The housing market took a well-documented tumble during 2008 and 2009, and it has struggled with its comeback in some parts of the country. One of the reasons the market has struggled to come back has been the lack of availability of credit. Lenders were caught holding an empty bag during the financial crisis because they had given loans to people who were not qualified. This caused some overcompensation on the part of lenders. They became tight-fisted with money when they might have otherwise been willing to lend. For years, this caused a slow recovery of the markets in some places. Things seem to be changing through. Loans are firing back up and the housing market is a hot thing to follow again.
The new availability in funding comes as a surprise to some, but not those who have been monitoring the behavior of lenders. Enough time has passed now that lenders feel they are in a better position to lend out money again. Gone is some of the scrutiny that came over them during the crisis. While lenders are not being foolish and irresponsible, they have begun to take more risks, allowing regular people with decent credit the opportunity to borrow again.
This borrowing has not just been limited to first-time mortgages. Lines of credit taken out on the home have also become more popular. When it comes to equity loans California is arguably the most important place around. People today are financing many different things by taking out these new loans. They have confidence in the loans in part because of their confidence in rising home prices. When those prices rise, people do not have to worry about being underwater on their loans. It’s a concern that’s gone, leaving people to enjoy the spoils of their good credit and good fortune.
What this means for the future is anyone’s guess. The housing market remains volatile because the country’s economic recovery is also volatile and uncertain. With that being said, the new availability of credit is a good sign for those who want the market to get hot again. When people can get their hands on money, they are able to invest or buy that new home. It is a good sign for all people who depend on a healthy market in order to make their living.…