A recent AP/AOL poll released this week shows a shocking and almost disheartening reflection of America's willingness to purchase a home. The poll recognized that over 60% of qualified home buyers said that they will not purchase a home in the next 2 years, up from 53% just two years ago.
The biggest reason that the poll identified as to why these qualified buyers aren't buying is because that can't afford the loss on the home they are in now. So, let me put this into prospective for you.
First of all, the country is currently going through a credit crisis. People can't get credit because banks and lenders tightened their standards for lending due to the fall of the sub-prime market. This credit tightening / crisis knocks out a lot of potential buyers who have fair to relatively good credit. To make it simple, for many people having "good" credit isn't enough to buy a home.
Secondly, the prime market is taking a huge hit with the fall of the sub-prime market. We are now seeing banks refuse to do Home Equity Lines of Credit (HELOC's) or at the very least, lowering the available credit for those who already have HELOC's. In worse case scenarios we are actually seeing banks dropping the HELOC credit line below the amount of credit already spent by the homeowner and are now calling the HELOC's in for payment. Make no mistake, if you have a HELOC and your homes equity can't substantiate the amount of credit your originally received, your bank will drop that credit limit or even stop the HELOC all together. As you can imagine, this has a drastic effect on the housing market. Homeowners now can't rely on the sale of their property to pay off the debt of the HELOC, let alone have money for any down payment on the next home they buy.
Thirdly, energy prices are hitting everyone in the pocket book. The simple fact is, we are seeing food inflation rise the fastest than at any other time in the past 17 years, soaring gas prices on the market for the past three years have seen an increase at the pump on an average 25-42% annually, the weakening dollar against foreign currency is causing inflation fears to run rampant and last but not least, continuing rate cuts by the fed's have seen no real impact to the individual consumer, all adds up to a worsening market than any of us could have imagined.
Make no mistake, homes are selling however, for many of those sellers, they are taking a hit on making a profit, if they make a profit at all.
Good luck God Bless.