Home values are determined through a complicated series of calculations roughly based on the cost of actual construction plus value-adds like proximity to shopping and other conveniences. The prices
4 Reasons Why Todays Housing Market Is NOT 2006 All Over Again
1. HOME PRICES
“Even though CoreLogic’s national home price index got to the same level it was at the prior peak in April of 2006, once you account for inflation over the ensuing 11.5 years, values are still about 18% below where they were.” (emphasis added)
2. MORTGAGE STANDARDS
“The HCAI measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.
The graph reveals that standards today are much tighter on a borrower’s credit situation and have all but eliminated the riskiest loan products.
3. MORTGAGE DEBT
4. HOUSING AFFORDABILITY
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