If you’re old enough to own a house in America in the 2000s, you’d probably never forget about the 2007-2009 real estate market crash. It was generally caused by imprudent underwriting decisions, low-interest rates, and high home prices. After a decade, America is practically back to the same situation.
According to ValueInsured’s 2017 survey, more than half of respondents in the U.S. fear that a housing bubble is on the horizon. In fact, industry experts have been sharing the same sentiment for years. They don’t think that the soaring property prices could sustain their upward trajectory.
Is America about to face another housing crisis? Maybe, but not soon. Here’s why:
It’s Still a Seller’s Market
For years, the biggest winners of the ongoing real estate market boom are the current homeowners. They’ve been gaining equity and salivating at the opportunity to turn it into cash. If you’re one of them, now is the best time to refinance your mortgage in Salt Lake City, St. Louis, and other hot markets. Despite the unwavering home price increases, the numbers are still far from the 2006 peak.
Underwater Mortgage Trauma is Still Fresh
After the horrors of the previous recession, home-buyers are smart enough not to remake the mistakes of the pasts. Even Millennials have plenty of online literature useful for exercising due diligence and preventing history from repeating itself.
Lenders Know Better
While some mortgage providers are beginning to bend financing to help first-time buyers, it’s not plausible to see no-money-down loans for the years to come. Banks absorbed insane losses from the last crisis and spent years licking their wounds.
Whatever the state of the housing market is, you should be logical every step of the way. The prospect of crossing home ownership off your checklist is an emotional experience, but you can’t be impulsive when making your biggest purchase of your life.