Tight Underwriting Standards and Decreased Mortgage Availability Reduce Home Sales
Summer typically brings in big numbers for the real estate market, but that isn’t the case this year. In fact, the National Association of Realtors says this has been the slowest summer for home sales since since 2009. June home sales alone were down nearly 20% from last year, and over 3% lower than the previous month.
Although lower-than-average inventory options for buyers and the higher interest rates are the main contributing factors to this slow summer market, another issue for buyers is the availability of loans.
Mortgage interest rates have risen above 7% this summer, the highest they’ve been in over a decade. These rates, along with the limited availability of homes on the market, has translated to lower profits for many lenders. According to the Mortgage Bankers Association, this all has led to a decline in the Mortgage Credit Availability Index.
The Mortgage Credit Availability Index measures the overall accessibility of mortgage credit in the housing market. As this index reaches its lowest rate since 2013, more and more lenders are offering less loan options. Furthermore, the Federal Reserve’s tighter bank capital requirements have forced many banks to reconsider their consumer loan options.
However, not all hope is lost for potential homebuyers in and around the Denver area. You just need to find an experienced and knowledgeable independent home loan originator who has more options available than larger corporate lenders.
Rob Sturms, the Denver native behind Rob’s Mortgage Loans, is one such independent mortgage broker. Sturms and other independent brokers have lower overhead costs, choices of a variety of wholesale lenders, and the ability to explore unique loan options for each potential homeowner. These savings get passed directly on to you, meaning you can save money despite higher-than-average interest rates.
There’s no way to know how long the turmoil in the housing market will last. However, even firsttime homebuyers can benefit from working with an independent home loan originator. Also, keep an eye on mortgage interest rates, as they can change daily.
About Us: Since 1993, Rob's Mortgage Loans has helped hundreds of Colorado residents with home loan needs. You will get an honest, dependable, and highly competent mortgage broker when you work with Rob's Mortgage Loans. Rob works hard to make the loan process as simple as possible.
Release ID: 89108015
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