While reading a news article on housing prices across Michigan markets, I noticed an unusual phenomenon – in every major city checked, average home sale prices have outshone those just prior to the housing crash/Great Recession – even higher now!
Interesting… it seems odd. Home prices had recovered somewhat over the years – but to pre-housing crisis levels? And in a state which experienced severe economic devastation with double-digit unemployment?
So I did some research. And sure enough, the U.S. Home Price Index proved this – housing prices have now far outstripped pre-crisis levels across the board.
But aren’t things different now? Well… they may well be. But please bear with me here…
As prices have continued to increase at an alarming pace since housing bubble 1.0 burst, so have prices. In fact, rate increases have even exceeded those seen prior to its collapse.
Banks have begun offering mortgages with as little as 3% or 5% down payments and even to those with FICO credit scores as low as 620! Dozens of banks are now offering these special mortgage offers.
This policy may not compare directly with Countrywide Mortgage’s no-down, “anyone can choose their own amount” policy of 2007, but it doesn’t fare much better either.
Are we learning nothing? Sadly, that seems to be the case: real median income in the U.S. today is only marginally higher than it was back in 2007 or 1999!
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