Lending Perspectives: Is the 2022 housing market like the pre-Great Recession housing market?
Consider these issues to make sure your credit union is prepared for what will come in your area.
I admit it, I’m a planner and always want to be prepared, no matter the situation—personal or professional. I once flew to Dallas to buy a car with a plan B and C already in mind. I developed a plan D on the fly as things went awry. As it turned out, I went to plan E and flew home instead of driving the car home.
As a lender, I’m a big believer in being prepared for the worst when it comes to my portfolio, credit union and members; that way, so long as we don’t experience the worst-case scenario, we’ll all come out smelling like the proverbial rose. I also like to joke about having predicted five of the last three recessions. Actually, it might be seven of the last three by now!
I sense some nervousness about housing in the market these days. How will the average family afford a home with the combo platter of record-high prices and a fixed-rate first mortgage rate uncomfortably close to 6%?
After all, compared to late last year, rates are now double! On average, payments are up more than 30% for the same mortgage amount. I’d guess that most buyers would have a tough time handling a 30% higher payment compared to a year ago. This has to have some downward pressure on home values.
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