The housing market is changing – no doubt. There are a lot of people out there scared that we are entering another mortgage and housing crash, but the economy is in a much different place than we were in 2008-2012.

Housing Caused the Crash

In 2008, 100%+ loans from private mortgage lenders, lending to everyone regardless of their ability to repay and unregulated markets were drivers of the housing crash. Let’s look at a few key stats:

Home Appreciation

Home price appreciation was ridiculous before the bubble. At the high point in 2004, appreciation hit 12.4% and the low point in 2006 was 6.5% appreciation.

Since the housing market crash, appreciation has been on the up tick but at a much more moderate rate. The high point thus far, was in 2017 at 6.4% which is still less than the low point prior to the crash!

The last 2 years have show moderate appreciation at 4.8% and 4.7%. These are much more normal and manageable that pre-crisis.

Mortgage Credit Availability Index

This index is a monthly measure of how difficult it is to secure a mortgage loan. The higher the index, the easier it is to get a mortgage. Pre-crash, the index was at 868.7 – historic highs!

Since then, there has been a re-vamp in the mortgage industry, including much stiffer regulations for appraisers – as well all know! These rules are designed to avoid ever having another housing market bubble or crash.

In March 2020, the index was at 152.1 – significantly lower indicating it is more difficult to get a mortgage loan thanks to regulations and guidelines that have been put in place since the crash. This is a healthy index.

Home Equity

According to studies, 52.8% of Americans have at least 50% equity in their homes today. Compare that to 2008, when lots of American’s owed more than their homes were worth. That’s why they walked away and foreclosures and shortsales were at an all time high.

Today, major mortgage lenders are not anticipating a repeat of foreclosures or shortsales.

Home Inventory

Another cause of the housing market crash was an abundance of homes for sale. Today, we see quite a different story. We have been in a sellers market for a few years because the number of buyers have outpaced the number of homes for sale – basically, not enough inventory to satisfy the demand from buyers or an “undersupply.”


The current economic crisis is driven by an unseen foe – COVID-19 – and is very different than what this country faced in 2008. The housing market is in a much better place today and could actually be what helps bring the economy out of the downturn.

Stay the course! People will always need housing!