How Today's Housing Market Differs From Before the 2008 Crash

How Today's, Housing Market Differs , From Before the 2008 Crash.
High mortgage rates, record inflation and soaring
house prices have all contributed to fears that
the housing market is heading for a crash.
'Newsweek' reports that there are some important
differences between the current market and
the market heading into the 2008 housing crisis.
According to some experts,
one of the main differences
is current underwriting standards. .
During the crisis, there was minimal verification of a borrower's income which led to the prevalence of stated income loans, Ryan O'Loughlin, senior director in
Fitch Ratings' RMBS group, via 'Newsweek'.
In today's environment,
the verification of the actual income
and assets is much more rigorous and
has to maintain certain thresholds, Ryan O'Loughlin, senior director in
Fitch Ratings' RMBS group, via 'Newsweek'.
According to 'Newsweek,' another
major contributing factor to
the 2008 crash was "teaser rates.".
During the GFC [Great Financial Crisis],
borrowers typically had a much lower
payment for the first number of pay
periods and then had the payment
reset to a higher value, Ryan O'Loughlin, senior director in
Fitch Ratings' RMBS group, via 'Newsweek'.
This could have been done
through interest-only features or
artificially low initial interest rates, Ryan O'Loughlin, senior director in
Fitch Ratings' RMBS group, via 'Newsweek'.
'Newsweek' reports that a third difference is that
there is now a "record amount" of equity in
the market due to substantial gains in home prices.
The amount of borrower equity during
the GFC was substantially less than today
and when borrowers defaulted, there
were forced sales and massive losses, Ryan O'Loughlin, senior director in
Fitch Ratings' RMBS group, via 'Newsweek'