Consumers think the market is going to crash

We’ve talked many times about the horrible job the media is doing. They aren’t telling consumers what’s actually happening in the housing market

Here are five data points from Keeping Current Matters you can use to educate consumers in your market. I suggest saving visuals like this straight to your phone, so you can easily access data when texting, emailing, or having a face-to-face conversation. 

Lending Standards are Nothing Like Early 2000s

KCM-graph-Lending-standards

This chart shows both product risk and borrower risk from 1999-2021. Borrower risk is the typical risk you will run into with a loan. 

Product risk includes products designed to give people mortgage loans. Some products in the early 2000s were designed to lend people money who had no shot of paying it back. They had things like stated income loans or no income verification—which is extremely risky. 

You can see on the chart that product risk has been almost nonexistent in recent years compared to the early 2000s. 

When you show people that lending standards are different, they understand that there’s not much risk of foreclosure. 

Recession Does Not Equal a Housing Crisis

KCM-graph-Recsesion-does-not-equal-housing-crisis

This chart shows both product risk and borrower risk from 1999-2021. Borrower risk is the typical risk you will run into with a loan. 

You’ve heard it plenty of times by now. But have your clients seen the data? 

If you look at the past six recessions, the only one with a significant drop in home values was 2008–the recession caused by the housing bubble. The other recession that saw a decline was in 1991 when home values dropped by less than 2%. 

The remaining four recessions saw an appreciation in home values. 

Median Asking Rent Since 1988

KCM-graph-median-asking-rent

Rent has never gone down. 

Some people think it’s better to rent, especially when rates are rising. Well, the interest rate on a rental is 100%—and this chart shows how steeply those rates have climbed. 

This is especially helpful to show first-time homebuyers, as there are opportunities for them in today’s market. Even if mortgage rates continue to go up, we can guarantee that rent will also rise. Which would they rather pay?

Housing Price Forecasts 2024-2026

KCM-housing-forecasts-2024-to-2026

We’ve seen that experts have different forecasts regarding home values. Some expect prices to continue to appreciate but at a slower pace than the previous two years. Others predict some depreciation to occur over the next couple of years. 

There are a lot of experts out there. I like to look at what the majority forecasts, not one or two. Use this slide to show your clients what most housing experts and economists predict through 2026. 

Supply & Demand Ratio Changing Quickly

KCM-chart-Supply-and-Demand-Ratio

Some buyers still believe there is no inventory out there. But active listings year-over-year are up 26.9% nationally, and showings have declined -12.2%. 

This is what buyers have been waiting for, and it’s information sellers need to hear. 

Be a Guide for Your Clients

If you incorporate these five pieces of data, have the slides ready, and know the numbers for your market, you’ll be able to find folks who are really motivated to buy or sell. 

Your work is to help them make informed decisions. They need you to be their guide in the process. Are you ready to take on that task?