Housing Market Seeks Direction
With some home builders forecasting an increase in profit and home prices making up all the ground they lost during the recession, the question now is; where does the housing market go next?
Some lenders are saying prices are declining or even going to fall through the end of 2010. Everyone seems to have a different perspective on the new future. Obviously a big factor impacting the near future is the availability of mortgage finance. Considering the still low interest rates, mortgages are now at their most affordable in decades, with interest payments occupying a smaller percentage of our income. Of course outside pressures create a vulnerable market. Many experts feel if the economy stalls then mortgage lending will slump. If the recovery does stall, many experts are forecasting flat prices. In this climate, lenders need to resist the periodic urge to be cautious and restricting with mortgage finance. It is still a volatile market, but there is always the risk of a borrower defaulting on a mortgage, no matter what the circumstances. The big mystery remains the timing of hikes in the interest rate. It is this unknown that determines the behavior of those seeking a first time mortgage or remortgage.