Home prices are being driven up with bidding wars again, which can be scary for some buyers. So scary in fact that it may discourage some buyers because they are afraid we are in another housing bubble. The reality though is that WE ARE NOT IN A HOUSING BUBBLE.
Here are 3 reasons why today’s market is totally different than the housing bubble we experienced a little over a decade ago...
- Housing supply is extremely limited. Despite higher mortgage rates, home buying demand remains strong. According to the National Association of Realtors, multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Home owners with historic low rates simply are not moving.
- Homebuyers are more credit worthy. In 2008, when the housing market crashed, mortgage standards were at an all-time low for credit scores and down payment requirements, as well as proving income and assets to purchase. Current guidelines are much stricter, making the borrowers more financially secure.
- Homes have equity. Homeowners were pulling out equity back in 2008, causing many to be upside down. This time around equity levels are extremely high, meaning that homeowners could see values decline slightly without concern.
Reach out anytime to discuss if the timing is right for you to make a move.
Maurice & Rustad: Trust. Experience.