Should You Wait For The Housing Market To Crash Before You Buy?

This week I wanted to answer the question, should you wait for the market to crash, the housing market to crash before you buy a home? I’ve done this video before several times over the last couple of years, and my answer is always the same.

No, you should not wait for the market to crash because the likelihood of the market to crash is very, very small right now given the supply problems that we have in housing. There is just far too few homes than there is the demand to buy homes. And not only that, but it’s harder for builders to build homes.

In other words, builders are having a hard time getting the materials they need, getting the labor that they need. The cost of materials is going up. Therefore the cost of building homes is going up as well. This is also adding to upward pressure on home prices. It doesn’t appear that this problem is going to resolve itself anytime soon, especially in markets like Colorado, where there’s a net influx of people every single month looking for housing. We’re seeing in the rental market too. Rental prices are going up. And I apologize for the wind as my camera sways a little bit there. The fact of the matter remains that the supply and demand problem is an issue nationwide. And the demographics also point to more demand as the millennial generation gets to the prime household formation age.

The biggest demographic of people in the United States right now is age 28 to 29. And the ideal household, not the ideal. The average household formation age is age 33. That means that population boom is going to hit in about four years leading to even more demand for housing. The indicators point to the fact that we’re not going to see an alleviation to this problem of not enough housing for the amount of demand anytime soon. And not only that, if you’re waiting for the housing market to crash, it could be a while, and we don’t know what rates are going to do then. Rates could be a lot higher then.

Right now, we still have record low interest rates, which means the overall payment for that same house comparatively is relatively small. Now that being said, housing is a lot higher than it was two years ago, but I’ve been doing this video now for a couple of years with the same message. That it makes sense to buy now. And boy, those of you that listened to the video two years ago and bought a home are sure glad that you did it with the type of appreciation that you’ve seen.

Call me. We can really dive deeper on the numbers, analyze it. We can see if it makes sense now for you with your situation. Because certainly another part of home ownership is you don’t want to bite off more than you can chew. We want to look carefully at that. But as far as relative to where we could be in a year, two years, five years, it makes a ton of sense to look at buying a home right now despite the appreciation we’ve seen in the past couple of years.