I like how when people talk about the last recession, and how the current rise in interest rates are setting up the same scenario in housing always seem to conviently leave out the ARMS that basically exploded the market back then. They compare now to then, and that is just disingenuous.
ARMS only make up 6% of loans right now. During the housing crisis that number was like 38% of the market. This is not even talking about all the exotic financing there was back then.
I think we are due for a correction, but not a life altering correction like last time. Prices may come down some, but you are never going to achieve the right ingredients for that type of explosion again in my lifetime. It really took a confluence of many things to make the housing market crash in 08 and make it go on for so long.
Update: Yep - not a single mention about ARMS. Lot of talk about how this is exactly like 2008 though.
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