Ten Charts that Show Why We're Not Heading for a Housing Bubble
During the pandemic, it was feared that the large number of borrowers in forbearance would eventually result in tide of foreclosures that would take the down the housing market. The following chart shows that those fears were unfounded.
Chart #2 shows that 81.6% of the borrowers in forbearance have successfully exited.
Chart #3 shows that the crazy loan products (red graph) that existed in the late 90's to the mid 2000's are no longer offered! The orange graph shows that lending standards are far stricter now than they were in the mid 2000's.
Chart #4 Shows that the level of foreclosures is historically very low.
Chart #5 shows that lenders are making nearly as many loans to borrowers with low credit scores.
Chart #6 shows that borrower's debt service as a percentage of their income is at historically low levels. With rising rates, this ratio might not look quite as attractive in the coming years.
Chart #7 shows that housing economists expect prices to continue to rise over the next several years. But at a slower pace.
Chart #8 compares what optimistic forecasters predict for housing cost appreciation over the next four years vs. what the pessimists think. Even on the low side, housing prices are projected to increase by over 10% by 2026.
Chart #9 shows that based on the analysis of seven top economists, the average price appreciation for this year is expected to be 9%
Chart #10 shows that homes today aren't as affordable as they were during the housing crash. But, even after several years of higher than average appreciation, housing is still affordable when compared with most previous eras.
Posted by Mike Wald on