Housing: a daisy chain of delays

Sorting Out the New Housing Market

Excerpt:

A year ago, having a home that had appreciated in value meant that an owner could trade up to a more expensive home. Now it means that the homeowner cannot move until the old home is sold, and that is getting more difficult.

First, the seller has to find a buyer who can get a mortgage. Second, the price has to be high enough to pay off the old mortgage and leave enough cash for the down payment on a new home. Both were taken for granted a year ago. In many markets, neither is a sure thing now.

That has created a daisy chain of delays and cancellations that has frustrated builders, homeowners and real estate agents.

Selling one house depends on the buyer’s selling another house, and that deal in turn depends on yet another sale, and so on and so on.

A failure to get a mortgage approved at any stop along the way can halt the sales of an entire series of homes.

The loss of mobility stems from the fact that homeowners with houses worth less than they owe can find themselves unable to move to accept a job in a different city.

Comment: Not owning a home is actually a good position in some cases: allows greater mobility!