The market “Chill”…
Don’t let the current market “chill” stop you from buying or selling a home… You don’t need to lose sleep over the next housing crash.
The 2007-2012 housing bust was not normal… In the early-mid 2000’s lenders were giving loans to borrowers with poor credit, unstable employment (if at all), and no asset verification. These borrowers were taking out loans with negative amortization or adjustable rates (ARMS). Many of these ARMS were locked for 2-3 years and then would adjust. Between 2004 and 2006 ARMS were about 35% of all loans. Today ARMS are about 5%. What happened in October 2007 there was a $50 billion adjustment. More than 2 million ARMS jumped to higher rates. Many Americans saw their loan payments jump 25-35%..
Today mortgage lending is much different… You must show proof of employment, bank statements, tax returns, and have good credit to get a loan. The average FICO score in February 2022 was 714.
Home equity is at an all-time high! In the first quarter of 2022 there was $27.8 trillion in home equity. Mortgage leverage is at a record low. In 2007-2012 many borrowers were up-side down in their homes and couldn’t afford them.
Home prices and sales cooling a bit… Don’t believe all the hype and headlines, it’s still a great time to buy or sell a home. Home inventory is relatively low, so prices are not likely to crash.