WSJ Blog uses supply/demand analysis to
forecast the housing market in 2014. On the supply side,
Lenders could begin to ease
certain “overlays”—or additional credit and documentation checks—that
have been imposed over the past few years. Mortgage insurance companies
are getting more comfortable insuring loans with down payments of just
5%. So don’t be surprised if, at the margins, it gets a little easier to
get a mortgage—especially if you have lots of money in the bank.
Even if it gets easier to get a loan—by no means a given—borrowing
costs and fees could rise. Banks also face new mortgage regulations that
could keep most of them cautious. Borrowers with more volatile or
harder-to-document incomes, including the self-employed or those who
make a lot of money on commissions, bonuses, or tips, could continue to
face tough sledding.
The supply of available houses is much lower than it was 5 years ago. Most homeowners are “waiting it out”. Not only are banks now cautious but borrowers have taken heed and are cautious as well. Times are easier for those who never owned because interest rates are low and they’re able to go from rent to own without worrying about selling a current home. Times are not as great for homeowners who bought at the peak of the bubble and paid much more than the market currently allows. Those homeowners are unable to sell at a price that will allow even a breakeven….leaving them stuck where they are. At best, they can look into refinancing to get a lower rate (that’s if they aren’t currently behind in their hefty mortgages and have maintained stellar credit). To add, banks need to continue to be overly cautious.
ReplyDeleteJackie Yee