In June of this year, home prices rose for the 50th straight month. Nationwide, current home prices are only about 1% below record highs from 2006, which was the beginning of the housing crisis. At the same time, mortgage rates are trending lower and lower. The average 30-year fixed mortgage rate is now just 3.49%, which is only a few points above the all-time low of 3.31%.When you put these two factors together, many people are wondering the same thing: Are we in the middle of a new housing bubble? The rising home prices over the passover years is undeniable, as are the low mortgage rates. However, the situation today is very different from the housing bubble that happened 10 years ago. Why?First,** lending has been cleaned up**. The risky mortgages that fueled the housing bubble a decade ago aren’t happening today because of new laws like the Dodd-Frank Act. In fact, the stricter regulations surrounding lending is one of the reasons why mortgage rates are so low right now. Since banks have tighter criteria for the lenders they approve, they can afford to lend money at a lower rate.“The situation today is very different than that of 10 years ago.”Second, the current level of new home construction is below historical averages and is only a fraction of the level of 2006. This is the opposite of what you’d expect in a bubble. Home builders are simply not finding it profitable to build new housing right now. This shortage also explains the high prices that existing homes are selling for. In other words, demand is higher than supply right now. This means that it’s a great time to sell. If you’re curious about your current home value, send us an email at [email protected]. Put your address in that email and we’ll respond with its current market value.The big housing crisis of 10 years ago was set of by speculation and loose borrowing. We’re not seeing either of those things right now. Instead, what we’re seeing is a shortage of certain kinds of homes on the market, which has increased the level of home prices. However, thanks to the lower mortgage rates, those homes are actually affordable. If you’re thinking about selling your home or buying a new one, just give me a call or shoot me an email. I’d be happy to help!