Monday, August 8, 2011
According to the LA Times, an unusually large number of home purchase contracts are falling through. Lawrence Yun, chief economist of the National Association of Realtors, thinks that low-ball appraisals and tough mortgage underwriting are the main culprits. Interviews with realtors, however, suggest another cause:
Buyer confidence about the direction of the national economy has been badly rattled in the last six to eight weeks by the gridlock in Congress over raising the national debt ceiling and cutting the deficit. That is making buyers less willing to take a risk on a major purchase, brokers say. It's also making them pickier and more demanding when defects are found in home inspections and frequently is leading to contract cancellations for relatively minor reasons.