The current pandemic and banking crisis have caused a shift in the housing market, and this article explores the various aspects. It notes that the Federal Reserve has taken a hands-off approach and opted to let the natural forces of supply and demand take hold of the economy, causing worries and disruptions of traditional lending practices. These changes can create longer term economic impacts and affect the availability of credit and lending going forward.
The article suggests that lenders are adjusting their business models in response to the current environment, introducing alternative options to help facilitate credit access to potential buyers. Some are offering non-traditional options such as lease-to-own programs, hybrid rental/homeownership options, and increased borrowing limits. This can help close the gap between lenders and borrowers while easing the stress of uncertainty.
The article then takes a look at the potential effects that the banking crisis can have on the availability of credit. The concern is that credit could dry up, leading to fewer potential options for borrowers when looking for loans. It also examines how prices, interest rates, and prepayment fees may increase, thereby making it more difficult for borrowers to obtain credit.
Finally, the article concludes that lenders must adopt a more proactive approach to mitigate the economic fallout from the banking crisis. They should take steps to build more flexibility and provide more options to ensure that borrowers can access credit in the future. In the end, the article suggests that this crisis will redefine what a “normal” market looks like, and lenders need to adjust their strategies to provide stability for consumers.
You can read this full article at: https://www.housingwire.com/articles/housing-market-tracker-banking-crisis-is-a-new-variable/(subscription required)
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