If you remember the housing boom of the mid-2000s, you know how crazy that time was in real estate. But if Robert Schiller, a fellow at the Yale School of Management’s International Center for Finance, could sum it up in one phrase, it’s this: irrational exuberance.
In other words, the buying and selling frenzy that contributed to the market collapse was fueled not by tactful, financial decisions but a country-wide case of FOMO (fear of missing out).
The mortgage industry fed into the frenzy, making it easy for people to obtain home loans much higher than they could afford.
Today’s real estate demand, however, is a very real thing. And lending standards have become much tighter since before the crash.
Plus, with escalating rent happening across the U.S., many Americans are opting for the financial stability that homeownership offers.
These factors, coupled with low mortgage rates, make purchasing a home today a good financial decision. So, not only is the demand very real, it’s also very smart.