Why Aren’t Home Prices Crashing?

When the COVID-19 pandemic hit in early 2020, many experts predicted that the housing market would experience a significant crash. However, nearly two years later, home prices have continued to rise and only recently showing signs of more stable prices. So why aren't home prices crashing? Here are some of the key factors contributing to the current housing market:

1. Limited inventory - The supply of homes for sale is still far below demand, which is driving up prices. Many homeowners are hesitant to sell during the pandemic, which is contributing to the low inventory.
2. Low interest rates - Interest rates remained near historic lows until Q1 of 2023, which means that buyers were able to afford more expensive homes and keep monthly mortgage payments low. Currently we are seeing seller concessions to help buyers bridge the gap between the high home sales prices and increased interest rates in the form of 3-2-1 and 2-1 rate buy-downs as the FED keeps the rates around 7% in an attempt to prevent (or more likely, delay) a recession.
3. Remote work - The rise of remote work has led many buyers to look for larger homes in more affordable areas outside of major cities. This has driven up prices in some suburban and rural areas.
4. Government policies - The government has implemented policies to help support the housing market during the pandemic, such as mortgage forbearance programs and stimulus payments.
5. Strong demand - Despite the pandemic, there is still strong demand for homes from buyers who are looking to take advantage of low interest rates and improve their living situations.

Overall, while there are some factors that may have a negative impact on the housing market, such as the ongoing pandemic and economic uncertainty, there are also many factors that are helping to support the current market. While home prices may not be crashing, it's important to work with a trusted real estate agent who can help you navigate the market and find a home that meets your needs and budget.