Welcome to your Monthly Market sCoop for April! We hope you enjoy this inside sCOOP from the Cooper Home Team and find it helpful for understanding the current market and making informed real estate decisions. 

BOTTOM LINE- The Real Estate Market continues to be healthy as we head through Spring! There's been some concern over whether or not we will enter into a real estate market similar to the one in 2008. While we may see some foreclosures as some Americans eventually come out of forbearance, it is not likely we will see that on the same scale as we did in 2008. 

Housing Inventory: One of the biggest challenges in real estate right now is low inventory still due to effects of covid-19-fewer people putting homes on the market and builders struggling to make up for lost time during the shut down. We are currently below the average of single family units being completed as builders struggle to keep up with demand. This demand, however is a real demand as compared to the false demand prior to 2008 which occurred due to faulty loan practices. Also, while a single snapshot on a single day may show low inventory, there is a steady stream of homes being sold and bought as homes go on the market and come off the market quickly.

Are we seeing a Cash Out Refinance Crisis similar to the one prior to 2008? No. As you can see in slides 3 and 4, while home equity cash out is higher that it has been since 2008 it is not even close to what it was at that time. Also, the amount of tappable equity is much higher now and Americans are not tapping into at the same rate. 

Is this like the last time? Most likely not! As you can see from slide 6, while home appreciation was high last year, the average over the last 4 years was a healthier 6.3% as compared to the unhealthy 4 year average of 10.3% prior to 2006. Also, as we see from slide 7 the default risk in the mortgage market is much lower now than in 2006. The loan products that were in the market back then aren’t around today and borrower risk has been severely cut back. It’s harder to quality for a home loan. When we look at demand we can say, back then demand was inflated, whereas today demand is real as measured by those in their ability to qualify for a home. 

Interest Rate Update-IR are predicted to rise to 3.25%-3.75% as the economy improves throughout the year.