Re:Mortgage Market Reopens to Risky Borrowers
by bduerst on Wednesday August 21, 2019 @06:34PM
(#20762652)
Bay Area housing is an economic bubble.
One of the signals that the analysts used to correctly predict the housing bubble existing in 2007 was growth rates across mortage payments and rental prices. As mortgage payments grew faster than rental prices, and diverged, you have evidence of a bubble.
Currently in the bay area, the cost to rent and the cost of a mortgage payment for the same type of property are so drastically different that it is a signal we are still in a bubble. So many people jump into owning, only to become "house poor" because of it.
That said, prices are dropping so just be ready to pull the trigger if you find an opportunity.
One of the signals that the analysts used to correctly predict the housing bubble existing in 2007 was growth rates across mortage payments and rental prices. As mortgage payments grew faster than rental prices, and diverged, you have evidence of a bubble.
Currently in the bay area, the cost to rent and the cost of a mortgage payment for the same type of property are so drastically different that it is a signal we are still in a bubble. So many people jump into owning, only to become "house poor" because of it.
That said, prices are dropping so just be ready to pull the trigger if you find an opportunity.