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2018 No More

Friday, December 7, 2018   /   by June Quilantang

2018 No More


Let's talk about what 2019 has in store for us and eliminate the fears and worries that it would be a repeat of 2018 once and for all. Forecasts and trend reports reveal light at the end of the tunnel; we are truly headed for a more normal average next year.

However, some are seeing these adjustments as red flags and are suggesting that we are headed back to the same challenges we experienced in 2008. Today, let's look at one set of statistics that prove the current market is nothing like the one that preceded the housing crash last decade.

The previous bubble was partially caused by unhealthy levels of mortgage debt. New purchasers were putting down the minimum down payment, resulting in them having little if any equity in their homes.

Existing homeowners were using their homes as ATMs by refinancing and swapping their equity for cash. When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home) so they walked away which caused prices to fall even further.

When this happened, even more homeowners found themselves in negative equity situations which caused them to walk away as well, and so a vicious cycle formed. Today, the equity situation is totally different. According to a new report from ATTOM Data Solutions more than 1-in-4 homes with a mortgage have at least 50% equity. The report explains:

"...nearly 14.5 million U.S. properties were equity rich - where the combined estimated amount of loans secured by the property was 50 percent or less of the property's estimated market value...The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage."

In addition, according to the U.S. Census Bureau, 30.3% of homes in the country have no mortgage on them.
Almost 50% of all homes have at least 50% equity. 
If we take both numbers, the 30.3% of all homes without a mortgage and the 17.9% with at least 50% equity (25.7% of the 69.3% of homes with a mortgage), we realize that 48.2% of all homes in the country have at least 50% equity.

Unlike 2008, almost half of the homeowners in the country are sitting on massive amounts of home equity. They will not be walking away from their homes if the housing market begins to soften.

Reference: http://bit.ly/2SAvJaC

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The data relating to real estate for sale or lease on this web site comes in part from One Key, Inc. Real estate listings held by brokerage firms other than Rummy Dhanoa - eXp Realty - New York Real Estate Experts are marked with the One Key, Inc logo or an abbreviated logo and detailed information about them includes the name of the listing broker.

The information appearing herein has not been verified by One Key, Inc or by any individual(s) who may be affiliated with said entities, all of whom hereby collectively and severally disclaim any and all responsibility for the accuracy of the information appearing at this web site, at any time or from time to time. All such information should be independently verified by the recipient of such data. This data is not warranted for any purpose.

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