ARE WE IN A HOUSING BUBBLE?

The media has enjoyed 💂‍♀️ beating the drum 🥁 that home prices are higher than where they were in the last peak in 2006. And many are calling for a housing bubble due to the comparisons and the surge that we have had with home values 🏠

👨‍🏫 But you cannot look at housing prices nominally and just compare the price of today, to 15 years ago.

People buy homes based on the mortgage payment, so you must always factor mortgage rates and increases in household income over 15 years as well 💰💰 in order to have a complete debate about bubble / no bubble.

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a) Since 2006 the average 30-year mortgage rate has FALLEN by over 3% – While Household income is UP 55%;
b) The dramatically lower interest rates and higher income levels mean that homes are MUCH MORE affordable than they were in 2006;
c) If you adjust the home prices, factoring in buying power, the would be 42% BELOW – BELOW the 2006 peak 😲
d) Looking back at 2006, the housing boom was fueled by demand due to wider access to mortgage financing as well. NINJA loans were easy! No Income, No Job, No Assets, no problem!
e) Today’s application is much different – It’s due to the historic supply shortage of homes, strong demographic demand, and traditional mortgage loans having tighter underwriting guidelines.

🎯FOR THESE REASONS – WE DON’T FEEL YOU WILL SEE A BIG BUST, RATHER A SLOWING OF APPRECIATION INTO THE FUTURE, WHICH WOULD BE HEALTHY 🎯

📲 Contact the expert, Stephen Haw, at (310) 503-9886 📲 to discuss how we can help you navigate ahead in today’s real estate market.
www.StephenHaw.com

Call 310.503.9886 or email skh8828(at)gmail(dotted)com for professional guidance from The Stephen Haw Group, your local experts with international connections.