Austin Klar breaks down why today's housing market differs from 2008: 40% of homeowners own outright, 75% of mortgaged homeowners have rates below 5%, and average equity is now 50% of home value versus 30% a decade ago. With only 0.3% in negative equity and adjustable-rate mortgages at less than 4% of the pool, forced sales are unlikely.
If you're banking on a wave of distressed sellers putting their homes on the market, you're gonna have to keep waiting. 40% of homeowners have no mortgage at all, and those that do have a mortgage, 75% of them have interest rates under 5%, very low-cost fixed debt. The number of adjustable rate mortgages, less than 4% of the total mortgage population. And homeowners have more equity in their homes than in previous years. Only 0.3% of borrowers have negative equity. And after the last decade of significant home price appreciation, homeowners have on average about 50% equity in their home compared to about 30% a decade ago, With these equity cushions and low-cost debt structures, homeowners are really well positioned to weather a potential downturn, so there's not going to be a flood of inventory from distressed sellers like we saw in 2008. Follow me for more housing market updates.
