Some promising news from the National Association of Realtors (NAR) Chief Economist Lawrence Yun should hopefully provide confidence to consumers and the real estate market in the upcoming months. Yun predicts that in the next year that home prices will increase by 2% and that home sales will be up by 4%. Yun also predicts that home prices will rise an additional 3% and sales to increase another 6% in 2013.
According to Yun, the market is "strange" because buying conditions (low interest rates and low home prices) are ideal but sales seem to not be growing.
Perhaps strict underwriting requirements from lenders is to blame. Lenders are looking for borrowers to have credit scores no lower than 700 in order to qualify for a loan and in the upper 700s in order to secure a low interest rate. Unfortunately, these requirements are decreasing potential home sales by 20%
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