Will the Raleigh Housing Market Crash?

Curious about the future of the Raleigh housing market? Many are questioning whether home prices will drop or if the market is headed for a significant downturn. To address these concerns, it’s essential to understand the key factors influencing the Raleigh real estate scene—housing supply, inflation, and Raleigh mortgage rates. These components are critical in shaping the market’s future, and by analyzing them, we can assess whether a crash is likely or if the market will remain resilient amid changes.

There Is Limited Housing Supply… And This Won’t Change Anytime Soon.

According to research from Freddie Mac and the National Association of Realtors, the U.S. faces a housing shortage of between 3 million and 5 million homes. This shortage stems from a decade of under-building, and even with a surge in construction, it will take years—if not decades—for supply to meet demand. As a result, housing supply will likely remain limited for the foreseeable future, particularly in high-demand areas like Raleigh (Triangle Area). With supply outstripping demand, home prices in Raleigh are expected to continue their upward trend, even if the pace of growth slows.

Lower Inflation Doesn’t Equal Lower Prices.

A slowdown in inflation doesn’t mean home prices will fall—it simply means they may rise more gradually. Just as grocery store prices won’t revert to previous lows if inflation drops, housing prices will likely stabilize or increase at a slower pace. If inflation cools, we might see home prices rise by 3% annually instead of the double-digit increases experienced in recent years. However, if Raleigh mortgage rates drop, the demand could surge, pushing home prices higher again. This dynamic suggests that waiting for lower prices could be a gamble.

Elevated Mortgage Rates Have Slowed Price Growth… For Now.

The record-low mortgage rates of 2020 and 2021 were a driving force behind the rapid rise in home prices. Since then, higher mortgage rates have tempered this growth, leading some prospective buyers to delay their home purchases. But with rates beginning to stabilize and even decline slightly, more buyers may reenter the market. If Raleigh mortgage rates fall further, we could see an uptick in demand that pushes prices higher again—potentially erasing any gains from waiting.

The Martini Mortgage Group Bottom Line

While various factors impact the real estate market, a Raleigh housing crash seems unlikely in the near future. With limited supply, ongoing demand, and shifting mortgage rates, home prices may not drop significantly—though the rate of increase could slow. If you’re considering buying or selling, it might be wise to act now before the market heats up once again. To navigate this evolving market and make informed decisions, connect with Raleigh Mortgage Broker Logan Martini or Certified Mortgage Advisor & Raleigh Mortgage Broker Kevin Martini at the Martini Mortgage Group. They can guide you through this dynamic landscape and help you secure the best outcomes for your real estate goals.