Are we looking at another housing bubble about to burst?

Absolutely not! When we saw the bubble burst in 2008, (That was hard on everyone in the business), there were a lot of causitive factors that were in place then that are not now. One of those factors was, if you had a pulse, you could get a mortgage an there were many loans out there, particularly the 80/20 ones where people could buy an $800,000 home with little or no money out of pocket. There were many people doing ARMS. They were burned when interest rates and their payments went up. People were actually able to have mortgage notes that were up to 65% of their monthly income. Well guess what? Most of those went into foreclosure. Of course they would. Nobody can pay that amount every month.

Now things are very different. Everyone has to qualify and follow the rules to get a mortgage. Federal laws have eliminated all of the appraisal hocus pocus that went on pre-2008. Mortgage companies look hard at risky debt to income ratios. Back than, there was a glut of houses coming on the market. Now, partially due to still historically low interest rates and new buyers coming onto the scene, we have a shortage. In new construction, builders can’t keep up with the demand. It is unlikely that this will change in the forseable future. There was a study done by NAR that showed that more home owners have more equity than in the past. These people are not going into foreclosure. In the past, if people had none of their own money invested in their homes and something broke, they would just walk away.

Personally, 2021 was my best year ever and 2022 looks even better. Is it a good time to buy? You bet! The people that are hurting are the ones paying this sky high rent. This is another cause of more buyers coming into the market. Unless one has to, it is not prudent to rent anymore. Also a home is probably the best investment out there!

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