The most negative analysts believe that because loan standards are now much tougher, at least 10% to 15% of
the people who could have qualified for a home-purchase loan last year can't do so now. Meanwhile, many of the
people who would still qualify for a loan don't want to buy a house now because they think prices will fall further.
So the housing market is likely to remain weak for at least another couple of years, they believe. One reason is
that it takes time to absorb all the houses and condos waiting for buyers. The NAR counts about 4.2 million
resale homes for sale, along with more than 500,000 new homes on the market. That is enough to last about
8½ months at the recent sales rate; a supply of five to six months generally is considered balanced.
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