credit card problems

 

Economic Precipice - Home Buyers Drop Out of Sight


Although the government bonuses offered to new home buyers was extended to those buyers who had owned previous homes and although the program was recently extended to allow more time to finalize and close home sales that were in progress, the program has ended.

Home sales immediately fell to the lowest level in thirteen years.  The sudden, severe drop in home loan applications is troubling.  There are many areas of the country where the real estate market is glutted with homes for sale.   Prices have dropped drastically as the housing market has collapsed.  How can it be that in the greatest buyer's market the country has seen for many years, there are few buyers to be found?

Mortgage rates dropped last week but that was not enough to spur new mortgage applications or much activity in refinancing either.  The obstacles for buyers are high.  Credit is extremely dfficult to qualify for and many who were qualified took advantage of the recent government program.  There are many unknowns in the housing market going forward.

Home prices are predicted to continue to fall at least until the end of 2010 and consumers are wary of buying in areas where foreclosures continue to rise and homes stand vacant for months or years.  Last March the Federal Reserve stopped purchasing mortgage backed securities sponsored by the government in an attempt to keep interest rates low.  The purchase program at last report had reached more than $1.4 trillion.  The future of home prices may remain depressed becuase of the glut of foreclosures in so many cities across the U.S.

At the same time, murmers from economists predict potential for inflation which would have the effect of raising interest rates.  At the end of 2009 fully one of every five homeowners owed more mortgage than their homes was currently worth.  The public is slowly becoming aware of the huge threat that poses to any recovery in the housing market.

The housing market is plagued by fears of continued unemployment, tight credit markets and consumer confusion over foreclosures and short sales.  Adding to the confusion are concerns about the ending of the home buyer tax credit, a confusing government bailout program and the growing belief of a double dip recession.

It is not all doom and gloom, however.   For those homeowers who can qualify for a mortgage, the quality of the home they can buy is much greater than it would have been three years ago.  For those who know where they want to live and know the area's potential in the future it can be a great time to buy a new home.  The problem for the housing market is that those are prime buyers and their number is limited.  The number of active real estate agents and brokers has fallen substantially and real estate sales isn't the first job choice for many today.