Just like a ride at an amusement park that slows down right before plunging to the steepest decline in the ride, our real estate market may be headed for a similar sudden decline following a small recovery of its 2008 declines.
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.
After a 36 month departure from the peak of the real estate market, the topic is still real estate and the current trend in prices . Despite the bad news, real estate appreciation was actually reported across the nation in 2009, but it is doubtful for 2010.
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.
As people experience credit difficulties and cannot present high enough scores to qualify for conventional programs, more people are turning to FHA backed loans for assistance.
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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