Nonconfirming Loans Effect Housing Recovery
Home sales are at a near a bottom. The economy is growing slightly, but just barely. Housing inventories are at a high, not yet equal to the level during the recession of 1991, but close. There’s a lot to fear with this economic situation.
The elimination of subprime loans is being exacerbated by a large point spread between conforming and jumbo loans of as much as two percent. The fact that sales are being restrained by the high cost of jumbo loans is obvious from the days most houses are on market. It now takes months to sell a home in most locales. Previously, it took only a few weeks to sell attractively prices homes.
Despite the attraction of much lower housing prices and a huge number of properties from which to chose, sales aren’t booming. The bottleneck has to be in loans. We need more availability of low-rate, low-down payment loans. It’s as simple as that.
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