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.
With a drop of 10-15% anticipated, the coming price drop has been pushed by a combination of federal factors that are combining for the perfect storm in real estate.
Three years after the peak of the real estate boom and the news is still buzzing with real estate news. Chicken Little Syndrome initiated the bust and has continued its decline, even though we did have 7% appreciate across the nation this year.
The function of the FHA is to make sure those who would not normally be able to buy a home, can do so, but they are raising their standards which will make buying a home harder for poorer buyers.
Due to the inundation of foreclosures, the FHA reduced the number of qualified buys by forcing those with the weakest credit to pay higher payments for mortgage insurance, increasing the required down payment and limiting seller contributed closing costs.
Conventional loan programs are having a hard time placing loans with qualified borrowers, who are turning to FHA financing for easier loans
With unemployment swamping the real estate market with foreclosures, many buyers have an easier time getting qualified with FHA loans, so they are increasing in popularity. Being forced to utilize FHA type loans, many buyers are finding a great resource in them in a time when conventional loan money is more than difficult to get.
Until the economic turmoil gets settled down and people begin making more money, programs like the FHA loan programs will be vital to the stability of the housing market, especially in regard to first time home buyers and people with lower credit.
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