Worried the housing market is headed for a crash? You aren’t alone.
Two in three Americans think there’ll be a crash in the next few years. But here’s the reality: a crash like we saw in two-thousand-and-eight is far from likely. Here’s why.
Today’s housing market isn’t like it was fifteen years ago. First of all, it was much easier to get a home loan back then. Mortgage standards are tighter now, which means buyers are more qualified.
Second, there are fewer foreclosures happening today. Because buyers are more qualified, homeowners are less likely to default on their loans.
And third, back then, there were far more homes for sale compared to the number of buyers in the market. That’s one reason why home prices dropped. Now, there are too few homes on the market, mainly due to years of underbuilding. And that’s a key reason why home prices are still strong.
When we look at the facts, it’s clear today’s housing market is very different from last time, so there’s no need to fear a crash.