Abandoning the Home Sale

  • Many consumers have recently faced higher rates or have been forced to put down larger downpayments due to a change to the way loans are classified.
  • The maximum size of a loan that can be financed by the FHA  was reduced forcing some borrowers to make larger downpayments.
  • The minimum size for jumbo loans (i.e., loans not eligible for FHA, Fannie Mae, or Freddie Mac financing) may also have been lowered, forcing many prospective buyers to increase their downpayments and/or pay higher mortgage rates.
  • 16% of respondents with a buyer-client who was impacted by the lower loan limits indicated that their client chose to abandon the home search.  The chart above lists the major reasons why they chose to do so.
  • To read the complete new “Impact of New Conforming Loan Limits” survey, click here >

Ken Fears, Director, Regional Economics and Housing Finance

Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

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Comments
  1. Bette McTamney

    Our company used to pride ourselves on being able to close almost 99.5% of our yearly home sales. Now we are luck to close 65-70% of the sales we bring in. So sad that for so many different strict finance reasons Buyers are not given the opportunity to make that American dream come true! The challenges every day in the mortgage Market make it so difficult for buyers to live in their own home and our members just to make a living.

  2. Ron Knutsen

    I have been a REALTOR for an aggregate total of approximately 15 years. I first got my license in 1983 when rates were through the roof because of the ridiculous economic polices of an inept president and congress. What I am seeing now is even worse.

    I have, for example, married clients who wish to upgrade to put their family in a bigger home, in an area closer to schools the kids attend and where there are more kids their age. They have VERY high FICO scores, don’t need to sell their home to buy another, have a $90,000 down payment and are eager to move. We wrote a $250,000 offer on a short sale (listed for $259,900) back in May and still cannot get it closed because the bank is dragging its proverbial feet in giving its final approval. It will become an REO and the bank will lose an additional $15-20K as a result – probably more as they will likely see a lower offer in the future.

    Combine this type of business practice with a very poorly run government that implements detrimental economic policies and onerous regulations within virtually all industries it touches, and you have a formula for disaster.If our country, let alone the housing industry, is to recover from this sad state, we must elect people who place a greater emphasis on the well-being of the country and their constituency rather their personal well-being. We have, unfrortunately, a Congress ( a term used to describe a gathering of Baboons) and administration comprised predominately of narcissists.

    They create the problems we face, then overreact in their attempts to show us all how much they wish to “protect’ us from others and from ourselves. If people want REAL hope and change, they better wake up, smell the coffee and start voting for people who have ideas that will really fix the problems this country faces or we are all doomed to suffer the plight of the many European Union countries, Greece being a prime example. GOVERNMENT IS NOT THE SOLUTION, GOVERNMENT IS THE PROBLEM!!!!!

    The statistics cited above, and most others, are merely symptoms of all that ails this economy and this country. A little common sense goes a long way. Sadly, the people who are in the position to fix much of what is wrong are completely void of it.

  3. jose garcia

    WOW…. the short memory syndrome is quite alive, the people who caused this catastrophe are already forgotten.