Home prices are rising at a faster rate than incomes and mortgages, causing an affordability problem for middle class home buyers according to Trulia Chief Economist, Jed Kolko. One of the problems Mr. Kolko pointed to, according to a recent article on Fox Business, is the lack of new construction in the more expensive cities.
Tighter mortgage credit requirements have been an ongoing issue for many Americans who have decent credit history but still can’t seem to get a mortgage. But changes could be on the way.
A new program was announced by Housing and Urban Development Secretary Shaun Donovan. In a recent speech to the National Association of Realtors’ Regulatory Forum, Donovan talked about a new program called Homeowners Armed with Knowledge, or HAWK, a program designed to improve access to credit for consumers.
Another change in the mortgage landscape is the two government-run mortgage biggies, Fannie Mae and Freddie Mac, will be focusing on making credit more available, according to Mel Watt, the new overseer. These changes are supposed to alter the banks’ high standards put in place to counteract the lax standards prior to the market crisis.
While these won’t change the fact housing prices are rising, they might give borrowers a better shot at getting a mortgage, which could not only help sell existing homes, but also jump start the home construction field, creating jobs and a wider selection of home inventory.