“If  mortgage rates weren’t enough,” began last week’s CNBC.com commentary, “it was even harder to qualify for a mortgage in July…” That dour introduction was followed by a series of Eeyore-worthy observations. Lest St. Cloud house hunters—many of whom will soon be among home loan seekers—take the discouraging news as catastrophic, it’s only fair to point out that the national outlets like CNBC are describing U.S. markets as a whole rather than St. Cloud itself. Still, the generalizations are such that many American markets do face strong fiscal headwinds.

Some of the noteworthy details:

·         The Mortgage Bankers Association gauged that in July, it was “harder…to qualify for a mortgage…than it has been in a decade.”

·         “Credit availability” (the measure of lending requirements) was the lowest in July than it has been since 2013.

·         A decline in the volume of “cash-out” refinancings was hurting lenders’ bottom lines—although nobody could doubt that the attraction of trading “a 3% rate for a 7% rate just to pull cash out of their home…” was responsible.      

·         The lower profitability that many U.S. lenders were experiencing is resulting in their need to reduce their operating costs by cutting back on the variety of loan offerings.

For St. Cloud home hunters who have ample cash (for instance, those who have sold their existing home after the rapid gains of recent years) there could be a nugget of good news—although CNBC didn’t mention it. If financing is hard to come by, the number of buyers who depend on it will surely tail off—leaving cash offers less competition.

Purchases and sales (or both) are indeed continuing locally—and it’s a market that rewards patience and skill. Call me to help bring both to the signing table! 

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