Hang on to your seats folks, you might not qualify for a mortgage next year if your qualifying ratios are tight (money going out and money coming in).

Here is a recent article written by Richard Satran of US News that may may explain more of the details: Tighter Mortgage Rules

It was announced recently that the new lending guidelines put in place by the Dodd-Frank Act (which take effect January 1st 2014) will definitely affect your ability to purchase. As I sat there watching the commentator I found it hard to believe when she stated that 48% of Americans who were given a mortgage this year would not have qualified if these new rules were in place. This could have a staggering effect on real estate with home sales slowing down in 2014 as more and more inventory comes to the market. In May the Phoenix Metro area saw about 10,000 homes listed for sale and recently another 6,000 were added. This number is starting to rise and will likely continue upward.

I would strongly recommend to buyers and sellers that now should be the time to sell and to purchase because rising inventory can cause prices to flat line and lending guidelines changing for buyers who may not qualify this coming year. Sellers need to think about it like this: imagine 50% of the buyers market being taken away from you.  That is HUGE! Buyers think about it like this: the home you want might not be within your budget next year because you won’t qualify to purchase. That means settling for something priced less in order to purchase and own a home.

Having more people back to work isn’t the solution. Having the existing work force paid at a higher wage will be critical and I don’t see that happening. In fact, most workers are having to accept the pay reduction just to keep their current jobs.

I like to be optimistic, but 2014 looks like it might be a year in which real estate has a significant slow down across the US