As those looking to buy Houston homes have likely noticed, the process of getting a mortgage has become significantly more difficult over the past few years. Officials with the National Association of Realtors say lenders know they are turning away creditworthy borrowers.
In a podcast (http://www NULL.realtor NULL.org/about_nar/presidents_report/_podcast_archive/lenders_credit) posted on the NAR's website, the group's president, Ron Phipps, said that in meetings with lenders such as Citibank, banks are acknowledging that they know worthy buyers are having trouble getting a mortgage.
"The pendulum has in fact, on the credit side, swung too far," Phipps said.
Phipps added that an analysis by NAR chief economist Lawrence Yun of the credit requirements now, compared to what they were previously, found that roughly 15 percent of potential buyers who could have gotten mortgages in the past are now cut off. Phipps said those conditions are limiting the slowly-recovering housing market.
However, low mortgage rates, along with the prevalence of low-priced Houston foreclosures, have helped spur many recent sales. According to the Houston Association of Realtors, roughly one in five sales in December was for a bank-owned property.
Realtors: Tight lending standards stopping 15 percent of sales
Federal Rate Cut felt Globally
How do you think that the USA will react over the Federal Reserve cutting the rates by 0.5 percent to its all time lowest level of 1.5 percent in over four years. This drop is an attempt to try and improve the lending that keeps the U.S. economy moving forward.
Bank of America, Wells Fargo and other banks cut their prime rate by half a point to 4.5 percent, also the lowest in more than four years, after the Fed announced its decision early Wednesday.
For millions of Americans, the Fed’s cut means borrowing money becomes less expensive. Home equity loans, credit cards and other floating-rate loans all fluctuate depending on what the Fed does.
Following in step with USA, Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank, South Korea, Hong Kong and Taiwan also cut rates.
Today, the market (Wall Street) closed at its’ lowest since 2003 even though the Fed cut rates on Wednesday. Globally people are hoping for an upward change in the markets on Friday.
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