Is another housing crash looming on the horizon?
About 10 years ago we had a crash in home values. Many people are now hesitant to sell their home and move up to their dream home because they think they might get affected like people were 10 years ago.
The conditions that caused the housing crash of the last decade are not the same as the conditions now. Back then, there was a vast over supply of available housing inventory. Much of this housing inventory was caused by developers building more homes than the market could absorb. This was fueled by the fact that lending standards were relatively nonexistent. It was common to get no income verification loans, negative amortization loans at below-market interest rates, and stated income loans.
These two conditions do not exist anymore. Builders are not over building, if anything they’re not building as much as they should. And the lending standards have been totally tightened up. So the conditions today are not conducive to yet another housing bubble and a massive price correction.
Our housing inventory right now is at a 20-year low. And is not as simple to finance a home. To get a mortgage these days, you actually have to qualify and be able to fit within the federal guidelines to qualify for that mortgage.
So if you’re thinking about selling, remember that the current increase in the home prices is caused by high demand and low supply.
So if you’re thinking of moving up and purchasing your dream home, don’t let today’s market stop you from moving up into your dream home.