Nicleeson, I got this off Yahoo finance a few days ago. Lots more like this out there! ----------------------------------------------------- 1. Lower inventories: The dramatic oversupply of unsold homes is finally beginning to fall--by about 4 percent last month, according to the latest figures from the National Association of Realtors. That's still an 8.8-month supply at current sales rates (well over the six-month threshold that signals a buyer's market), but it at least suggests that supply and demand are beginning to come in line.
2. Firming prices: Although one month does not a trend make, prices of existing homes have staged a bit of a comeback of late and are actually higher than they were a year ago, according to the NAR. Unfortunately, sales volume has continued to drop as sellers brush off buyers' low-ball offers. But at least those houses that do sell are going for a bit more.
3. No subprime spillover: As spooked as stock market investors have been by the subprime mortgage mess, the overall economy is holding up just fine. Employment is strong in most parts of the country, and consumer spending--the economy's most important growth engine--is humming right along, both of which suggest that home buyers remain able, if not willing, to pull the trigger when the right house comes along.
4. Steady mortgage rates: Although they've ticked up a bit since earlier this summer--to about 6.6 percent for a fixed-rate loan, versus about 6.2 percent a month ago--mortgage rates remain below their historical norms and aren't expected to rise substantially in the near future. So with personal income rising and house prices steady or falling, buyers can now afford more house than they could have a year ago.
5. Tightening mortgage credit: Lenders are taking a much closer look at mortgage applications--verifying income, assets, and the like--as they look to reduce their exposure to bad loans. The long-overdue move may slacken demand over the short run, but it will prevent the sort of surge in delinquencies and foreclosures that has recently wreaked havoc on the market. ---------------------------------------------------- Just like here, the US has had a normal housing boom and decline. Subprime mortgages have had nothing to do with the fall in house prices in the US. But falling house prices scares the s_hit out of sup-prime mortgage brokers because they lend borrowed money to high risk clients at a higher rate and take no deposit. The US housing sector is healthy but that's not true for subprime mortgage brokers who want rates lowered to increase demand for houses.
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