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Are We Facing Another Housing Crisis?

Housing Crisis - Bittinger Team, REALTORS

Ten years after the 2008 financial crisis, it’s safe to say the housing market has recovered – and then some. Home prices are now back up, even breaking records in certain parts of the country. This has left many wondering, is the market too hot?

At, we’re always watching the market to stay ahead of developing trends. That’s how we’re able to bring you the latest news and updates on the real estate market in Southeast Michigan.


A Few Key Differences

Michigan was a state hard hit by the housing crisis a decade ago. Perhaps that’s why we are seeing a lot of apprehension from potential home buyers about purchasing at a time where the market looks eerily similar to that of the early 2000s.

However, when you look a little closer, you’ll see a few key differences that make us confident we are NOT in the midst of another housing bubble.



In the early 2000s, new homes were being built at an alarming rate, leading to an over supply of single-family homes. In order to fill these new homes, lenders extended credit to those who shouldn’t have qualified.

Today, instead of an oversupply, we are experiencing a housing shortage resulting in rising prices. The demand for affordable houses far outweighs the supply of houses for sale and new construction homes.


Subprime Mortgages

The housing crisis started years before the bubble burst with subprime mortgages being given without much regard for how borrowers would repay their loans. The Federal Reserve compacted the problem by lowering interest rates to spur growth in a sluggish market. This created a bubble which burst when rates started to climb again, making it impossible for borrowers to repay their loans.

Today, subprime mortgage loans with adjustable rates aren’t being written at anywhere near the same volume. Nearly 90% of mortgage-backed securities are produced by Fannie Mae, Freddie Mac, or Ginnie Mae – “government-sponsored” mortgage facilitators with strict credit guidelines.



Another thing millennials are responsible for ruining?! Not quite. Millennials now make up the majority of home buyers in the market, and this generation is not so far removed from the housing crisis that they’ve forgotten. In fact, many enter the market with cold (financially conservative) feet compared to generations before them. That, in addition to crippling student loan debt, make it so that many millennials are putting off home ownership in favor of renting while they pay down their debts.

That’s not to say millennials aren’t entering the housing market. About 4 out of 10 millennials  currently own a home, and 88% of those who don’t intend to enter the market soon.


Are You Ready to Enter the Housing Market?

What folks fear is a housing bubble isn’t a bubble at all, but a reflection of a supply and demand imbalance. 2018 saw some relief with an increase of new construction homes, a trend we expect to see continue in 2019.

Entering the market with caution is always a smart idea. If you’ve got questions about buying your next home or would like to discuss selling your current house, contact Our team of real estate professionals is up-to-date on the latest market trends, ensuring you make the best choice for your next home.


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