The most recent National Mortgage Database (NMDB) Aggregate Statistics отчет от ФХФА reveals the significant amount of собственный капитал that American households possess. This should put an end to any discussions suggesting that the housing market is on the verge of a mass foreclosure crisis or that national цены на жилье will crash like they did from 2007 to 2011.
Vast home equity cushion
Keep this very simple: 82% of homeowners in America have at least 30% of equity in their homes. Because we haven’t experienced a massive credit housing boom in the past 14 years, we simply can’t replicate the debt expansion or the cash-out debt expansion that was common in the run-up from 2002 to 2005, with mortgage credit demand. As a result, households that have lived in their homes for an extended period have accumulated substantial home equity, enabling them to sell and purchase another home if they choose to do so.
This situation differs from the years following the housing bubble crash, when nearly 15 million loans were under stress, and many late-cycle homebuyers had little to no equity. During that time, people were forced to sell in an underwater market.
Down payment and loan-to-value data are very different
As shown in the chart below, the loan-to-value ratio for American households is very low. How does this compare to the housing bubble crash years? The loan-to-value data averaged roughly 57% from 2005 to 2006. From 2008 to 2012, it increased to around 85% and remained at this level for several years. Currently, we are at 47%.
What is often overlooked in housing economics is that the percentage of down payments decreased from 2001 to 2008, meaning American households were putting less money down for their home purchases. In contrast, data from the Национальная ассоциация риэлторов (NAR) shows that down payments have been steadily increasing for many years.
Homeowners have long-term fixed debt products
Unlike the 2008 housing crisis, where many homeowners had adjustable-rate mortgages (ARMs) that were set to increase their payments to unsustainable levels, today’s mortgage market predominantly features fixed-rate loans with 30-year terms. Although the percentage of loans with ставки по ипотечным кредитам above 6% is rising, the current loan structures mean that we will not see the same recasting of payments that we experienced in the past. Even the ARMs issued in recent years have different debt structures and underwriting standards compared to those from before.
As housing tenure increases, households with fixed long-term debt costs and rising wages tend to have better financial situations. This trend reflects the advantages of having a 30-year fixed mortgage, as it allows for predictable debt costs while benefiting from increasing wages.
Заключение
I wanted to make this article as simple as possible, especially with the charts that I shared above. The current equity and debt landscape is significantly better than what we experienced during the historic housing bubble crash, something the graphs clearly illustrate. The benefits of the 2005 Bankruptcy Reform Law and the 2010 Qualified Mortgage Law continue to impact us today and will do so for many decades to come.
English