dubbed the savior of the housing market by WSJ for offering some of the easiest lending terms available and credited by some housing experts for California’s stronger-than-expected annual price growth, is now starting to feel the pinch and tighten its belt. The FHA has seen its reserves fall sharply as many loans have defaulted at a rapid pace, and beginning in October the agency will raise the annual fees it charges to new borrowers.
Great Expectations Although today’s housing numbers should come as no surprise, the drop in home resales exceeds previous expectations. According to the WSJ:
Home resales dropped a record 27.2% to an annual rate of 3.83 million in July, the National Association of Realtors said Tuesday. Meanwhile, inventories rose to 12.5 months from 8.9 months in June, pressuring already depressed home prices. Inventories are at their highest level in more than a decade.
Image: via, notes-from-offcenter.com