Defying Expectations: Celebrating the Unprecedented Strength of Today's Real Estate Market

When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point. 

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

325 Properties
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Open 2/25
651 Resolute Ln Nokomis,  FL 34275
$539,000
Neighborhood: Calusa Park
3
Beds
2
Baths
1,806
Sq.Ft.
2016
Year Built
1
Day on Site
A4597586
MLS
$11,795,000
Neighborhood: Casey Key
5
Beds
6F11/2
Baths
6,596
Sq.Ft.
2008
Year Built
1
Day on Site
A4600753
MLS
Open 2/25
1106 Hoover St Nokomis,  FL 34275
$649,000
Neighborhood: Laurel Woodlands
3
Beds
2
Baths
1,991
Sq.Ft.
1987
Year Built
1
Day on Site
N6130575
MLS
Open 2/24
257 Calmar WAY Nokomis,  FL 34275
$527,000
Neighborhood: Toscana Isles Ph 4 Un1-2
2
Beds
2
Baths
1,832
Sq.Ft.
2020
Year Built
2
Days on Site
N6131300
MLS
Open 2/25
474 Bellini CIRCLE Nokomis,  FL 34275
$1,200,000
Neighborhood: Sorrento South
2
Beds
2
Baths
1,794
Sq.Ft.
1966
Year Built
2
Days on Site
N6131387
MLS
$169,900
Neighborhood: Kings Gate Sec I
1
Beds
2
Baths
778
Sq.Ft.
1989
Year Built
2
Days on Site
A4598558
MLS
$540,000
Neighborhood: Calusa Lakes
3
Beds
2
Baths
2,362
Sq.Ft.
1997
Year Built
2
Days on Site
N6131425
MLS
$427,900
Neighborhood: Sorrento Villas 6
3
Beds
2
Baths
1,850
Sq.Ft.
1992
Year Built
2
Days on Site
N6131418
MLS
Open 2/25
2123 Calusa Lakes Blvd Nokomis,  FL 34275
$1,495,000
Neighborhood: Calusa Lakes
4
Beds
4
Baths
4,255
Sq.Ft.
2000
Year Built
3
Days on Site
A4600209
MLS
$670,000
Neighborhood: Laurel Woodlands
3
Beds
2
Baths
1,844
Sq.Ft.
1987
Year Built
3
Days on Site
A4600415
MLS
$225,000
Neighborhood: Gulf Harbor Marina
33,300
Sq.Ft. Lot
3
Days on Site
D6135180
MLS
3
Beds
2F11/2
Baths
1,373
Sq.Ft.
2024
Year Built
3
Days on Site
A4600642
MLS

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