With spring now here, more and more home buyers will begin looking for homes and home sellers will begin preparing their homes for the market. Economists at the National Association of REALTORS® (NAR) state (and I agree) that there is a lot of pent-up demand as potential home buyers held off on buying a home in a tough economy break loose of their chains.
While expectations among real estate agents like myself are high for 2012, it is important to be cautiously optimistic. According to NAR and others, consumer confidence is key as the nation continues to recover from the Great Recession.
However, according to a US News report, more people are renting than buying and lending standards are still too restrictive despite low interest rates.
NAR economists cite credit overlays, buy back risk, FHA increases on mortgage insurance premiums, and fees the government is imposing on the mortgage market and the cause of the restrictive lending requirements.
The fees were imposed on the mortgage market by the government to pay for the payroll tax cut, according to Realtor.org.
“Congress mandated the fee increase to help it extend the payroll tax cut at the end of 2011, so you have the unusual situation in which funds generated by the housing industry are being plowed into a non-housing use.”
Despite these challenges in the mortgage market, all indications point to betters days ahead. If you are thinking of buying or selling a home in western Massachusetts, or just would like to see what the real estate market is doing in your community, call Michael Seward at 413-531-7129.