Many homeowners are still haunted by the 2008 housing crash when property values collapsed and foreclosures spiked. NAR Chief Economist Lawrence Yun offered assurance that current dynamics are nothing like during the Great Recession. He pointed to several key indicators of how this market differs.
☑️ The labor market remains strong.
☑️ Less risky loans. Yun also noted the subprime loans that were prevalent during the 2008 housing bust are basically nonexistent today.
☑️ Underbuilding and inventory shortages.
☑️ Delinquency lows. About 10% of all mortgage borrowers were delinquent on their loans in the previous housing bust. The mortgage delinquency rate is now at 3.6%, holding at historical lows.
☑️ Ultra-low foreclosure rates. Homes in foreclosure reached a rate of 4.6% during the last housing crash as homeowners who saw their property values plunge walked away from their loans. Today, the percentage of homes in foreclosure is 0.6%—also at historical lows.
While home sales are slowing, prices remain up nearly 6% as of October sales numbers compared to a year ago. Also, inventory remains low, which will keep home prices elevated, Yun said. “The chance of a price crash is very small due to the lack of supply.”
#RealEstate #RealEstateMarket #Business
Elevate Your Real Estate Game. Sign Up Now – No Credit Card Needed.Start for Free