this depends on your comfort level. While trying to be positive, prepare for the worst-case situation.
If you already own a property, consider whether now is the best time to sell.Consider refinancing your current mortgage and take advantage of the present low rates.