Why Today’s Mortgage Debt Isn’t a Sign of a Housing Market Crash

When it comes to Chicago homes, the real estate market remains strong, and concerns about a housing market crash are largely unfounded. Unlike the 2008 crisis, homeowners today have significantly more equity, creating a buffer against potential challenges.

High Equity Means Less Risk

According to data from the St. Louis Fed, total homeowner equity is nearly triple the total mortgage debt. This strong equity position gives homeowners more options if they face financial difficulties. For example, rather than falling into foreclosure, many could sell their homes and still come out ahead.

Even if Chicago home values were to dip, most homeowners would still have a substantial equity cushion, unlike during the 2008 housing bubble, when many were underwater on their mortgages.

Delinquency Rates Remain Low

Mortgage delinquency rates are at historic lows, according to the NY Fed. Programs designed to support homeowners through temporary hardships are working effectively. Marina Walsh of the Mortgage Bankers Association highlights how loan workout options are helping individuals avoid foreclosure, even during tough times.

Low Unemployment Adds Stability

A strong job market is another factor contributing to market stability. Low unemployment means more people can meet their mortgage obligations. Archana Pradhan from CoreLogic notes that this has helped keep delinquency rates down and reduced risks for homeowners across Chicago and beyond.

How MPG Can Help

For Chicago real estate professionals like MPG, the message is clear: today’s market is built on solid fundamentals. With low-interest mortgages and high homeowner equity, Chicago homes remain a strong investment.

Bottom Line

While mortgage debt is high, the housing market is not heading for a crash. Instead, homeowners are in a robust position to weather market fluctuations. Connect with us---we’re happy to help guide you through Chicago’s thriving real estate landscape.