No crash. Discipline and isolation from rate changes.
Sam Ro 22, the author of TKer.co. He was previously managing editor at Yahoo Finance and a deputy editor at Business Insider, where he led the site’s coverage of global markets. He is a CFA charterholder. September 27, 2022, "3 charts showing that we’re not repeating the housing bubble: Morning Brief," Yahoo News, https://news.yahoo.com/3-charts-to-ease-fears-that-were-repeating-the-housing-bubble-morning-brief-100021048.html ---ML
These extreme moves undoubtedly have some of us remembering the housing boom and crash of the mid-2000s that was largely responsible for triggering the global financial crisis.
But back then, there was a near-universal optimism about home prices, which made way for unreasonably lax lending practices and high-risk financial innovations that made the towering mortgage market much more fragile than many experts believed.
Things are very different today.
First, lenders have been much more disciplined with their lending practices. According to New York Fed data, the vast majority of new mortgage loans in recent years have gone to prime borrowers with the highest credit scores.
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Second, adjustable rate mortgages are nowhere near as popular as they were during the housing bubble. This means very few new buyers are vulnerable to interest rate volatility.
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Third — and this is related to the chart above — about 99% of outstanding mortgages have a locked-in rate that’s lower than the current market rate, according to Goldman Sachs analysts. In other words, the vast majority of homeowners are not materially affected by rising mortgage rates.