Why is the Real Estate market still down? Where are the Buyers? – ask the lenders.

Interest rates are at 40 – year lows  (AGAIN!) Prices are way down. There are many properties available. Real Estate is actually ON SALE! 20% OFF .

So why are the numbers so dismal and the real estate markets still slumping, to say the least

30-year mortgage rates fall below 4% for first time – Oct. 6, 2011.

One answer lies in the lenders rules for approving loans. Right now and for the past several quarters, we have had the best affordability conditions in decades for buying a home. But still existing home sales and new home sales are way down from the levels in 2005. According the NAR reserach, existing home sales dropped 3.5% in July of 2011 and pending home sales dropped by 1.3 percent.

 Lenders strict underwriting requirements are placing a huge drag on the real estate market. The average person does not have the credit score or the cash reserves required to buy. with the rates as low as they are, the lenders requirements must adjust to jump start the market. Lenders should also ease up on the credit scores required for certain loans. There has to be a happy medium between the lenders and the average person wanting to enjoy home ownership.