{"id":8655,"date":"2023-05-09T06:30:00","date_gmt":"2023-05-09T10:30:00","guid":{"rendered":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=8655"},"modified":"2023-05-09T06:30:00","modified_gmt":"2023-05-09T10:30:00","slug":"why-todays-housing-market-is-not-about-to-crash","status":"publish","type":"post","link":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=8655","title":{"rendered":"Why Today\u2019s Housing Market Is Not About To Crash"},"content":{"rendered":"
\"Why<\/p>\n

There\u2019s been some concern lately that the housing market is headed for a crash. And given some of the affordability<\/a> challenges in the housing market, along with a lot of recession<\/a> talk in the media, it\u2019s easy enough to understand why that worry has come up.<\/p>\n

But the data clearly shows today\u2019s market is very different than it was before the housing crash in 2008. Rest assured, this isn\u2019t a repeat of what happened back then. Here\u2019s why.<\/strong><\/p>\n

It\u2019s Harder To Get a Loan Now<\/strong><\/h4>\n

It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different\u00a0lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, 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.<\/p>\n

Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses data<\/a> from the Mortgage Bankers Association<\/em> (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.<\/p>\n

<\/a>Unemployment Recovered Faster This Time<\/strong><\/h4>\n

While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below<\/em>). Things were different during the Great Recession as a large number of people stayed unemployed<\/a> for a much longer period of time (see the red in the graph below<\/em>):<\/p>\n

<\/a><\/p>\n

Here\u2019s how the quick job recovery this time helps the housing market. Because so many people are employed today, there\u2019s less risk of homeowners facing hardship and defaulting on their loans. This helps put today\u2019s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.<\/p>\n

There Are Far Fewer Homes for Sale Today<\/strong><\/h4>\n

There were also too many homes for sale during the housing crisis (many of which were short sales and foreclosures<\/a>), and that caused prices to fall dramatically.\u00a0Today, there\u2019s a\u00a0shortage of inventory\u00a0available overall, primarily due to years of underbuilding homes.<\/p>\n

The graph below uses\u00a0data\u00a0from the\u00a0<\/em>National Association of Realtors<\/em><\/a>\u00a0(NAR) and the Federal Reserve<\/em><\/a> to show how the months\u2019 supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months\u2019 supply. There just isn\u2019t enough inventory on the market for\u00a0home prices\u00a0to come crashing down like they did in 2008.<\/p>\n

<\/a><\/p>\n

Equity Levels Are Near Record Highs<\/strong><\/h4>\n

That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below<\/em>):<\/p>\n

<\/a><\/p>\n

And, that equity puts them in a much stronger position compared<\/a> to the Great Recession. Molly Boesel, Principal Economist at CoreLogic<\/em>, explains<\/a>:\u00a0<\/p>\n

\u201c<\/em>Most homeowners are well positioned to weather a shallow recession. <\/em><\/strong>More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.\u201d<\/em><\/p><\/blockquote>\n

SBottom Line<\/h3>\n

The graphs above should ease any fears you may have that today\u2019s housing market is headed for a crash. The most current data clearly shows that today\u2019s market is nothing like it was last time.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\"Why<\/p>\n

There\u2019s been some concern lately that the housing market is headed for a crash.<\/span><\/p>\n<\/div>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"bgseo_title":"","bgseo_description":"","bgseo_robots_index":"","bgseo_robots_follow":"","footnotes":""},"categories":[3,84,85,10,86],"tags":[],"class_list":["post-8655","post","type-post","status-publish","format-standard","hentry","category-blog","category-for-buyers","category-for-sellers","category-foreclosures","category-housing-market-updates"],"_links":{"self":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/8655","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8655"}],"version-history":[{"count":0,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/8655\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}