No money for New Construction
Not only are Real Estate Agents, Lenders and borrowers being affected by this economic housing downfall, builders of new homes are also in great danger. With the current downfall of the lending market, it has been close to impossible for home builders to get funding for new construction projects. A lot of the new construction that is being built, is also being stopped right in the middle because lenders can no longer afford to continue to get funding for the projects, especially with the $8000.00 tax credit in the picture, more lenders are putting the builders on the back burner until something is finalized with the tax credit. Builders with excellent credit and previous good standing with the lender, are even finding it difficult to obtain a loan. Builders who are able to obtain a loan, are finding that there are too many restrictions being placed on it and thinking that its not even worth it.
A lot of builders have stated that when trying to get a new loan for new development, they have been turned away by lenders because they are not granting any new loans at the moment, they have said this happens very frequently in the recent months. Also, the lenders have no extra money to lend with the current amount of loans that are going into default. Most of these builders are stopping or waiting to start any projects, until the lending market has money to lend.
Builders have felt very in the dark on this subject. The have said that they are being given the run around as to why they cannot get a loan. It has been blamed by lender, on the Feds. The Feds continue to say they are not putting any regulation on the money that is being distributed, that is all based on the lenders doing.
This is definitely not fair for the builders, they are stuck with the loss of money for parts and labor on the new project, and left with an unfinished home, and no way to make back what they lost. Because really, you cant sell and unfinished house, doesn’t sound to appealing to most home buyers. The lenders do not realize that not funding these loans will in turn hurt the market even more. Having unfinished projects, can in turn affect the current housing market conditions, leaving less new homes for consumers and first time home buyers to consider purchasing, in turn leaving the market at its current stand still.
Housing is a very important part of keeping our economy a float, and unless we have a steady flow of homes on the market, like that of new construction, and people getting loans to purchase those homes, we will never see the light at the end of the tunnel. It is understood that there is a huge inventory of homes out there today, but eventually the homes will be sold, and we will need something else for our buyers to purchase. Eventually the market and economy will be on track, but only if the industry professionals, as well as the feds work together to make the right financial decisions for the housing market.