Consumers who may be considering buying a new home may have the option to find a low price on a mortgage and, despite recent increases, interest rates remain relatively low, which could lead to an overall affordable home loan that could be accessed by certain buyers, yet there are concerns that many individuals are simply unwilling to enter the housing market at the present time. While home prices have fallen across the nation, as well as, interest rates remaining at near-record lows, home buying opportunities do offer the potential for a great deal of affordability but there are some hindrances which may be preventing buyers from entering the housing market.
Concerns over future reduction in home prices is one of the causes that is being said to result in low home buying numbers as home values have continued to drop in many major cities, and for this reason, homeowners have either demanded lower prices on mortgages as they feel values could drop or are simply unwilling to enter into the housing market at a time where many deem will home prices to be unstable.
An article on the WallStreetJournal.com quoted a homebuilder consultant who stated, “There are just not a lot of renters with confidence, with a down payment, with good credit, and without a lot of additional debt,” which also sheds light on another issue that may be preventing home prices from increasing and buyers from entering into the housing market.
There are still lending practices that are being implemented by banks which have made credit tight for potential homebuyers and, for those who may not be in an optimal position but may have a decent credit score, they are still finding that access to home loans has been difficult. Some financial institutions may require a higher down payment and credit score, but there is also the fact that some homeowners simply do not view buying a home at the present time as a good investment.
Obviously, there are those who disagree as, again, there are home buying opportunities which may present a low home price and, for those who qualify, a low mortgage interest rate as well, but again, there is caution being exercised by many potential homeowners as they wait to see what becomes of the housing market and home prices. There are arguments though that as home prices have dropped so substantially in many areas, even an additional decrease in value wouldn’t prevent homeowners from potentially seeing gains as the economy recovers in the coming years, but this has not been enough to prompt some consumers to take advantage of low prices and interest rates currently being offered.
Yet, the number of homes simply sitting empty is reportedly on the rise and may require either mortgage lenders to loosing home loan practices, but again this was one of the main reasons for the initial housing bubble burst years ago. However, there are those who feel that despite a backlog of unsold homes and hesitation on the part of consumers, when factors like unemployment began to become less of a strain on the economy, home sales could begin to pick up and correcting the troubles that have been seen in the housing market over the past months.