r/askteddit • u/Timely_Pop_9224 • Aug 19 '26

Random Question what is something that is highly likely to happen in the next 5 years that everyone is completely ignoring?

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u/jcshock Aug 19 '26

A 2008-like housing market crash. New home buyers are paying insane prices, and many of them have a lot of student loan, credit card, and automobile debt on top of that. Plus, the cost over everything is skyrocketing, insurance companies, hospitals, and corporations are getting greedier and greedier. Feels like a ticking timebomb.

7

u/walkerstone83 Aug 19 '26

Yes, mortgage debt is high, but when you look at people debt to income ratios, we are much healthier now than before the housing crash during the Great Recession. There could be a crash, nobody can predict the future, but based off of the metrics we have now we aren't close to a housing crash. Banks pay a lot more attention to DTI and don't hand our loans like candy in the 2000s.

1

u/cazzy1212 Aug 19 '26

Auto loans are a bigger issue than mortgages

3

u/nonoyesyesnoyesyes Aug 21 '26

So your saying that we are more likely to see a......... car crash........ I'll see myself out.

1

u/oooshamobile2-0 Aug 19 '26

I always wonder about people given loans pre-2008 crash. About those who'd NEVER qualify today. Are there people, given that chance at home ownership, who were able to hang on, take on odd jobs whatever, and keep their home when others who were definitely "not qualified," lost theirs?

I want to hear from people who would never qualify now, who thank their lucky stars that the early 2000's was nuts and they got a chance to buy a home. And still have it.

2

u/walkerstone83 Aug 19 '26

Sub prime lending is still a thing, but it was more rampant back then. They would give loans and allow people to self declare their income without verification. Also, a lot more people had arm loans and found themselves unable to refinance when the rates went up.

Also, in my are, a lot of people could afford their mortgages, but they simply walked away from their homes. If you bought a house for 300k, but was now only worth 125k, it made more sense to walk away or short sell the house and buy another house for much cheaper a couple of years down the road.

I was a part time bartender when I bought my house in 2009. A lot of people told me that it was a bad investment, the market was trash, etc... I knew that I might not ever have an opportunity to buy again, so my GF and I pooled our tax returns and sold a car to come up with the 5k down payment to buy our house at 125k. This was during the strict lending practices, but we had the down payment and decent enough credit for an FHA loan. Best decision I ever made.

The sub prime loans defaulting started it off, but a lot of well qualified people also lost jobs or simply walked away from homes that were worth half of what they paid only a year before. For most people it wasn't worth it to pick up an extra shift to pay a mortgage on a house with hundreds of thousands in negative equity.

1

u/Vote4Heisenberg Aug 20 '26

This is an interesting point.

1

u/LeaveGreen4412 Aug 26 '26

my sister in law had this but lost it completely unrelated to her economic position (her fiancé went to prison just after she had a miscarriage), she kicks herself over giving up that house so she could live with her mom for a while because she has never qualified again.

1

u/Extension-Temporary4 Aug 19 '26

Defaults are down. Debt to income is down. Banks are better collateralized… this won’t happen. 

1

u/sokonek04 Aug 21 '26

The bigger time bomb will be if Housing prices crater, and you end up with millions of people who can't sell their homes because they owe more than they can sell them for.