first tuesday insight
And speculators win it, by a mile! Even homebuyers brash enough to overbid are being elbowed out by speculators. The lure of the easy, low-contingency deal gives cash speculators a leg up with sellers.
A significant minority of buyers still struggle with credit and liquidity problems, barring them from borrowing. Some of these are those whose extend-and-pretend loan modifications finally failed.
And what about interest rates? While interest rates are low for buyers, they’re even lower for lenders. Lenders borrow at almost zero, and lend for nearly 4%. That doesn’t seem to be on buyers’ radars. And that’s awfully nice for lenders.