IS TODAY'S REAL ESTATE MARKET A BUBBLE?
A sizable majority (60%) agreed there is no housing bubble at the moment. According to the same survey, the following factors explain why this year is different from 2008:
The demographics and poor inventory are to blame for the current increase in housing prices.
Due to good underwriting and lending requirements, credit risks are low.
Here's two reasons why:
1. Low Housing Supply Is Driving Up Home Prices
About six months' worth of housing inventory is required to maintain a typical real estate market. Anything more than that is considered an excess and will result in falling pricing. Anything less than that creates a shortage and will cause prices to rise further.
2. Mortgage Lending Standards Today Are Different from the Previous one
Mortgage criteria have changed since the last time because of one factor. Compared to the years prior to the crash, buyers who obtained a mortgage in the last ten years are substantially more qualified.
If you have questions, connect with Your Real Estate Experts to discuss why today’s housing market is nothing like 2008.
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