Why Today’s Housing Market Isn’t Headed for a Crash | MyKCM

Today's housing market isn't headed for a crash due to a variety of factors. These include low interest rates, a positive economic outlook, an influx of new buyers, and a shortage of properties on the market. Low interest rates are helping to keep borrowing costs low and making it easier to obtain a mortgage. This has spurred an increase in demand for housing, leading to higher prices. At the same time, an influx of new buyers, particularly millennials, has increased the number of people looking to purchase homes, further driving up prices. Finally, a shortage of properties on the market has further pushed up prices as buyers compete for limited supply. All of these factors are helping to keep the housing market stable and not headed for a crash.

Back Then, Mortgage Standards Were Less Strict

In the past, mortgage standards were less strict than they are now. Lenders were more willing to provide loans to borrowers who had poor credit and little to no income verification. This allowed many unqualified buyers to obtain financing, driving up demand and driving up prices. However, today, lenders are more stringent when it comes to loan requirements. They are only willing to provide financing to borrowers who have good credit and can demonstrate that they have the capacity to pay back the loan. This has helped to ensure that only qualified buyers are able to purchase a home, helping to keep the housing market stable.

Foreclosure Volume Has Declined a Lot Since the Crash

Foreclosure volume has also declined a lot since the crash. During the housing crisis, foreclosures were common as many borrowers were unable to keep up with their mortgage payments. This drove down prices and further contributed to the crash. However, since then, foreclosure volume has declined significantly. This is due in part to the stricter lending standards now in place, as well as the stronger economy. As a result, foreclosures are no longer as common, helping to keep prices stable and preventing a crash.

The Supply of Homes for Sale Today Is More Limited

 The supply of homes for sale today is also more limited than it was before the crash. This is due to a variety of factors, such as the preference of many homeowners to stay in their current homes rather than move, as well as a shortage of new construction. This has led to fewer homes being available on the market, which in turn has helped to keep prices high. All of these factors have helped to create a stable housing market and prevent a crash.

Bottom Line

If recent headlines have you worried we’re headed for another housing crash, the data above should help ease those fears. Expert insights and the most current data clearly show that today’s market is nothing like it was last time.