Will Housing Prices Crash in 2022?

The housing market is slowing down. Higher interest rates and sky-high prices have curbed housing demand, and we’ve seen purchase applications and existing home sales both decline (illustrated in the two charts below). Public opinion, and expert opinion, couldn’t be more divided. Some are predicting a housing crash while others strongly believe that housing prices will not decline at all. Experts on both sides are selectively presenting data to tell the story they believe to be true; those calling for a crash point towards the sharp rise in prices, unaffordability, and drop in demand as reasons that housing prices must crash. On the other side of the fence, those that believe prices will not fall point towards a lack of inventory and rarity of housing price declines as reasons to expect prices to continue to rise or stay flat.

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