A Quick Look at the Hosing Sector

During your busy schedule, you may not have had the opportunity to keep up with everything that has occurred and that is forecasted in the housing and real estate industry. As a homeowner or potential homeowner, many of these events will affect you, be it through changes in the value of your home, or the availabilty of mortgages, or possibly your financial situation if you work in a housing industry-related field. The housing industry and its many related sub-sectors make up a huge portion of the national economy- banking, building, appliances, steel, office leasing, equipment leasing, equipment manufacturing, highway and road construction, local government, schools… the list is endless. All of these industries depend heavily on how many houses are built as well as how many houses are sold. Let’s start by looking at the mortgage industry since it has been making headlines lately.

Since late 2006 a total of 167 major U.S. lending institutions have closed their doors. These companies range from very large operations with 100+ offices across the U.S. employing over 7,500 people, all the way down to “mortgage divisions” of larger parent companies. The majority of the companies that have been forced out of the industry have been “non-conforming / sub-prime” lenders and “Alt-A” lenders. These are two classifications of lenders that basically offered mortgage products that fit consumers with either credit challenges or non-standard income or employment situations. When these companies closed their doors, the loan products that they offered disappeared as well. The types of mortgages available today are drastically different than just one short year ago. In upcoming posts we will look at some of the causes…

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