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Why We Are Not Headed For A Housing Bubble
Manage episode 333249531 series 3366757
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While I completely understand why everyone’s concerned about a housing bubble, the data shows that we actually are not facing another one right now.
Anytime we start to hear rumors of impending doom, it’s important to go back to the facts. In this episode, we talk through the data we have now and compare it to the data that led up to the housing bubble and the subsequent housing crash of ‘08 -’09.
From my experience, this market in 2022 is unique from anything I’ve seen. The big question I’ve been getting lately is whether housing values will fall and whether there will be a rush of foreclosures on the market.
During the pandemic, lenders were unable to foreclose on homeowners' homes due to moratoriums that prevented them from doing so.
Leading up to the housing crash of 2008, there were few regulations for lenders, and obtaining a home loan was simple for consumers. Things are different now, and there are laws and restrictions as a result of those ‘wild-west’ full-value loans.
Right now, financial institutions are doing a fantastic job of ensuring that homeowners are keeping their debt-to-income ratios within reasonable limits, which further ensures homeowners can afford their homes over time.
Where is the market going? We’re looking at the historical data in order to forecast the upcoming housing market, rates, and inventory. In short, nothing indicates we’re headed toward home values declining.
In this episode, you’ll also hear:
- In times like these, some homeowners choose to downsize and pay off all their debt by selling their homes and “cashing out” on the equity
- How new-build homes typically limit appreciation and why low inventory is causing a steep appreciation in the housing market
- Why demand for Texas homes is higher than the national average
Must-listen moments:
[3:05] Since 1945, home values slid backward one time only, and that was in 2008
[10:45] Mortgage rates have been low for an extended period, which required a smaller percentage of people's income to be spent on housing costs
[14:10] The forecast of the overall house appreciation nationally is 9% and much higher (Houston is facing 15%) for local markets
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Resources mentioned in the episode:
https://www.loanwithjeneducation.com/
https://www.instagram.com/loanwithjen/
https://www.facebook.com/loanwithjen
https://www.youtube.com/channel/UCFrSijIoUv59fxf0hXMro7g
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