With home prices and mortgage rates remaining elevated, many hopeful homebuyers could be hoping for a housing market crash, but some experts say that will unlikely happen soon.
Homes in 91% of the country's housing market remain overvalued, with houses in more than half of these metro areas overvalued by 10% or more. This was caused by an ongoing shortage in the housing market and the steep mortgage rates, which are currently at 6.99% for the 30-year term and 6.29% for the 15-year term, per Freddie Mac.
While hopeful buyers may be hoping for a housing crash, it is unlikely to happen, Kirsten Jordan, a former Bravo star and "Million Dollar Listing" agent, told Fox Business.
"[A housing crash] is yet to be seen because, again, the last time we had a decade of very, very low rates is a time when also people only bought maybe one nice coat, and they had two nice pairs of shoes, and maybe they open their refrigerator and they only had a little bit of food in there because they weren't overconsuming," she said.
Jordan later noted that while a crash is not possible, the housing market also needs to resolve the ongoing inventory shortage for home prices to see a "correction" of anywhere from 5% to 10%.
"What we know is working is location, location, location. Those are the areas where they're still holding prices very, very strong. We're seeing that there's a lack of inventory in the top locations in the U.S. that never had an issue in the first place," she added.
What Other Experts Say
Lawrence Yun, chief economist at the National Association of Realtors, also said a housing market crash is unlikely to happen due to the lack of supply.
"[There's] just simply not enough supply," Yun told Business Insider. "So the economics of supply and demand, if there's a shortage, prices simply cannot crash."
As of July 2023, the country is short between 2.3 million and 6.5 million units, according to Realtor.com.
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