The one question which nobody seems to ask is – does it matter if house prices fall? If you don’t need to move home and can meet your mortgage repayment commitments, the value of your home, in the short term at least, is immaterial. Even if you have to move house, if the value of your own property has fallen by 10% then the likelihood is that the property you want to buy will have fallen by a similar proportion. For homeowners trading up, falling house prices are a positive advantage. Ultimately, lower house prices will make homes more affordable and bring larger numbers of first-time buyers into the market, many of whom have been priced out. It is also a time when experienced investors look to buy at the right price. When house prices go up, people have the confidence to spend (home improvements, furnishings etc), which keeps the economy going. Falling house prices however, make them much more reluctant to do this.
Tags: house price falls, House prices