As published in Scotsman Guide's Residential Edition, June 2010.
June 1 marks one month since expiration of the homebuyer-tax-credit qualification, while buyers under contract before April 30 have until the end of this month to close their deal to retain eligibility.
Although the April 30 date passed with far less fanfare than the original first-time-homebuyer-credit expiration in 2009, it nonetheless has continued to color many of the data points we rely on for industry-trend information.
Pending, existing- and new-home sales were all up in March? Can't trust them — many came via buyers eyeing the credit. Purchase applications closed the week ending April 30 at their highest level in more than six months? Obviously, the credit's doing. The sun's out? Credit the credit.
Whether the credit's influence was a negligible blip or a successful carryover to an expected seasonal-sales-demand uptick will be a question many on the financing side will ask in coming weeks. But according to the Federal Reserve Board, signs may already point to lending anxiety.
As per the Fed's "Senior Loan Officer Opinion Survey on Bank Lending Practices" this past April (sctsm.in/FedLOSA10), 34 percent of respondents said demand for prime residential mortgages was weaker in the previous three months. That's up from 14.3 percent in the same survey in April 2009. Meanwhile, 43 percent reported weaker demand for nontraditional mortgages, compared to 28 percent a year earlier.
Larger banks, however, reported some easing of underwriting standards for prime loans and home equity lines of credit this past April; a year earlier, no respondents reported as much.
Of course, many lenders and brokers also must contend with the Federal Housing Administration's new oversight and net-worth rules, which Weiner Brodsky Sidman Kider PC's Jim Milano breaks down in this issue. And then there's financial-reform legislation, decisions regarding Fannie Mae and Freddie Mac, and more coming down the pike.
Let the great breath-holding begin.