Real estate is changing to a more normal market. The days of appraisal of the houses nationwide are over 6% annually.
Inventories are increasing which is causing bidding wars to almost disappear. Some see it as signs that the market will soon fall as it did in 2008.
As a buyer’s ability to obtain a mortgage becomes easier, many are suggesting that this is definitive proof that we are returning to the same mistake banks made a decade ago. Today we want to assure everyone that we are not heading to another “bubble and collapse” of housing.
Each month, the Mortgage Bankers Association (MBA for short) publishes a measure of the availability of mortgage credit known as the Index of availability of mortgage credit Mortgage Availability Index (MCAI for its acronym in English). According to the MBA :
“The MCAI provides the only standard quantitative index that focuses exclusively on mortgage credit. The MCAI is calculated using several factors related to the borrower’s eligibility (credit score, loan type, relationship between loan and value, etc.) “*
The higher the measure, the easier it will be to get the mortgage. During the accumulation of the last housing bubble, the measure settled around 400. In 2005 and 2006, the measure doubled to more than 800 and was almost 600 in 2007. When the market collapsed in 2008, the index It fell to a little over 100.
Over the past decade, as credit began to ease, the index increased to where it is today 186.7 – still less than half of what it was before the accumulation of the last decade and less than a quarter of where it was during the bubble.
Although mortgage standards have somewhat softened over the past few years, we are nowhere near the standards that helped create the housing crisis ten years ago.