The newspaper cites increasing mortgage rates, very tight lending guidelines and an overhaul of government regulation as main reasons why homebuying could decrease even more in the coming year.
"From a credit standpoint, I tend to think we're toward the bottom of that cycle," Bob Walters, chief economist for Quicken Loans, told the Tribune. He added he doesn't believe the market will get better in 2011.
According to the paper, if Congress redefines what constitutes a "qualified residential mortgage" in the spring, which is expected, it could become even more difficult for potential homebuyers to secure financing.
The National Inflation Association predicts that, by buying mortgage-backed securities, the Federal Reserve will be moving down the value of the U.S. dollar in 2011. This will potentially allow Americans to pay back mortgages more easily with depreciated U.S. dollars.
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