Housing Market Today vs. 2008 Crisis: What You Need to Know 🏡

How Today's, Housing Market Differs , From Before the 2008 Crash.<br />High mortgage rates, record inflation and soaring <br />house prices have all contributed to fears that <br />the housing market is heading for a crash.<br />'Newsweek' reports that there are some important <br />differences between the current market and <br />the market heading into the 2008 housing crisis.<br />According to some experts, <br />one of the main differences <br />is current underwriting standards. .<br />During the crisis, there was minimal verification of a borrower's income which led to the prevalence of stated income loans, Ryan O'Loughlin, senior director in <br />Fitch Ratings' RMBS group, via 'Newsweek'.<br />In today's environment, <br />the verification of the actual income <br />and assets is much more rigorous and <br />has to maintain certain thresholds, Ryan O'Loughlin, senior director in <br />Fitch Ratings' RMBS group, via 'Newsweek'.<br />According to 'Newsweek,' another <br />major contributing factor to <br />the 2008 crash was "teaser rates.".<br />During the GFC [Great Financial Crisis],<br />borrowers typically had a much lower <br />payment for the first number of pay <br />periods and then had the payment <br />reset to a higher value, Ryan O'Loughlin, senior director in <br />Fitch Ratings' RMBS group, via 'Newsweek'.<br />This could have been done <br />through interest-only features or <br />artificially low initial interest rates, Ryan O'Loughlin, senior director in <br />Fitch Ratings' RMBS group, via 'Newsweek'.<br />'Newsweek' reports that a third difference is that <br />there is now a "record amount" of equity in <br />the market due to substantial gains in home prices.<br />The amount of borrower equity during <br />the GFC was substantially less than today <br />and when borrowers defaulted, there <br />were forced sales and massive losses, Ryan O'Loughlin, senior director in <br />Fitch Ratings' RMBS group, via 'Newsweek'