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The market may have reached the bottom


The financial industry and housing market have been searching for a bottom

The market was filled with speculation that they have finally reached the bottom and the only direction left to move would be upward after news that J.P. Morgan would be restructuring their buyout offer for Bear Stearns. This news, combined with news that existing home sales had finally beat economists expectations have provided some hope for the markets that the bottom has finally been tested. Moving forward, for this hypothesis to hold merit the stock market must stay in the 12,000 range and real estate must continue to show signs of improvement. The real estate market will face the tougher of the two tests. Consumer confidence remains low and the lack of job growth will be a large factor that plays into the rebound. The largest factor that may aid an improvement to the housing industry will be lenders easing on their underwriting guidelines and helping borrowers access more creative lending alternatives. The market for first time home buyers has been greatly restricted with fall out from the credit markets. Most new home owners now are required to put down between five and ten percent, significantly higher than twelve months ago. The role of the FHA loan is expected to grow as home buyers look to alternative methods to purchase homes.

3-24-2008 ? LoanNetwork.com





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