Buzz has been brewing about a potential real estate bubble and burst. "Is 2022 the new 2008?" people ask. Low-interest rates and limited inventory in desirable areas spurred buyers to bid up house prices, leading to overall increases of 11.3 percent in 2020 and 16.9 percent in 2021, according to Freddie Mac. 

With mortgages still relatively easy to obtain, rising home prices, and consumers willing to go above and beyond what they'd originally budgeted for their home investment, is the market poised for another crash?

It's time to breathe and get a reality check.

Crashes in the real estate market are actually less common than people think. Consider today's tougher lending standards, rising interest rates, increased employment rate, and cautious new building trends. But what goes up must come down with a crash, right? We, at House Buyers of America, don't think so. 

Real estate prices actually rose in the dot-com bubble of the late 1990s, and also during the recession of 1990-91. Also worth noting: 2021 wrapped up with foreclosures at an all-time low and delinquencies near their lowest benchmark, according to Black Knight. 

When we say "mortgages are relatively easy to get" in 2022, we're not characterizing this as similar to the mortgage landscape of 2008, when low- and no-doc packages were commonplace and homeowners were often tied to volatile ARMs. This led to catastrophic hits to their bank accounts, often due to poor planning, followed by defaults. Over-leveraging existed at every price point, ranging from FHA loans for lower-income borrowers to exotic jumbo mortgages at the top-tier. Since then, underwriting standards have tightened across the board, most notably with Fannie Mae and Freddie Mac. 

The Federal Reserve has indicated that it intends to raise interest rates (currently a little over 4 percent) to counteract inflation (at 7 percent, as of January 2020), meaning it will be somewhat more expensive to purchase real estate. So, perhaps some buyers will be pushed out of the market, but not at 2008's drastic levels. Global uncertainty may still impact interest rates, however.

The early to mid-2000s saw a glut of overbuilding. Post-2008, builders streamlined their operations. The National Association of Realtors (NAR) reported in late 2021 that home builders are planning to increase supply -- albeit more cautiously -- thus diminishing the risk of a bubble-bursting, drastic supply-and demand-scenario. 

What can we expect in the coming months? For the foreseeable future, it's still a sellers' market.

January 2022 data from NAR points to a 2.1-month supply. Interest rate hikes might slow things down a bit. (For example, sellers entertaining 10 versus 20 offers.) 

If the global economy is uncertain, then it is likely that interest rates and mortgage rates are anticipated to go down; again, making it more affordable to purchase a home. Yet it bears reminding that 2022 is not the free-wheeling, easy-approval environment of the mid-2000s, with its aftermath in millions of foreclosures, and trillions lost by institutional MBS investors.

The pandemic has fundamentally altered the concept of the "workplace." Thanks to technology, home is the new office. Employers are desperate to recruit and retain employees. People are relocating for better real estate value, coupled with a better quality of life. Home buyers are looking for better schools, lower average cost of living, even access to favorite recreational pastimes. This is especially exciting for entrepreneurs. Whether they're funding a side hustle or creating the workplace of their dreams, they can attract remote employees and have more money left on the table to fund growth.

Finally, the NAR reports upticks in single and multi-family home rental markets. This is a powerful reminder that even in volatile markets, real estate still remains a safe haven for investors, while providing a recurring income. Long-term real estate investments help balance rate and market swings -- an especially powerful hedge for the entrepreneur. 

As you can see, 2022's real estate market is not 2008's cauldron. Interest rates may or may not fluctuate due to inflation or global market concerns. Employment is up, new builds are slowly rising, and people are looking at home purchases for work/life/investment purposes in new geographic areas. But most of all, the steady hand of sound credit underwriting will keep the cauldron from boiling over.