“No Plans to Rewrite the American Dream”
Prior to my mortgage broker career, which started in 1979, I was a Realtor. A company I started in 1970, that I sold in 1985. At the time 100 agents and 5 offices. At the time I did an ESOP and sold to 13 of my agents.
There have been a boat load of changes, more to do with regulations and technology. I can tell you that, not much has really changed, when it comes to the attitude of the homeowner or homeowner, want-to-be’s.
We have gone through high teens for interest rates. There were no shortage of home buyers. In spite of the interest rates, buyers were plentiful. I remember once saying, “If rates dropped down to 12%, I could refinance the whole world.” Remember, at the time, no credit scoring or restrictive regulations, as we have today. Oh, and less defaults.
There are no shortage of home buyer want-to-be’s today. There are a number of reasons, they are not buying.
The first is fear. Newspapers, ratio and internet talking about how bad things are or at least have been. I do preapprovals for these folks all the time and I ask them why they are waiting, inevitably they answer, fear.
The second is credit scores and regulations/restrictions, after short sales and bankruptcies. This is such a huge group of people, that desperately want to buy a home.
Let me know your thoughts.
Buy, Sell or Rent: Americans Rewrite the Dream
American homes have never been more affordable than they are today. Prices are down dramatically, mortgage rates are at record lows and desperate sellers are willing to make concessions.
Still about one third of Americans choose to rent, despite the fact that 85 percent say owning makes more sense financially than renting over the long term, according to a new Fannie Mae study.
Buying is cheaper than renting in most U.S. markets, according to another study from online real estate sale site Zillow. The upfront costs may be higher, but Zillow looked at what it calls the “breakeven horizon,” which is when the cost of owning (including down payment, taxes, fees) meets the cost of renting. While markets will vary neighborhood to neighborhood, the breakeven point in many markets, like Minneapolis, Baltimore, Denver, St. Louis, Chicago and Charlotte, is under three years.
The main barrier to homeownership for many, however, is the mortgage market.
The days of free-wheeling lending are over, and credit worthiness is now king. There are low down payment options, like the FHA, but too many potential buyers don’t meet the credit qualifications either for the great low rates or for the loan itself.
The other half of the equation is attitudes.
image: Sujin Jetkasettakorn/freedigitalphotos.net