Mortgage lenders are tightening their standards even more restrictively as economists are concerned that the housing sector will experience another downward trend in sales. Homebuyer tax credits that helped increase sales earlier in the year have expired and home sales decreased over 25% from last year. Since the U.S. has relied on development from the housing market to help with economic growth in the past, tightening credit standards at the bottom of the business cycle will slow recovery. In a time where borrowers are needed to fuel the economy, constricting the standards will only add to the vicious cycle and make it hard for the housing sector to dig itself out of the deep hole they are already in.
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