The hold-up centers on loan down payments

A recent Beverly Hills Times article points out that there have been few private mortgage-bond deals in recent years. The reason is the banks that sell mortgage-backed bonds are waiting for regulators to finish drawing up rules aimed at strengthening the market.

The hold-up centers on loan down payments. Private lenders want more leeway on down payments, so private bonds can be issued on mortgages with lower down payment requirements. Regulators have balked at the request in the past, but today it appears they are more willing to compromise.


You save taxes when you buy it. You save taxes while you own it. You save taxes when you sell it. "The mortgage interest deduction and the deduction for property taxes are, to most Americans, sacred. These deductions have been around since time immemorial and the purpose was to encourage home ownership," said Leonard W. Williams, a certified public accountant in Sunnyvale, CA.

Regulators are being pressured by lenders and consumer advocates. Both sides have cautioned against stringent down-payment requirements, arguing that restrictions would limit lending. The regulators are listening, and that’s good news, because if they listen and act on what they hear, we could see lending extended to potential borrowers who are champing at the bit to get in the market and buy a home.



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Supply is also tight in the new-home market

The silver lining in this frustrating sales cloud is that low supply coupled with rising demand equals rising prices. Year over year, the median price is up a very stout 11.8%, which is on par with the boom days of 2005. (So we shouldn’t expect the current price trend to hold indefinitely).

New-home sales also appear to be going nowhere fast. That said, they are at least lurching forward. New-home sales rose 1.5% to an annual rate of 417,000 units in March. Unfortunately, the increase was still 2,000 units short of what most economists had expected.

Supply is also tight in the new-home market. The number of new homes for sale rose by 3,000 units for March, but that wasn’t enough to materially increase inventory, which remains at a low 4.4-months supply at the going sales pace.

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