As home values continue to rise at levels greater than historic norms, many are concerned we might be headed for another crash like the one we experienced a decade ago. The simple fact is the Lenient Lending Standards of the previous decade (which created false demand for housing) no longer exist. But, what about Home Prices?
Are prices currently appreciating at the same rate as they were just prior to the crash of 2006-2008? Freddie Mac just released the numbers below – let’s take a look:
The levels of appreciation we have seen over the last 4 years aren’t anywhere near the levels that were reached in the 4 years prior to last decade’s crash.
We must also acknowledge, to a degree, the current rise in prices is the market trying to catch up after a Housing Market crash that dramatically reduced prices over a period of 5 years.
At the End of the Day
Prices are rising at levels greater than historic norms. However, we are not at the levels that led to the housing bubble and burst.