There have been quite a few comparisons of today's real estate market to the tumultuous 2008 market. Here are 4 reasons today’s market is stronger positioned than it was prior to the 2008 crash, and why it is unlikely to crash.
1. Today’s market regulations are much stricter as a result of the 2008 meltdown, putting borrowers on a more sure footing. In the US today, average FICO scores are higher by 52+ points on average than they were in 2008.
2. Homeowners have excellent equity today. In 2022, tappable equity hit a record high of $11 trillion which is a 34% increase from last year.
3. Mortgage debt to home value is the lowest average on record in the US. Current homeowners' mortgage debt is now on average 43% of the value of the home. Negative equity is virtually nonexistent whereas in 2011 25% of borrowers were underwater on their mortgages. Now just 2.5% of borrowers have less than 10% equity in their homes.
4. Mortgage delinquencies are at a record low with just under 3% past due.
In summary, while it is not a buyer's market it is the best opportunity buyers have had in the last 9 years for a buyer to negotiate favorable terms and pricing.
In our opinion, we are now transitioning into a more normal, balanced real estate market, but it is more imperative than ever to have an experienced agent on your side to be your trusted advisor to guide you through the process. Let us help.