We, along with numerous economists and real estate experts, have been saying this for some time now: today’s market is not reflective of our last housing bubble! Yes, the market was red hot for the better part of two years. And yes, the market is beginning to correct itself.
But Keeping Current Matters wants to squash concerns over impending real estate doom by leaning into the data… So, what separates today’s situation from 2007-2008?
First off, there’s a shortage of housing supply—not a surplus!
Limited supply compared to buyer demand is why experts forecast home prices won’t fall this time.
Next, the mortgage situation looks very different this time around!
The lax standards of yesteryear are gone—along with it, lower rates. That means risky buyers aren’t in the market to the same extent they were last time around.
Finally, we’re nowhere near the number of foreclosures that the country faced in the last bubble burst.
Today, homeowners today are equity rich, not tapped out. In the run-up to the last housing bubble, some homeowners were using their homes as personal ATMs, Keeping Current Matters notes.
Some of those households decided to walk away from their homes, which led to a wave of foreclosures and short sales. Today, prices have risen over the last few years, and that’s given homeowners an equity boost.