The real estate market this year has continued to be unfavorable for many prospective homebuyers. Home prices are still increasing, and mortgage rates have risen much faster than was expected. Now that the housing boom is threatened by a potential recession, buyers and homeowners are questioning whether we are headed towards a housing market crash. 

There are signs that the real estate housing market is cooling off, but this cooling is happening on the backs of buyers getting discouraged or buyers being forced out of the market. The growing affordability crisis, driven by the collision of inflation and rising interest rates, is causing many potential buyers to walk away. 

Higher rates also mean higher borrowing costs. A typical mortgage payment is 75% higher today than it was in June 2019, according to a Zillow report. Earnings are not keeping up with these inflated costs either. Where wages grew by 6.7% in June, inflation increased by 9.1%. 

With a large population now approaching the typical home-buying age, unaffordable housing is not a good thing. It does, however, bode well for those buyers still in the market. With fewer buyers, there is more time to find the perfect home with less competition. Homes may be sitting on the market longer and there will be more properties with price reductions. Buyers may also be able to negotiate for a better price which has not been commonplace in this market. 

While the market may be slowing down, inventory is still low and demand remains high. Sellers should not have a hard time selling their homes, they just may need to adjust their expectations slightly. Where home prices are not expected to decrease, but rise at a much slower pace than before, sellers must be content with the notion that they may not get the premium sales price they might be expecting. 

As for home affordability, it is the worst that it’s been since 1989, with the exception of the 2004-2008 housing bubble. Then home values crashed, with disastrous consequences. When the real estate bubble burst, the economy plunged into a deep downturn. Currently, it is unlikely that the housing market will crash in the near future based on market conditions. Trends indicate that we are headed towards a period of slowed growth, but not decline. 

If the market does head for a decline against the projected forecast, analysts speculate that Boston’s housing market is among the least likely to head into a downturn. This is based on several factors such as low percentage price growth in 2021 relative to other metro areas, average loan-to-value rate of 79%, low share of flipped homes, and loss of population.

At Appraisals Unlimited we can answer any outstanding questions you might have about the distinction between these two terms. We also can satisfy all of your residential and commercial real estate appraisal needs. Our large team of appraisers also offers excellent local knowledge of real estate markets and brokers in all the areas we service. Give us a call at 781-449-7600 or email us at to get started.