The MBA expects purchase originations to climb to $585 billion in 2013, up from an estimated $503 billion in 2012. That's the good news.

The bad news is that there should be even more purchase originations. Housing and Urban Development Department data show that 10% to 20% of qualified borrowers are not getting approved for loans. We believe that figure under reports the problem.

So why are too few qualified borrowers getting their loan? The answer centers on regulation and private participation.

As for regulation, it's simply too heavy handed, which discourages risk taking by lenders. We find a comment by new MBA Chairperson Debra Still revealing. She says, “Clearly, we are still in the penalty phase of the housing crisis,” meaning that lenders are still paying for past digressions. That's hurting many of today's qualified borrowers.

We also find it interesting that the government-sponsored agencies –Fannie Mae, Freddie Mac, Ginnie Mae – want more private capital in the housing finance system. We couldn't agree more, because more capital sources and more participants create a more diverse and accommodating lending environment.

Unfortunately, overly strict regulation and artificially low interest rates are keeping private capital on the sidelines. Private capital requires more lending freedom and a higher rate of return on investment than public capital.

Fortunately, stronger economic growth, which we expect in 2013, should loosen the shackles. Both lenders and regulators become less risk averse when economic growth is rising. Rising growth also brings rising interest rates, and that's not bad. Higher rates will attract more private capital.

In short, we expect to see a more robust lending environment next year, which should also be a higher lending-rate environment. And that's a good thing.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at