This Real Estate Market Is the Strongest of Our Lifetime

This Real Estate Market Is the Strongest of Our Lifetime




When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point. 

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

Contact Patrick Group for more information 248.755.3545

408 East Street Rochester MI 48307

18 Properties
Page 1 of 2
$1,296 / month
Neighborhood: Virginia Park Sub
1
Beds
1
Baths
648
Sq.Ft.
1924
Year Built
1
Day on Site
20240050132
MLS
3
Beds
1F11/2
Baths
1,176
Sq.Ft.
1975
Year Built
4
Days on Site
61050147835
MLS
$225,000
Neighborhood: Northpointe Village Of Chesterfield Condo #817
2
Beds
2
Baths
1,395
Sq.Ft.
2014
Year Built
5
Days on Site
20240048493
MLS
Open 7/14
23040 Rosewood St Oak Park,  MI 48237
$199,999
Neighborhood: Oak Park Sub - Oak Park
3
Beds
1F11/2
Baths
845
Sq.Ft.
1950
Year Built
6
Days on Site
20240048225
MLS
Open 7/13
39479 N Blom Dr Dr Harrison Twp,  MI 48045
$349,900
Neighborhood: Cloverleaf Estates Sub
3
Beds
1F11/2
Baths
1,218
Sq.Ft.
1973
Year Built
15
Days on Site
58050146909
MLS
Open 7/13
2387 Country Club Davison Twp,  MI 48423
$389,999
Neighborhood: Atherton Country Club Estates No 2
4
Beds
2F21/2
Baths
1,768
Sq.Ft.
1992
Year Built
17
Days on Site
20240045452
MLS
$360,000
Neighborhood: Warner Creek Sub
5
Beds
3
Baths
1,426
Sq.Ft.
1988
Year Built
25
Days on Site
20240043033
MLS
$734,900
Neighborhood: Whispering Hills
4
Beds
2F11/2
Baths
3,288
Sq.Ft.
1987
Year Built
28
Days on Site
20240041826
MLS
$39,999
Neighborhood: Kaiser Gardens
2
Beds
1
Baths
652
Sq.Ft.
1938
Year Built
30
Days on Site
20240041664
MLS
$115,000
Neighborhood: Sawyers Keego Harbor Sub
0.18
Acres
30
Days on Site
20240041864
MLS
$229,900
Neighborhood: Scotts Addition
3
Beds
2
Baths
1,380
Sq.Ft.
1950
Year Built
33
Days on Site
20240039338
MLS
$410,000
Neighborhood: Lake Orion Groves Sub - Orion Twp
4
Beds
2
Baths
1,670
Sq.Ft.
1940
Year Built
51
Days on Site
20240035411
MLS

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