Mortgage Discussion for the Panhandle area

With the news out today that we had a 3.6% drop in new home sales for September I find myself asking, how? Interest rates are still at all time lows hovering just below 5%. Home prices are lower than they have been in years. It seems like we should be in a housing boom except for one number we keep hearing about. That is the 9.8% unemployment number. More people can buy today than when this mess started. Yes, our mortgage guidelines have restricted somewhat but with the lower rates and prices more people qualify today based on the lower payments. They are just scared to buy thinking they may be unemployed soon. So how do we handle this and get more sales?

That is a question real estate agents and brokers must answer but when asked in the mortgage process we generally deal with it talking numbers. First time home buyers have had plenty of marketing dollars spent on them already and if they have not moved they may not. Even with the possibility of the tax credit going away. The group of people not marketed too and ignored in the current environment is second time home buyers. They currently own a home and still concerned about employment numbers but often still have equity in their home and growing their family.

Most of the second time home buyers we see either have cash or with the sale of the current home will have cash to put down on the newer, larger home. In this case we are still advising them to keep the cash in their pockets for a "rainy day" and buy the new home with as little money out of pocket as possible. I currently have one loan closing on a Rural Development Loan at 102% loan to value with no money down. The loan is easy enough but the real different part of this deal is he owns his current $185K home free and clear and is selling it soon. He plans on holding and investing that cash. He has no worries about loosing his job and is excited about closing. Your typical customers may not be in his group but 5%, 10% or 20% down may not be in all customers best interest today if they are worried about the possibility of loosing their job.

I always believe that in a market where you see who is being marketed too heavily look at those who are ignored and create a niche for yourself in that market.