Myths About Today’s Housing Market in El Paso, and How They Hurt Buyers and Sellers

There’s no denying that there are issues with the housing market. For example, homeowners that bought when interest rates were low don’t want to sell and lose their competitive rate, which means there are fewer homes on the market for buyers to choose from. And when you combine that with high home prices and interest rates, many buyers are feeling stuck.

But in the midst of the current challenges, there are myths emerging that are not only untrue, but potentially harmful to buyers and sellers alike.

So what, exactly, are these myths, and, more importantly, what’s the truth?

A recent article from realtor.com dispelled myths about the current housing market, including:

• The market is headed for a 2008-like crash. Many people think that we’re in a real estate bubble, and that the bubble is about to pop, just like it did in 2008. But the truth is, conditions today are nothing like they were in 2008, so predicting a similar crash just isn’t accurate. For example, in 2008, subprime lending was a huge problem, but today, there are much stricter requirements for securing a loan. Also, back in 2008, many homeowners were underwater on their mortgages, but now almost half of homeowners in the US have 50 percent or more equity in their home.
• Owners with good rates will never sell. Many buyers are losing hope that homeowners with a low interest rate on their mortgage will ever sell their homes. But while giving up the historically low rates people were able to secure a few years ago would be difficult, the truth is, many homeowners will, at some point or another, have to move — due to a job relocation or a growing family, for example — and when they do, those homes will go up for sale.
• As rates go up, prices will go down. Many buyers think that interest rates and home prices are directly correlated, and as rates rise, home prices must fall. But that often isn’t true in today’s market, and believing that prices will go down as interest rates rise is a one-way ticket to disappointment. Instead, buyers should work with their real estate agents and lenders to get the best interest rate and home price possible in their area.