The answer is a “No”.
Today’s Housing Market is not a bubble.
Today’s housing market is nothing like 2006. Back in 2006, foreclosures flooded the market. What about now? The homeowners have a lot of equities, that means they can sell the house before they lose the house.
Two factors Caused the Housing Crash 15 Years Ago
Back in 2006, foreclosures flooded the market. That drove down home values dramatically. Here are the two main reasons for the flood of foreclosures:
- Many purchasers were not truly qualified for the mortgage they obtained
- A number of homeowners cashed in the equity on their homes, using their homes as ATMs. When prices dropped, they found the home was worth less than the mortgage on the house. This situation led to more foreclosures.
Today’s Housing Market Is Nothing like it was in 2006
Demand for homeownership is real and strong.
Back in 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home.
Today, homeowners are much more cautious, purchasers have been facing much higher standards from mortgage companies.
Even the interests rates are getting higher, it’s still affordable for many buyers. They want to own to build their future wealth.
Foreclosures impacting today’s market is not realistic
With much stricter mortgage standards and a historic high level of homeowner equity, the fear of massive foreclosures impacting today’s market is not realistic, it is not happening.
Then, our next question is:
Is Now Even A Good Time To Buy A Home?