National Association of Realtors

NAR: Tighter Lending Standards Good for Housing, But Will Dampen Sales 

Tighter lending criteria and fallout from the subprime loan debacle will lead to a healthier housing market with greater assurance that owners can handle mortgage adjustments, but higher loan standards will slow the housing recovery, according to the latest forecast by the National Association of Realtors. David Lereah, NAR’s chief economist, said the changes are necessary for the long-term health of the housing market. “We want to people to be able to stay in their homes with mortgage terms they understand and can handle,” he said. “Simply stated, a loan with the lowest monthly payment probably isn’t in your best interests — borrowers need to understand worst-case scenarios. If you’re in a mortgage you aren’t comfortable with, now is an excellent time to refinance, if you can, with historically low rates on safer conventional loans.”