Many are also still finding it hard to acquire the necessary credit from tightfisted bankers who remain scarred from happened during the last housing bubble. While credit availability is rising, banks are sticking to a rigid set of rules for assessing credit scores and loan-to-value ratios for those with questionable borrowing histories. However, lending practices are loosening, with government lenders diminishing down payment requirements and private banks eying a profit motive to boost loans. Lawrence Yun, chief economist at the National Association of Realtors, argues that looser credit availability could help offset the negative impact of rising rates.
Lastly, wages remain a key impediment to growth in the housing market. Anika Khan, a Wells Fargo Securities economist, believes larger paychecks will be the key for stronger home sales, even if mortgage rates rise.
“What could move the needle is stronger wage growth — a lagging indicator,” Khan said in the article. “Let’s say it lags a year — then we could trickle into 2016 and actually see a little bit more activity happen.”
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