National Housing Market About To Slide More!

You may not like roller coaster rides but may find your self on one nonetheless, if you are a home owner because real estate is set to drop this year after recovering some of its 2008 gains.

A trio of gathering government storm clouds will be responsible for the drop that some predict could mean another 10% to 15% slump in prices, they say.

Here it is three years after the peak and it’s still all about housing, said David Rosenberg, an economist at Gluskin Sheff & Associates in Toronto. The outlook for the market is extremely clouded.

Increasing its loan standards may seem counter intuitive to anyone who is familiar with the function of the FHA, and the changes it is proposing will make getting a home loan a little harder.

Using the huge number of loan defaults, the FHA reasoned that raising the required down payment for buyers with the lowest credit, increased the PMI premiums for its loans, and reduced the amount of seller pre-paids and closing costs allowed.

With fewer people having high enough credit for standard loan programs, more people have turned to using FHA backed financing to get their loans done.

Due to these trends many borrowers are considering the FHA as their only source available for financing their home purchasers, which means the government will be backing even more loans than the already burdened Fannie Mae and Freddie Mac do. A lot of people who can’t get loans from the FHA will have nowhere else to turn.

With today’s economic hardships being so prevalent, government backed mortgage programs, like the FHA program, are crucial to the real estate market recovery, and help buyers find financing who may not otherwise be able to do so.

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