10 Years After the Crash, the Housing Market Is Bullish, 'Under Control'

November 13, 2017
Rooftops
Photo: Pixabay

Compared to 10 years ago, today's housing market is similarly booming, though with stark differences like tighter lending standards, and historically low inventory.

Passage of the Dodd-Frank Act is one of the most significant factors reshaping mortgage lending. Realtor.com reports that the regulations are contributing to limited construction levels, which in turn influences the housing inventory shortage, keeping prices elevated. Today’s market has only 0.7 single-family household starts per household formation, well below normal construction levels.

“As we compare today’s market dynamics to those of a decade ago, it’s important to remember rising prices didn’t cause the housing crash,” said Danielle Hale, chief economist for realtor.com. “It was rising prices stoked by subprime and low-documentation mortgages, as well as people looking for short-term gains—versus today’s truer market vitality—that created the environment for the crash.”

Read more

Comments

Related Categories

expand_less