Interest in the Louisville Kentucky Home buying market for February 2008 is up from January 2008 by 13%, but a new problem is putting the brakes on buying a home, FINANCING!  New numbers just released by the Greater Louisville Association of Realtors show the number of homes that went under contract in February 2008 was 1165 compared to 1015 in January 2008. But, the number of homes that actually closed in February 2008 was down 13 % from the January 2008 under contract numbers. All indications are that mortgage companies are taking longer to finance or are refusing to finance loans.  So some homes that go under contract are taking longer to close or don’t close because of financing issues.

 

For months now, we’ve been watching mortgage companies tighten requirements to get a loan. Now we’re seeing hard proof that even lower interest rates won’t help buyers if the mortgage companies won’t grant those potential buyers home loans. The problem stems from several years of home loans being granted to people who did not have the credit history to support those loans. The mortgage industry was looking for the profit without considering the consequences. With so many home loans ending up in foreclosure and the government cracking down on mortgage companies who made those loans, home buyers in 2008 are paying the price for the past mistakes of the mortgage industry.  I actually saw an underwriter reject a loan because the potential buyer signed his name a little differently than the signature they had on record.  The closing attorney had the proper identification of the buyers but that wasn’t enough for the underwriters. The closing process was delayed because of it. We should point out that not all mortgage companies are responsible for the bad loans but all mortgage companies and buyers are now suffering from the crackdown by underwriters.

The number of homes going under contract in February 2008 compared to February 2007 is still down by 3%, but that’s a marked improvement from double digit negative numbers from months before.  As of today homes were averaging 88 days on the market and there are 9976 properties currently for sale in the greater Louisville area.

With the potential of another drop in interest rates coming in March 2008 and a positive feeling in the Louisville Kentucky housing market, Louisville may end up leading the country in a home sales recovery.  Now all we need are those mortgage companies to loosen lending guidelines so that people who are legitimately qualified to get a loan can by a home.