As we move further into the year, the housing market continues to evolve and present both challenges and opportunities for buyers and sellers. Let’s dive in and see what’s currently happening in the world of real estate!
Low Rates During the Pandemic Anchor Stability
During the pandemic, the housing market benefited from low mortgage rates. Many existing mortgages were secured at exceptionally low interest rates, as revealed by data from the Federal Housing Finance Agency. This had two significant effects. Firstly, homeowners were encouraged to stick with their current living arrangements instead of pursuing more expensive options. Secondly, the risk of foreclosure or loan defaults was reduced. Homeowners with favorable rates were more motivated to preserve their homes and make timely payments.
Overall, the availability of low mortgage rates during the pandemic has had a positive impact on homeowners today. This aspect of the housing market has played a crucial role in supporting homeownership and maintaining the stability of the housing sector.
American People Hold Immense Equity
An astonishing finding reveals that approximately two-thirds of homeowners have either paid off their mortgages entirely or accumulated at least 50% equity in their homes. This substantial percentage of equity-rich homeowners acts as a protective barrier against an inundation of distressed properties flooding the market.
Unlike previous market downturns, the current real estate market benefits immensely from this robust homeowner equity, effectively preventing any overwhelming influx of distressed properties. This equity-rich environment is a fundamental pillar supporting the unprecedented strength witnessed in today's real estate market. It plays an indispensable role in upholding its stability and fortitude, as emphasized by the data revealed from the census and ATTOM Data.
Today’s The Most Resilient Market in Our Lifetime
In conclusion, the present housing market exhibits a strong resolve among homeowners to retain the advantageous mortgage rates they secured during the pandemic, along with the existence of significant equity. These elements highlight distinct differences between the current market and the circumstances preceding the 2008 crisis, demonstrating a more secure and accountable housing landscape.
Sources: Keeping Current Matters, Federal Housing Finance Agency & ATTOM Data
