Some think that with the rapid increase in house prices over the last couple of years that we must be in a housing bubble - one similar to 2008 housing crisis.
Here's 4 key factors that show this time around is different:
(1) RECORD EQUITY
Homeowners today have a lot more skin in the game. In fact, the average amount of home equity in the US is at a record high - $185,000, an increase by almost $48,000 in 2021.
(2) LOW INVENTORY
While we've seen inventory of available homes improve slightly, it's still very low and buyer demand has continued to outpace supply by a wide margin which is another sharp contrast from 2008.
(3) QUALIFIED BUYERS
With larger down payments and stricter lending standards across the board, buyers are far more qualified than the lead up to 2008.
(4) APPRECIATION PROJECTIONS
While the pace of the last two years isn't expected to continue, experts are still projecting home prices to rise by an average of 9% this year - which is historically high!
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Sources:
CoreLogic
Attom
NAR
Federal Reserve