30-year fixed-rate mortgage, average in Western U.S. for week ending February 22, 2007. Blue line is Freddie Mac forecast made 2/8/2007.
“Mortgage rates eased a little more this week, as market participants were concerned over how much drag the slowing housing market may have on economic growth,” said Frank Nothaft, Freddie Mac vice president and chief economist. “For instance, last week’s release of housing starts for January showed the weakest reading since August 1997, due to the abundance of homes already on the market to purchase.
2 responses so far ↓
1 Cbass // Feb 26, 2007 at 8:04 pm
John,
Found this gem in the AZ Republic today…
“”No-money-down loans to borrowers with low credit scores “are going to be a thing of the past real soon,” says Bob Moulton, president of Americana Mortgage Group, a Manhasset, N.Y., broker.
Economists don’t expect the tightening of standards to tank the economy because loans remain plentiful for borrowers with good credit.
But “at the low end, it ought to whack 5 percent out of effective home demand right now,” says Thomas Lawler, a housing economist in Vienna, Va. In a recent report, Keefe, Bruyette & Woods analyst Frederick Cannon said “constraints on lending to first-time home buyers are likely to prolong the housing downturn” by limiting sales of entry-level homes, making it tougher for the owners of those homes to trade up.”"
http://tinyurl.com/3c8beo
So I guess the lenders are tightening credit. Even if it knocks out only 5% of buyers, coupled with the lack of speculative demand this could be devastating!
2 John L. Wake - Realtor // Feb 28, 2007 at 1:25 pm
Whew! Only 5 percent? That’s cool. I was worried it would be more.
That change will slow the recovery but in the long run the market will be more stable which is generally considered to be a good thing.
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