Home Prices and Qualifying Drop Considerably!

Is It Time To Buy A Home Yet?

As employment drops to 42 year lows the cost of home ownership has also dropped enabling more people to quality, you just need a job!

Homeownership costs have fallen 20% since 2006 and 43% from the peak in this cycle.  The decline in price was more than half of that trend, and the remainder due to the decline in mortgage rates and increase in incomes. To buy a median-priced single-family home of $164,600, a person who earns $52,800 per year, only needs 25% of their income to cover the payment, they needed 44% in July 2006.

For buyers the monthly payment is far more important than the price of home purchase. Although money is available to lend, government restrictions in Fannie and Freddie lending policies are so arcane and inflexible under new rules that people with good credit and income may be unable or hard pressed to qualify.  In some occasions Fannie and Freddie hold mortgage brokers liable for the loan if the borrower should lose their job six months after purchase.  Should government get out of the way and provide less cumbersome and paranoid appraisal processes and qualifying rules the housing market should be able to start to climb from its current dismal levels.

The preceeding information was obtained from John Burns Real Estate Consulting twitter.com/jbrec