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Mortgage FAQ: Is Another Housing Bubble on the Way?


"WITH HOME PRICES STILL CLIMBING, WILL WE GET TO A POINT WHERE PEOPLE ARE BEING PRICED OUT OF THE MARKET? AND IS IT POSSIBLE THAT WE’RE GOING TO HAVE ANOTHER HOUSING BUBBLE?"

According to the S&P/Case-Shiller U.S. National Home Price Index—which is a composite of single-family home prices—home prices have generally trended up since the beginning of 2012 and in many areas of the country are close to or at the peak we saw in 2006. However, that doesn’t mean that people are being priced out of the market. Nor does it mean that a housing bubble is looming. On the contrary, owning a home is still affordable and the housing market continues to be strong because the current conditions are vastly different than they were in 2006 and the following years. How different?

For one, the extremely low interest rates have allowed many people—even in the face of rising prices—to buy a new home without having a monthly mortgage payment that they can barely afford or not afford at all. Also, mortgage approval and access to credit are more stringent today (without being overly stringent) than they were in the days of sub-prime mortgages. Without this easy credit access that was partly to blame for the market difficulties in the late-2000’s, it is unlikely that we’ll have another housing bubble similar to the one we saw a decade ago.

For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.

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Licensed by the Commissioner of Banks - License No. MB2671