Source: Post Independent —
This is an issue we revisit periodically, because everybody else does.
The question is regularly raised, “With stratospherically spiking home prices, and so called ‘Non-QM (Nonqualifying mortgages, meaning not conforming to Fannie Mae or Freddie Mac guidelines) home loans’ making a comeback, are we headed for 2008 all over again.”
A lot of folks, much smarter than I, predict that we are. They cite runaway increases in sales price, year to year, and even month to month. They mention “Bank Statement” borrower qualifying, i.e. the use of, say, six months’ worth of checking account records as opposed to securing employment verifications or tax returns. And they also cite the proliferation of high ratio (90% of value) conventional mortgages.
When asked about the housing shortage as a factor in the stunning home price increases over the past three or four years, they readily agree that supply and demand is a major determinant, but they note that inventory is rising as mortgage rates increase, and the supply/demand ratio will ultimately even out.
My bet is that a return to the Great Meltdown is exceedingly unlikely, but that’s my bet. Don’t follow suit, because I’m notoriously bad at predictions. As noted, the doomsters have way more bulbs in the chandelier than I. Still, I have a secret super-power that they don’t: memory.
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