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Is 2021 the new 2008 housing bubble?

This is something we keep hearing – the “warning signs” seem to be similar to what happened in 2008. Home prices are escalating still, prompting some buyers and sellers to be cautious of their future plans in real estate. Upon compiling research and consulting within the industry, here are a few factors that suggest that we are not in a housing bubble and how to calm your clients’ fears.


Home prices increased 10% on average across the country last year and with rapid growth, it makes sense as to why potential buyers and sellers are worried that depreciation will follow closely behind. One of the main differences of now and in 2008 is that a major force in increasing the home prices, is due to a lack of inventory. Home builders are still slowed, and homes are being picked up quick. According to Keep Current Matters, “a balanced real estate market’s inventory sits around 6 months. Today’s current market is at 1.9 months, a historically low amount of homes for sale.”


The housing boom in the mid-2000’s had less to do with supply and demand, but rather a selling frenzy with an incredible amount of the mortgage industry making it easier to obtain home loans much higher than what could have been afforded. Today, the requirements needed to obtain a home loan are still quite stringent and your finances are looked through very thoroughly. With the Jen Martinez Team, we are very honest in informing you of your home lending options and eligibility before you start the whole process.

A realtor on the phone with a client

Today, demand is incredibly important. Millennials are currently the largest generation in the U.S., and they are at the age and financial stability to purchase their first home. Millennials make up approximately 25% of the buyer population in the U.S., followed by Gen Xers. 86% of home buyers financed their homes according to a NARs report. There are limited homes available and get snapped up quickly and typically over ask.

Purchasing a home, when afforded, is a great financial decision.


Home equity is a homeowner’s interest in a home and can increase as the mortgage balance gets paid down and/or home value increases. Economists, financiers, real estate industry experts and people alike, have made it a point to understand why the housing bubble in 2008 occurred and how to proceed with some caution. Many homeowners in the mid-2000’s took equity out on their homes to either purchase additional properties or to invest in themselves or other items. This resulted in some homeowners owing more on their house than it was actually worth, and depreciation of home values occurred due to foreclosures and short-sales.

In 2021, the cash-out refinance statistics are much better than in the 2000’s as it is less than a third of what it was then. Additionally, more homeowners own their homes outright or have paid off more than 50% of their mortgages.


In short, the housing bubble of the mid-2000’s looked very different than the current situation and it’s less likely that we will see a repeat of that housing market behavior at this time. Ensuring that you can calm the nerves of prospective clients and get to selling more and building your customer base!