From the AP:
The American dream of homeownership is still attainable. Buyers just have to deal with a new set of realities.
A year after the collapse of the housing market triggered the financial meltdown, lenders are demanding more money up front, high credit scores and proof of income. Paperwork must be in perfect order. Patience and persistence are required. And don’t even bother asking about a subprime mortgage.
It’s a vastly different set of rules from earlier this decade, when home prices soared and mortgages were easy to come by.
In some ways, it’s a return to the standards that emerged as the World War II generation bought its first homes in the suburbs: Buy what you can afford. Stick to a 30-year, fixed-rate mortgage. View your home as a place to live, not as a piggy bank.
For people trying to sell their homes, the standards are different, too: Be patient and maybe even lower your asking price, because the balance of power has swung strongly to buyers.
Nearly everyone in the real estate industry agrees on this much: Another dramatic boom-bust cycle isn’t likely soon. Albert Saiz, assistant real estate professor at the University of Pennsylvania’s Wharton School, expects that new regulations and a different consumer mindset will help real estate return to a more traditional cycle.
There will be some ups and downs, Saiz said, but in the long run, prices should move higher. “In the end, the United States is still growing,” he says. “We’re going to need more housing.”
Pava Leyrer, president of Heritage National Mortgage in Michigan, notes that the majority of people are still paying their debts. She’s confident the market will rebound once the unemployment rate begins to fall.
“I really can’t imagine we would go back to the same situation because it took an exact wrong mix of everything for that to occur,” she says. “If it ever did happen, I’ll be long dead.”