Home Sales Lagging, Tight Credit May Be the Culprit

An article in the Wall Street Journal that explores the (still) lagging home sales market has a nugget of data that won’t surprise many apartment managers:

But price hasn’t been the only thing holding back the housing market. The Federal Reserve’s senior loan officer survey shows that as the economy has recovered, banks have been far slower to relax lending standards for mortgages than for other types of loans. In recent quarters they have actually tightened a bit.

Applying hard lessons learned during the bust, households may also be engaging in some self regulation, demanding higher down payments of themselves and more assurances that they will have the wherewithal to make payments…

It is cheering that the price and supply problems that have been holding back housing are showing signs of improvement. True recovery, though, rests on employment improving to the point that banks are more willing to extend mortgages to households and households are more willing to take them. There is hope that with the recent pickup in the job market, that time is no longer over the horizon. But it hasn’t come yet.

Until that time comes apartment managers will continue to see strong demand for their products.