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The latest data from the annual Harvard Joint Center for Housing Studies report shows that, in general, the U.S. real estate market is in better shape than it has been in years, as employment continues to grow and home prices have rebounded — or at least stopped falling — over the past few months. Sales of existing homes have been on the rise for the last 10 months, and bottomed-out prices suggest a full recovery may come over the next few years or so.
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In general, people are becoming more confident in their own abilities to afford a home purchase, the report said. Home prices are down some 35 percent nationwide, interest rates are below 4 percent and have been for some time, and at the same time, renting is becoming more expensive.
But one thing that has been persistent in restricting the housing market’s continued growth is that many mortgage lenders are still keeping financing under tight wraps for many consumers, the report said. Experts generally agree that this is an overreaction to the downturn seen in the last few years, which led to millions of people becoming delinquent and later defaulting on their home loans, and it cost banks billions. Many financial institutions are still requiring credit scores that are well above what would have been needed to qualify for a mortgage just a few years ago, and most also mandate larger down payments from those who would otherwise qualify.
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Broadening credit standards would be helpful to consumers who are looking to take advantage of the more affordable housing prices, and lenders have generally been more open to extending with other types of credit, such as credit cards, to subprime borrowers in recent months.
Image: marada, via Flickr
December 13, 2023
Mortgages