No Bubble Here! How New Mortgage Standards Are Helping

By
Managing Real Estate Broker with Better Homes and Gardens Real Estate Star Homes

No Bubble Here! How New Mortgage Standards Are Helping

Real estate is shifting to a more normal market; the days of national home appreciation topping 6% annually are over and inventories are increasing which is causing bidding wars to almost disappear. Some see these as signs that the market will soon come tumbling down as it did in 2008.
 

As it becomes easier for buyers to obtain mortgages, many are suggesting that this is definite proof that banks are repeating the same mistakes they made a decade ago. Today, we want to assure everyone that we are not heading to another housing “bubble & bust.”

Each month, the Mortgage Bankers’ Association (MBA) releases a measurement which indicates the availability of mortgage credit known as the Mortgage Credit Availability Index (MCAI). According to the MBA:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).” *

The higher the measurement, the easier it is to get a mortgage. During the buildup to the last housing bubble, the measurement sat at around 400. In 2005 and 2006, the measurement more than doubled to over 800 and was still at almost 600 in 2007. When the market crashed in 2008, the index fell to just over 100.

Over the last decade, as credit began to ease, the index increased to where it is today at 186.7 – still less than half of what it was prior to the buildup of last decade and less than one-quarter of where it was during the bubble.

Here is a graph depicting this information (remember, the higher the index, the easier it was to get a mortgage): No Bubble Here! How New Mortgage Standards Are Helping | Simplifying The Market

Bottom Line
 

Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.



Jim Starwalt

Managing Broker

Better Homes and Gardens Real Estate Star Homes

783 N Barron Blvd, Grayslake IL 60030

Cell Phone: 224-627-7581

Jim@StarHomeTeam.com

Search for Homes at www.StarHomeTeam.com

Find Me Online:

https://twitter.com/bhgrestarhomeshttps://www.instagram.com/bhgrestarhomes/http://www.facebook.com/starhometeamhttp://www.linkedin.com/in/jimstarwalt

No Bubble Here! How New Mortgage Standards Are Helping

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Buying
Location:
Illinois Lake County
Tags:
grayslake realtor
grayslake real estate agent
lake county illinois homes for sale
jim starwalt team
better homes and gardens real estate star homes
2019 home buying

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,197,459

Jim Starwalt

A Name You Know and The Brand You Trust
Ready to Make a Move? Contact Jim Starwalt
*
*
*
*
Spam prevention

Additional Information