The Econo-Almanac has done a great job chronicaling a likely slide in SD housing values. One thing that has been overlooked is the impact of likely underwriting changes from housing lenders.
The current market is supported by extreme financial engineering. I don’t think that the lenders have any more arrows in their quiver. Still sales volume continues to drop.
We are already seeing lenders decrease their loan to value ratios on apartment loans. As soon as foreclosures go up on SFR loans lenders will tighten their underwriting and probably eliminate zero down financing.
When the lenders tighten up, it will destroy the foundation for this market. A large number of buyers will be eliminating just as inventories are starting to skyrocket.
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