According to the National Association of Realtors most recent Realtor magazine, there are 40 million renter households in the United States. What is keeping them from buying?
According to statistics, in a normal market, about 40% of the sales are first time buyers. About 27% of sales at this time are first time buyers. This reduction in first time buyers is due to several factors.
New QRM standards imposed by the Federal government are definitely having an impact on first time buyers. Credit score requirements are up and so is the reqirement for down payment money.
Additionally, new home construction is not up to "pre-bubble" production and mortgage default rates have been at historic lows in the last few years. Is it time to ease up on mortgage qualification standards instead of tightening the noose? Will builders have the confidence to build when loan standards are so tight?
With interest rates still at historic lows and home pricing set to rise it seems that there is nothing to fear but fear itself!