Why Today’s Housing Market Isn’t Like 2008
With all the headlines about the shift in the housing market, you might be thinking this is a housing bubble. It’s natural for those thoughts to creep in that make you think it could be a repeat of what took place in 2008. The good news is, there’s concrete data to show why this is nothing like the last time.
For historical context, there were too many homes for sale during the housing crisis and that caused prices to fall dramatically. Supply has increased since the start of this year, but there’s still a shortage of inventory available.
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home.
Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.
Homeowners today also have options they didn’t have in the housing crisis when many people owed more on their mortgages than their homes were worth.
Concrete data and expert insights clearly show why this is nothing like the last time.
