SterlingResidential.com | Buying & Selling Residential Properties in Texas | Houses for Rent Houston Area | Humble Atascocita Kingwood & Spring Texas Realtors | Sterling Residential®, Realtors® | Real Estate Broker: Waiting for economic news that will convert fence-sitters into home-buyers

What’s going to coax fence-sitters into making a home buying decision? We’re not finding lots of encouragement in today’s media, but there’s some favorable finance and market news to report. Home buyers and investors with good credit, verifiable employment, and down payment funds are in the market for homes — and they are securing affordable financing.

While new and existing home sales are down in Houston, local builders in the NE Houston communities of Fall Creek, Summerwood, and Lakeshore are doing brisk business for medium and high-priced homes, and sales for existing homes remain stable throughout Houston including the market areas of Humble, Atascocita, Kingwood, and West Lake Houston.

Investor traffic is picking up, too, as they take advantage of increased foreclosures — HomeVestors, a national home-buying franchise, reports that Houston is among the top investment markets they track. A proposal to grant foreclosure investors a $7,000 federal tax credit could make real estate investing even more attractive.

That’s not to say that all’s well — the current lending environment is volatile and uncertain as lenders add more applicant scrutiny and stringent underwriting guidelines. An example is a new minimum credit score threshold applied by lenders for FHA financing — although the FHA uses no such threshold, lenders are using credit scores to increase loan quality to an attractive level for investors who fund loans with their mortgage-backed securities purchases. The effect is to reduce FHA financing to those home buyers who otherwise would qualify for sub-prime loans. Getting those investors back into the market, however, will be essential to expand the pool of mortgage loans available to home buyers.

Additionally, many of yesterday’s loan products are now offered on a limited basis only to the best qualified borrowers. Adjustable, alternative, low-doc or no-doc, option, or sub-prime are terms popularized during the mortgage boom that are nearly verboten today. While sub-prime loan offers have all but disappeared, efforts to revitalize the FHA could expand options to those borrowers now shut out of financing.

As the number and types of loans offered today are limited, it’s the best prepared home buyers who are finding affordable loans. Good credit, low debt levels, verifiable employment, and down-payment resources have increased emphasis in today’s lending environment. With financing options limited, it’s more important than ever to plan ahead and speak to a lender early so you’ll understand how the process has changed during the last 12 months.

Given today’s news, it’s not unexpected for home buyers to be sitting on the fence. While many market and economic uncertainties exist, there remain solid fundamentals encouraging a home or investment purchase this year. Find a local source for market and financing information — our initial consultations are a relaxed way to answer your real estate questions, and it’s our way of demonstrating our commitment to informed consumers.