The Truth about Housing and Lenders
Today’s news from the housing experts was dismal and some what confusing.
First, lenders reported that loan applications had increased in the past few weeks. Why are the number of applications increasing if property is not selling?
The answer lies in the drying up of the lending spigot. Even prime borrowers are discovering that no funds are available for home loans. The lack of available mortgage money means that potential borrowers are being forced to apply to dozens of lenders when searching for a loan. Thus, the increase in the amount of loan applications.
The second bit of news of interest to home buyers and sellers was issued by the large, publically traded home builders. Home builders reported record losses and they still have a glut of unsold home inventory to dump. They also reported they own a 5 year supply of land for development, so they will not be looking for purchases of land tracts anytime soon.
What does that mean to you? Home builders with deep pockets will slash prices, add incentives and will give away thousands of dollars in upgrades and cash to sell these homes. Small builders will likely face foreclosure and bankruptcy in their effort to match the deals offered by the big boys.
What is going on in your housing market? We would love to hear from you about what you see and hear. Thanks for contributing. We will pass the info along to others that are interested.