Dismal home sales figures to be released by Mexican research company Softec are sure to hit construction-loan securitizations, according a report by Moody’s Investors Service. The firm will project a 12% drop for 2010 in a report due to be released over the next few weeks.
Deals backed by construction bridge loans have borne the brunt of the housing downturn in Mexico, as developers have had a tough time paying back loans in an environment where demand for their product has dried up.
Moody’s expects the continued decline to beat down deals concentrated in the middle- and high-income sectors more than those in the lower-income sectors, as mortgage financing is more accessible for the latter group.
“Financing is less available for middle- and high-priced homes because lenders have pulled back in recent years,” Moody’s said.
The main culprit for the decline in sales is a lack of buyer confidence, which will not improve until employment prospects do. While the jobless rates is expected by Moody’s Economy.com total a fairly salutary 5.1% in 2010 — from 5.3% in 2009 — Mexicans are still wary of buying new homes.
