The United States is presently dealing with the issue of an ongoing Debt Ceiling crisis. As the lawmakers and financial experts discuss the potential outcomes of this, a major concern still remains which is regarding the housing market. If a default occurs due to a failure, then there’s going to be a significant amount of increase in the mortgage rates.
In this article, I will be discussing where the housing market is going to crash this year (2024), as a direct result of Debt Ceiling. Keep reading till the end to find out more information about the Debt Ceiling Housing Market!
About Debt Ceiling
The Debt Ceiling indicates the maximum amount of money that the government of the United States is able to borrow to meet various financial obligations. It is also a limit that has been set by the Congress and indicates the total debt that can be accumulated by the government.
After the debt reaches its full limit, Congress needs to take action to raise the ceiling and enable the government to borrow even more funds. An increase of the Debt Ceiling might also have an inverse effect on the reputation of the country in the markets globally
Importance Of Debt Ceiling
The Debt Ceiling Housing Market plays a very crucial role in managing the finances of the nation. It actively serves as a mechanism for controlling the spending of the government, and also ensuring fiscal responsibility. It encourages policymakers to make well-informed decisions about spending by setting budgetary priorities, taxation and spending.
Now you might wonder how Debt Ceiling impacts on Housing Market? Well, if the Debt Ceiling gets affected then there’s going to be an increase in the mortgage rates and property value. The current value of home sales in the USA stands at $348,400. When compared to the status of previous years, this amount has actually increased by 1.1%.
Will The Housing Market Crash In 2024?
The home prices have indeed jumped to great heights in the last few years but the consensus indicates that the housing market is going to see a correction rather than face a crash. As a result of this, a sharp drop is also expected to occur.
Does That Indicate A Recovery Of The Housing Supply In 2024?
The country has had an acute housing supply problem for a long while. For instance, there’s a serious lack of homes out there on the market, and this makes housing inventory even tighter. These sorts of trends might continue as the homeowners who have refinanced or purchased at rock-bottom rates of mortgage are going to stay out to get a foreseeable future.
Another few of the reasons why housing inventory remains tight is because people are now living longer.
Keep reading till the end of the article to find out more information on “ Debt Ceiling Housing Market”!
Housing Markets Are Expensive In Nature
There are a lot of reasons why homeownership is considered to be very expensive in nature. For one, during the time of the pandemic, there was a very high demand for homes which had actively outpaced the limited supply of housing in the market at the time.
The various Home buyers took advantage of this situation to either relocate to remote working conditions or simply relocate. Two of these factors caused a huge inflation in home prices.
All the while, there has also been an active source of income growth which has been duly unable to match the pace of the growth of home price. Hence, aspiring buyers need to use a much larger portion of their earned income to be able to afford a home/property today.
Is The Year 2024 A Good Time For Buying A House?
Whether 2024 is a good time or not for purchasing home properties depends on a lot of different factors like the debt ceiling and housing market, interest rates, regional market conditions, and also economic rates. Even then, it is considered to be a losing game to try timing the market. The best time to buy a home differs from individual to individual and depends more on the financial health of a person.
There are also life goals that you need to consider beforehand as well!
Tip: If you missed out on my answer on Housing Market Debt Ceiling and its impact, then you can go back to give it a read.
What Should Home Buyers Do Then?
Purchasing a home this year (in 2024) might mean that you are staying ahead of the competition as the market is only going to get more crowded when the rates later drop even lower.
However, it would also be a wise decision if you wait. This is so because, in that way, you are going to get way more options to choose from when the supply eventually improves. At the same time waiting out is also going to increase the buyer’s potential for getting better mortgage affordability.
Even though it is hard to say where exactly the home prices and mortgage rates are heading, there are a lot of experts that are going to super-drop this year – even though not as low as they did during the pandemic time.
To Wrap It Up!
If you are thinking about purchasing a house/property this year then it would probably be worthwhile to wait out a bit – though it also differs a lot and depends upon your current life situation and how well your financial capacity to afford it.
Thank you for reading this article up till here. I hope you found the information regarding the “debt ceiling housing market” useful.
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