Qualifying for a home loan is more difficult than it was in the eighties, but if potential buyers are willing to conform to the standards of that time, they should have no problem in acquiring financing. These standards include a twenty to twenty-five percent down payment, income-tax returns from several years, and a realistic appraisal of the property’s value.
At the current rate of houses selling, the inventory of unsold houses is about twice the norm. Add in the sweeping foreclosures on the way and property values should drop even more. However, the President’s “Homeowner Affordability and Stability Plan” should ease the situation. The plan, along with rock-bottom pricing on homes, should be enough to spark would-be homeowners to enter the market. However, the economy will keep some potential buyers out of the market. Thus, supply of empty homes will continue to surpass demand and prices should continue to drop. Some analyst have recommended the creation of a government agency that would offer to buy homes at an average of 2.9 times the median income in the local area. The agency would not have to actually buy many homes as the offer itself would serve to set a floor on the price of unsold homes. The houses actually purchased by the agency could be rented out until the market turned and then sold at a profit.