As home values continue to increase at levels greater than historic norms, some are concerned that we are heading for another crash like the one we experienced ten years ago. We recently explained that the lenient lending standards of the previous decade (which created false demand) no longer exist. Again, today’s lending standards are nowhere near the levels of the boom years. As a matter of fact, they are more stringent than they were even before the boom.

But what about prices?

Are prices appreciating at the same rate that they were prior to the crash of 2006-2008? Let’s look at the numbers as reported by Freddie Mac:

Housing Prices are NOT Heading for Another Crash | MyKCM

The levels of appreciation we have experienced over the last four years aren’t anywhere near the levels that were reached in the four years prior to last decade’s crash.

We must also realize that, to a degree, the current run-up in prices is the market trying to catch up after a crash that dramatically dropped prices for five years.

Bottom Line

It is getting easier to gain financing for a home purchase. And, we are no longer seeing the irresponsible lending that caused the housing crisis. Prices are appreciating at levels greater than historic norms. However, we are not at the levels that led to the housing bubble and bust.

 

This article is not intended to be construed as investment advice from any of the information and/or opinions expressed. Chris Hayes Team – Keller Williams Realty NWLA does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. Individuals should always conduct their own research and due diligence and obtain professional advice before making any investment decision. Chris Hayes Team – Keller Williams Realty NWLA will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.