Don’t Worry About a Crash—The Housing Market Might Be the Strongest In Our Lifetime
Are you concerned about the current housing market? Many people take one look at the mortgage rates and feel a pit in their stomach, but the Janice Burtis Team is here to tell you why today’s market might be the strongest in our lifetime.
Here are two very important facts to keep in mind.
1. The Mortgage Rate on Existing Homes
While current buyers are unhappy with today’s mortgage rates, it’s important to keep the big picture in mind. The Federal Housing Finance Agency (FHFA) states that 80% of existing mortgages have a rate below 5%. (That’s a lot of mortgages.) But let’s keep going—the FHFA further states that 50% of mortgages have a rate below 4%.
So while it may be difficult for some buyers to accept the current rates, the majority of existing mortgages are locked-in at low rates. Even if there is talk about a potential foreclosure crisis, homeowners have the drive to stay up to date with payments. People will do all they can to make their payments work, because many homeowners cannot afford the rising rent prices.
2. Homeowner Equity
Ready for some more facts? Roughly two-thirds of homeowners have either paid their mortgage or have 50% equity in their current home. (Census and ATTOM) Back in 2008, many people had to walk away from their homes because they owed more than what the home was worth.
However, today’s market has built plenty of equity over the past few years, making today’s homeowners “equity rich.” Because people have earned so much equity and chipped away at their mortgages, they are far more attached to their homes and are willing to work to keep their investment.
We realize the market is complex at the moment—bouncing mortgage rates, shortage of inventory, influx of new-builds. There’s a lot going on, and that’s why we recommend working with an experienced agent who has seen a thing or two in the real estate world. Contact the Janice Burtis Team to find a real estate agent you trust!