This Article Is About The Question Of Are We In Danger Of Another Housing Market Crash:

Many homebuyers are concerned whether we are in danger of another housing market crash. Home prices have been skyrocketing for the past few years. Common sense says prices suddenly skyrocket up then it must come down. Many homebuyers thought the coronavirus outbreak in February 2020 will most likely cause a housing market correction. That did not happen. Instead, home prices kept on going up with no sign of any housing market correction. Many Americans still remember the 2008 housing market crash. Home values have plummeted literally overnight. Millions of homeowners were holding homes that were worth 40% less than their mortgage loan balance. Many homeowners had teaser mortgage rates where their home values dropped in value but their monthly payments went up. Foreclosure rates hit historic highs. Bankruptcies soar to historic highs. Many real estate attorneys changed fields to start bankruptcy cases for clients. Are we in danger of another housing market crash like the 2008 financial crisis?

In this article, we will discuss and cover the topic of are we in danger of another housing market crash.

Are We In Danger Of Another Housing Market Crash And Credit Meltdown In The Near Future?

The housing market has been booming for the past several years. We have not seen a housing market correction for over ten years. Gustan Cho Associates has countless pre-approved borrowers who have been holding off on having a home under contract for over a year due to multiple offers. Homebuyers are buying homes over 10% or higher than the list price. Many of our borrowers at Gustan Cho Associates are waiting for a housing market correction. However, there are no signs of a housing market correction. Home prices keep on increasing. Nobody has a crystal ball. But all indications say there will not be another housing market crash like the 2008 financial crisis. In this article, we will cover the reasons why it is safe to assume homebuyers should not wait for a housing market correction and why it is safe to go ahead and buy a house now before you get priced out of the housing market.

The Coronavirus Outbreak In February 2020

Many analysts and so-called experts predicted a housing market crash after the coronavirus outbreak in February 2020. Unemployment rates have skyrocketed to over 20%, businesses were shut down, mortgage lenders eliminated non-QM loan programs, lenders started implementing lender overlays, and the world was in a panic crisis. There were talks of another Great Recession worse than the 2008 financial crisis and credit meltdown. However, the demand for homes has started climbing and sales prices started skyrocketing. As talk of COVID vaccines progressed and federal stimulus programs such as the CARES ACT were launched, home prices started to climb sharply.

Companies offering remote job positions for their employees enabled many remote workers to relocate to states with affordable housing which caused housing shortages. Tens of thousands of renters in major cities pulled the trigger in buying homes in suburbs. Historic record mortgage rates have added fuel to the fire on the nation’s housing shortage. Renters who were going to purchase homes in a few years pulled the trigger in taking advantage of historic low mortgage rates and start shopping for homes. In the following paragraphs, we will detail why we are not likely to have another housing market crash.

Business Model Changes For Remote Workers

Most companies in the nation have changed their business model by converting many job positions into remote jobs. Wage-earners no longer had to report to a brick and mortar location. This turned out to be a win-win for both the employer and employee. Employers no longer needed to pay high rent to accommodate workers since they were remote employees.

Many renters living in high-priced city apartments to have a short commute distance to work no longer needed to live in the city. Renters can now purchase a home in the suburbs or better yet, relocate to states with affordable housing and low taxes. Renters who had no motivation to purchase a home now changed their minds about becoming homeowners. With historic record low mortgage rates and being able to purchase a home with a yard in the suburbs, countless renters flocked to mortgage companies to get qualified and pre-approved for a mortgage to shop for a home. This is a big difference in circumstances from the 2008 real estate meltdown.

Are We In Danger Of Another Housing Market Crash: The Ability To Repay

After the 2008 real estate and credit meltdown, there were many new regulations implemented. Lenders are very selective in lending to homebuyers. Lenders make sure the borrowers have the ability to repay their new housing payments. Balloon mortgages and teaser rates are no longer legal and considered fraud in residential loan programs. There are hundreds of non-QM loan programs that are geared to help qualified homebuyers who cannot meet government and conventional mortgage guidelines. Self-employed homebuyers can qualify for 12 month bank statement mortgages.

Homebuyers with a recent bankruptcy and/or foreclosure no longer have a mandatory waiting period requirement with our non-QM mortgage program one day out of bankruptcy and foreclosure. Homeowners with equity in their homes can qualify for reverse mortgages where they no longer have to make a mortgage payment. Many homeowners who could not qualify for government and conventional loans  can now qualify for non-QM and alternative mortgages. Dozens of non-QM loans were launched in the past few years. Many homebuyers no longer have to wait the mandatory waiting period after bankruptcy and/or foreclosure. Gustan Cho Associates has non-QM mortgages one day out of bankruptcy and foreclosure with no waiting period with a 30% down payment. Many homebuyers recover and reestablish their credit and are able to qualify for a mortgage without the mandatory waiting period after bankruptcy and/or foreclosure. Gustan Cho Associates offers non-doc mortgages, asset depletion, and bank statement mortgages for self-employed borrowers with no income tax returns required.

Skyrocketing Home Prices With No Sign Of Housing Correction

Home prices have been skyrocketing the past few years. Double digit price increases are scaring many homebuyers. Many homebuyers waiting for a housing correction or price drop are missing out of buying a home. All signs indicate we will not have a housing correction and prices will continue to rise. Homebuyers should act on going ahead and shop for homes and not worry about another housing crash in the near future. Interest rates are expected to rise but still remain at historic lows. Homebuilders are going full blast ahead in building new homes without worries of a housing correction or real estate crash. Multiple offers on a home is the new normal. Mortgage lenders are also lightening up on their lender overlays. More and more lenders have lowered credit score lender overlays to 580 FICO. Gustan Cho Associates has no lender overlays on government and conventional loans. Gustan Cho Associates are mortgage bankers and has the ability to broker non-QM and alternative mortgages. If you are looking to qualify for a mortgage with a mortgage company licensed in multiple states with no lender overlays on government and/or conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.