The three graphs shown here tell the story of why we shouldn't see a repeat of the housing crash of 2008.
1. Due to so many people buying homes in the last few years at <3% interest rates, and most of the rest of us refinancing to the same rates, people aren't selling their homes only to replace them with 6-7% interest rates. So people are staying put and there is a lack of inventory
2. There isn't a “fog a mirror, get a loan” mentality like in 2006, loans are hard to get and have been for 10 years now. So very few people are overleveraged.
3. As a result of 2 above, and the fact that equity in American homes is at a modern day high where over 50% have more than 50% equity in their homes, even if you HAVE to sell, it wont be a foreclosure because the owner has so much of their own money above and beyond the mortgage balance. So the market wont be flooded with short sales and bank owned homes driving down the prices.
4.Despite what you hear about all Californians moving to Texas, we have a lot coming here. The in-migration for the next 20-50 years from many states, but especially from California is expected to continue to be strong.
For these reasons and more we don’t expect a crash, but we DO expect prices to stabilize to the seasonal norms. The crazy increases we have had the last few years we all knew weren't sustainable and most experts say when inflation is under control, mortgage rates will come down more.
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