It's been quite some time since I've posted any blogs to my site. Been too busy and really hadn't thought much about it. But I was checking over my website stats today and to my surprise, I actually have quite a bit of traffic that lands on this page. A few people seem to visit each day and during the course of a month, it's actually quite a few people. So I thought I'd better "sharpen my pencil" and see if I can write and post a little more often.
So today, I'm taking a quick look at home sales. Not surprising that in this sluggish economy, home sales are down recently. But what might surprise you is that tighter credit is at to root of some of the problem. From NAR's chief economist:
“We continue to experience a pattern in which financially qualified home buyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” said Lawrence Yun, chief economist for NAR. “Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy.”
It's interesting that the big banks are keeping such a tight leash on credit, yet they are complaining about their shrinking profit margins. Hard to make a profit when your turning down loans to people with decent credit. And then they stick their customers with more fees like the recent ones announced for debit cards.
On top of that, the conforming loan limits were recently reduced across the country, effective on October 1st. Locally here in Southern California, the conforming and FHA loan limit dropped from $729,750 to $625,500. How's that going to further affect the real estate market? I'm not sure, but time will tell. I doubt it's going to help though.
All for now, Lee