The housing market has been the subject of much criticism in recent years due to high rates, limited affordability and low inventory. Yet, the sector remains one of the strongest of all asset classes and is expected to continue to do well once inflation has subsided. “We think the housing market will do much better than other asset classes,” Max Sylvesteruk (pictured top-left) CEO at A&D Mortgage said in a telephone interview with Mortgage Professional America. “We know that interest rates have been volatile, especially as the Fed tries to lower inflation by raising rates. But even in that scenario, we think that the housing market will continue to do well.”
Residential is, in our perspective, expected to fare significantly better than other sectors, such as bonds, commercial, and industrial, in any given scenario that arises.
The housing sector is outperforming other sectors, according to a recent analysis. While the office market is experiencing diminishing returns in the current economic climate, experts predict that the housing market will fare much better in the long run. Despite potential stress tests, such as interest rate hikes, industry professionals believe that the housing market will remain resilient and behave differently than it did during the 2008 financial crisis. Rebecca Richardson, a prominent figure in the mortgage industry, encourages potential homebuyers not to be deterred by higher mortgage rates and to continue pursuing their dream of homeownership.
Delaying the purchase of a home can become more challenging, even with increased interest rates,” she explained. “This is because postponing homeownership will result in a longer time needed to save for a down payment due to the constant effect of inflation.”
She encourages those interested in purchasing to make the “smart move” despite the impact of inflation.
“Here’s the smart move,” she explained. “Go ahead and buy a house regardless of the current market conditions. You’re going to have housing expenses anyway, so if you consider paying a mortgage, it’s like saving money by force. As time goes by, you’ll accumulate equity, which you can later use to achieve other financial goals or buy your next home.”
She sees homeownership as a way to protect against inflation: “Although we can’t control inflation, we can use it to our advantage,” she stated. “Owning a home can be your secret weapon in building your net worth while still enjoying the comfort of your own space.”
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