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Mortgage Market Getting Better, Say Realtors

by Peter G. Miller
October 15th, 2007

The National Association of Realtors is claiming that the mortgage market has eased and therefore we should see a sales increase at the start of next year.

It may well be true that mortgage standards are beginning to become less severe than what we saw in late summer. However, the fact remains that we have far fewer lenders than we used to and — of those still with us — many have cut back or no longer offer subprime products, stated-income loan applications or certain types of toxic loans. The result is that many people who would have “qualified” for financing a year ago cannot meet current market standards, something which is probably good for lenders and borrowers though perhaps not the first choice of either.

Below is part of the release from NAR.

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Conditions in the mortgage market are improving for consumers, which should help to release some pent-up demand in early 2008, according to the latest forecast by the National Association of Realtors.

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. “Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.

Yun said it’s important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales. “Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year – a lot of people are, in fact, buying homes,” he said. “One out of 16 American households is buying a home this year. The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.”

He emphasized all real estate is local with naturally large variations within a given area. “Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year,” Yun said. “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.”

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This entry was posted on Monday, October 15th, 2007 at 2:46 pm and is filed under , . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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