How homeowners benefit from massive equity and lower fixed rates

Let’s see how homeowners are placed today.

Fixed rate loans

An important aspect of the housing market that led until 2008 was the dramatic increase in exotic loan structures, mainly adjustable rate mortgage products (poor), which were good for more than 30% of the loans at that time. On the other hand, more than 90% of the loans issued in the United States after 2010 are long -term products. Currently, 40% of homeowners do not have a mortgage loan at all and those who do, 70.4% have a fixed tariff loans of 5% or less.

This is why many homeowners in America have excellent Fico scores; Their long -term debt costs remain as their wages rise.

Americans have enormous equity

One of the characteristics of the house bubble crash period was the considerable number of preventments that took place in America. With so many distressed homeowners and underwater mortgages, it was the greatest failure in American economic history. Compare that with the enormous amount of house of equity that Americans are today.

During the run-up to the home crisis in 2008, the loan value value ratio reached up to 85%. The loan value ratio is currently 44.2%.

Another subject that does not play much is that the data from the down payment percentage fell from 2001 to 2008, and in recent years it has risen to the 21st-century highlights. Homeowners have a healthy median upbalance level to start with, in contrast to the 21st-century lows in 2008.

Conclusion

You do not have to be an economist to understand the above data. It is not a repeat of the housing crisis in 2008; In fact, it is precisely the opposite. Between 2005 and 2008, the protection and the bankruptcy rates rose, culminating in the large financial recession, as illustrated in the graph below.

If you know someone who owns a Honda from 2008 or has a family member who continues to insist on this point, show the graphs and remind them that reading is useful. The history of human civilization has taught us that those who read have an advantage over those who don’t.