Is Housing Going to Crash Like 2008?
I have been asked by some people if the housing market is going to crash. Well, read on, and this will put your mind at ease.
We all remember the housing crash in 2008. Regardless of actually owning a home! If you’re worried there’s going to be a repeat of what happened back then, there's good news – the housing market now is different from 2008.
One important reason is there need to be more?homes for sale. That means there’s an undersupply, not an oversupply like the last time. For the market to crash, there would have to be too many houses for sale, but the data doesn't show that happening.
Housing supply comes from three main sources:
Here’s a closer look at today's?housing inventory?to understand why this isn’t like 2008.
Homeowners Deciding To Sell Their Houses
Although the housing supply did grow compared to last year, it’s still low. The current months’ supply is below the norm. The graph below shows this more clearly. If you look at the latest?data?(shown in green), compared to 2008 (shown in red), there’s only about a third of that available?inventory?today.
So, what does this mean? There aren't enough homes available to make home values drop. To have a repeat of 2008, there’d need to be a lot more people selling their houses with very few buyers, and that's not happening right now.
Newly Built Homes
People are also talking a lot about what's going on with?newly built?houses these days, and that might make you wonder if homebuilders are overdoing it. The graph below?shows?the number of new houses built over the last 52 years: