Some are afraid the real estate market may be looking a lot like it did prior to the housing crash in 2008. One of the factors they’re pointing at is the availability of mortgage money.
Recent articles about the availability of low-down payment loans and down payment assistance programs are causing concern that we’re returning to the bad habits of a decade ago. Let’s alleviate the fears about the current mortgage market.
The Mortgage Bankers’ Association releases an index several times a year titled: The Mortgage Credit Availability Index (MCAI). According to their website:
“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is…a summary measure which indicates the availability of mortgage credit at a point in time.”
Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available the mortgage credit.
Here is a graph of the MCAI dating back to 2004, when the data first became available:As we can see, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI (to below 100), as mortgage money became almost impossible to secure.
Thankfully, lending standards have eased since. The index, however, is still below 200, which is half of what it was before things got out of control.
It is easier to get a mortgage today than it was immediately after the market crash, but it is still difficult. The difference in 2006? At that time, it was difficult not to get a mortgage.
Start Your Home Search:
Are you ready to start searching for your next home? It’s a great time, we have more inventory than we did the past few years. I encourage you to explore homes currently on the market to get a feel for the types of homes, locations, and price points. My Denver real estate blog has loads of useful information for home buyers trying to figure out what they want to do. And of course, please call me, or send me an email / text, to discuss your next home and the buying process.
Also, if you are considering new construction, remember the builder’s real estate agent represents the builder’s interest, not your’s. There is no cost for you to have a buyer’s agent represent you. In fact, I may be able to help you save money and negotiate for extras which the builder may not let you know about.
Considering Selling Your Home?
If you are looking to sell your home in the Denver area, I encourage you to work with a real estate agent who has the experience and knowledge to provide an accurate market comparison so you can determine the right asking price. The market is more balanced now and your asking price is an important component of your selling strategy. Contact me today to learn how your home stacks up against the competition and how we can position your property to sell quickly and for a fair price.