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Through detailed search and discussion, we bring you verifications through three charts that show that this is not a housing bubble. Also, learn more about the housing bubble and what happens when it is prevalent. <br>
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Detailed Discussion Through Three Charts Showing This Isn’t A Housing Bubble www.paulsinghrealtor.com
As we are aware that the prices of homes are increasing exponentially, some people have started wondering if we are again in a housing bubble like earlier in 2006. To prove this false assumption let’s take a close look at the market data :
1. The housing market is not in the hands of risky mortgage loans According to Mortgage CreditAvailability Index (MCAI) from the Mortgage Bankers’ Association there is an evidence mortgage money presence. It is known that the more you raise the index, the more it becomes to obtain a mortgage. And hence as a result the MCAI has become 378 in 2004 to 869 in 2006.
2. Homes are no more ATMS for the homeowner’s Today, homeowners are letting their equity build. Tappable equity is a term referred to the amount present for the homeowners to have right of entry before hitting a maximum 80% combined loan-to-value ratio but still leaving them with at least 20% equity. In 2006, that number was $4.6billion and now it's $8 billion.
3. The time supply and demand is all that matters During the housing bubble builders were also continuously involved in building projects which eventually declined in the next few years. According to Sam Khater, VP and Chief Economist, Economic & Housing Research at Freddie Mac, also states that this pullback is hence one of the reasons for lack of available inventory today.
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