U.S. banks continue to tighten lending. This is going to be a bigger problem than many economists are forecasting. Friends in the mortgage industry are telling me you have to be "rich" just to get a home loan now. The longer it stays this way, the lower home prices will fall. Eventually, it will hit a bottom, but it might not be until next year. The one advantage is that more people will be able to buy homes at the lower prices.
About Me
- Dr. Steven J. Balassi
- I teach MBA and Undergraduate economics for several Institutions in the San Francisco Bay Area. My publications focus on income inequality and how we can reduce it.
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16 comments:
I agree if it won't be a year until people are able to buy houses then they will be able to save their money and by the home that they really want and never thought they could instead of what they can afford in the market right now i think its a good thing and plus it is a buyers market which means it will be easier for people to pay the prices they can afford
I agree with tracey as well, I think that people will be able to save thier money and spend it in somehting that they want to buy, for example a house wich they thought they could never buy.
I also agree, but at the same time the keyword is "maybe" which means it might not even happen.. for years. And maybe possibly by that time banks might even begin to change who their loans are being given out to if they are only giving them out to the "rich"now who knows what standards they will adapt in the years to come when everyones able to afford a home.
So the "rich" that probably already have homes can buy homes.. but what about the rest of us! Even in a year, with all of the bills and necessities (and a few wants), it will be tough to save for a home. I'm glad I'm not in the market for a home right now, but for those who are, I empathize! Hopefully the market will hit a bottom by next year so that more people can afford a home.
This is a very important step for our lending services and for the people. We have to learn to get away from living off of the borrowed dollar. Our times consist of to-much borrowing and lending: "You can have the American dream - a house - with no money down and no payments for two years".
i think with the prices of homes right now, more people can potentially afford to buy, but i also think that a lot of people are getting into homes, that even though they are cheaper they can not truly afford. i dont know when the housing market will turn around but i think the forclosures will continue at alarming rates.
I think it can be profitable that prices of homes are falling because then buyers can find better deals. However, if lending is tightening many people will have difficulty getting the loans for the house. Plus this is a bad sign for reality companies.
I think it can be profitable that prices of homes are falling because then buyers can find better deals. However, if lending is tightening many people will have difficulty getting the loans for the house. Plus this is a bad sign for reality companies.
Home prices are getting lower and lower. The real estate market is as low as it has been in years. Lenders are being strict. It is ironic that in order to get a loan nowadays, one has to already be rich. Hopefully the market will get back up to speed sooner rather than later.
My best friends mom told me that this is a huge problem. She sells houses in Blackhawk and she told me the markets are not going well right now.
she said you probably want to buy a house later on. And agree with Professor Balassi when he believes that it will hit a bottom and will allow us to buy homes cheaper.
It seems somewhat ridiculous that banks are tightening lending to a point where it seems only rich people can get a home loan. In my view, if you're rich you don't need a loan, and if you're poor then you should get one. With home prices lowering though, it might not be too much of a problem for the poor. They just have to wait for when the prices drop.
This may be positive because not only will it force people to spend only the money they really have, but it will also lower the price of homes. This is a more realistic operation for the purchase of a home, and seems to be a positive idea that may ground people, and slow down the spending of money that people do not have.
Yes, More people will be able to buy houses but there goes another profession. The real estate industry will drop dramitcally. But at least people will be able to save money and buy a house.
Maybe the banks are doing that so that their business will survive? I don't really know. It's good though for people who have the money to buy a house for a lower price. For exemple my young friend was able to buy her dream home for more half the price, good for her. Umm it doesn't sound good that only the rich are gonna be able to buy homes to invest and get richer.
Maybe the banks are doing that so that their business will survive? I don't really know. It's good though for people who have the money to buy a house for a lower price. For exemple my young friend was able to buy her dream home for more half the price, good for her. Umm it doesn't sound good that only the rich are gonna be able to buy homes to invest and get richer.
banks have kind of screwed up this recession. they have made lending easy and have been giving out more than people can handle. in a recession people loose money and it is hard to make payments. so the banks do need to tighten their lending capabilities.
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