Credit information indicates that there is no housing accident
Credit stress data
When the next job loss recession hits, we will see an increase in credit stress data and I am 100% sure that America's rulers will be sitting in their futility. YouTube and X accounts, relentlessly pushing their negative narrative. However, now that you have all the data, you can see that the credit stress data we saw in the 2008 crisis will not happen again as long as there are enough quality mortgages available. For the last decade, my view has been to ensure that credit standards are never relaxed, because today's standards are already liberal, but no longer crazy.
The reason I fought so hard for this provision is that when we have economic stress with the big burst of inflation that we saw early on, homeowners will be protected by a boring vanilla 30-year fixed mortgage.
With the data line below, I expected us to return to pre-COVID-19 credit stress levels by the end of 2024, but that never happened. Again, anyone trying to buy an apartment in 2008 should give it up.
Please use these updated charts on credit data for your Thanksgiving dinner conversation and remember why it's so important. The one we watched it has been trending at lows for the past few years, while it was running at accelerated levels then. Here is an example with our November 9 data. See the difference between this week in 2024 and the same weeks in 2009-2011. We had very stressful salespeople back then!
New listing information this week:
- 2024: 48,863
- 2009: 274,614
- 2010: 359,534
- 2011: 315,915
These credit-stricken sellers didn't go back and buy another home, creating years of increasing supply distress in the market. This has not happened once in the last decade and will not happen until we see a recession in job losses. Also, in 2010, more than 23% of homes were under water; today it is the lowest percentage.
Another thing to consider: more than 40% of homes don't even have a mortgage right now, and the average loan-to-value for these homes is less than 50%. In 2008, the value of the loan was about 85%. Also, the average payout data for this year is 15%, which means landlords have more skin in the game than ever before.
We hope all of these charts clear up the confusion for your Uncle Dave or any other Thanksgiving guests who think we're about to see another housing crash like 2008. Credit information for homeowners tells a different story.
