As the housing market slows, Scholastica Gay Cororaton, a research economist for the National Association of Realtors, compares today's market conditions with those of 2004.
Cororaton explains that comparing today's market with the market 14 years ago is valuable since it may presage what a coming market downturn will bring. The NAR's data show employment, household credit, and housing indicators, signaling that the market is less likely to have such marked home price depreciation in the future, than was the case from 2005 to 2012. Currently, housing supply is tighter than it was more than a decade ago, as is credit, and the economy is reportedly stronger today than it was in 2004.
The economy is stronger now than it is in the 2004 when interest rates started rising and home prices started falling as foreclosures rose. The unemployment rate stood at 3.7 percent in August 2018, the lowest since 1969 when the unemployment rate averaged 3.5 percent. The housing market’s downturn and credit freeze brought down the economy in the Great Recession, so with the less likelihood of a severe housing market downturn and financial crash, the economy is at a healthier footing in 2018 than in 2004.
