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Wednesday, May 11, 2011

Loans for upscale homes could see reduced government backing

Legislative changes are being considered that could reduce or eliminate government backing for home loans of greater than $750,000, according to a story in today’s New York Times (click to link).

Implications:  These changes would directly impact upscale consumers, but it would also affect consumers who simply live in more expensive areas.

If your company targets an upscale audience, you’re not likely to hear the topic of real estate drop from the daily discourse anytime soon.  If the changes are enacted and loans for expensive homes become much more costly or difficult to get, one might expect that chasm between upscale and lower/moderate homes to widen… as cash regains its position as king among luxury home buyers.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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