Tighter Lending Standards ARE NOT the Problem with Housing
While the media has focused on declining sales, lower median sales prices, and elevated listing inventories, there is a sliver lining of good news. Predictably, the national news media has charged that tighter lending standards are the culprit and that the difficulty in obtaining a mortgage has increased over the past couple of months making it more challenging for creditworthy borrowers to find financing. As we all know, this is utter bunk. The idea that “obtaining a mortgage right now is all but impossible” seems to be seeping into the national consciousness, aided and abetted by mainstream media. Mortgage lending standards remain very reasonable, and that the problem is not “overly tight” standards, but that we are reaping the whirlwind caused by lending standards that were far too loose for far too long. The loose lending era stimulated a lot of artificial, unsustainable demand, which drove prices way out of line from reasonable market fundamentals. It is the aftermath of this era – too much supply and not enough legitimate demand – that’s driving prices down and putting many homeowners behind on their mortgage, not tighter lending. No amount of yearning for those ridiculous lending standards of three years ago will fix that. Those days are thankfully gone, they aren’t coming back, and we’ll be lucky if we escape the whole mess with an intact financial system. Getting a mortgage today is not as tough as they may have been led to believe.
The Mi Casa Program through Edina Realty is available to all and is an excellent opportunity for first time buyers to obtain the home of their dreams with gifted down payment assistance.
Call me to learn more!
Kristin Rial 952-210-3121
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