Let’s talk about the current housing market, shall we? You might have heard some worrying rumors about a possible crash in the housing market, but I’m here to assure you that it’s not the case. Here are three reasons why you can feel more at ease:
Mortgage Standards Have Tightened
First, let’s look back at the 2008 housing market crash. One of the main culprits was the easy mortgage standards that allowed people to take on more debt than they could afford. These “subprime” mortgages contributed to the housing market’s downfall. However, things have changed since then. Mortgage standards have become more strict, requiring lenders to do a thorough analysis of a borrower’s ability to repay the loan. This means that borrowers are less likely to default and face foreclosure.
A Drop In Foreclosure Volume Since the Crash
Speaking of foreclosure, the second reason why today’s housing market is more stable is that foreclosure volume has significantly decreased since the crash. In the years leading up to the crash, the number of foreclosures was on the rise. However, things have improved a lot since then. The housing market has made an incredible recovery, with the number of foreclosures dropping dramatically. Overall, the housing market is now much more stable than it was in the past.
Smaller Supply Than in 2008
Finally, the supply of homes for sale today is more limited than it was during the last housing market crash. Back in 2008, there was an oversupply of homes on the market, which resulted in a drop in home prices. However, today’s housing market is dealing with a different problem. There aren’t enough homes for sale to meet the current demand, and this scarcity is driving up home prices. This makes it harder for first-time homebuyers to enter the market, but it also means that the market is less likely to experience a crash.
To sum it up, while there may be some concerns about the housing market, it’s important to remember that the current market is different from the one that led to the 2008 crash. Mortgage standards are stricter, foreclosure volumes have decreased, and the supply of homes for sale is more limited. These factors, along with a healthy economy and strong demand for housing, suggest that the housing market is in a good place and not headed for a crash. So, if you’re thinking about buying a home, now might be a great time to do so!