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People have been asking us a lot lately if we’re headed towards a housing bubble in Southeastern Michigan. It makes sense why people think that, because prices have gone up dramatically, and are predicted to go up over 5.5% in the U.S. in 2016.
However, just because prices are going up doesn’t mean we are headed towards a bubble. There was a combination of factors that led to the most recent bubble in 2006/2007, including the fact that lending guidelines were very loose. Mortgages aren’t as easy to come by now, and it will remain that way for the foreseeable future.
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Another reason people believe we’re headed towards a bubble is because of the increased home values we’re seeing. In reality, a middle-income household doesn’t need to overstretch their budget to buy a typical home. To qualify for a home, you will likely need to make an income of over $40,000, but payments are still well below what they were in 2005 and even 2000.
There’s an opportunity right now if you choose to take it.
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If you’ve been thinking about buying or selling, now is the time to make a decision. If prices continue to go up, and interest rates go up too, homeownership is only going to get more expensive. There’s an opportunity right now if you choose to take it.
If you have any more questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!
