Analysis: In the U.S. housing market, recovery or Lost Decade? - Yahoo! News
And the answer is: Lost Decade. This is a detailed analysis of the situation. And here is one big factor: banks are preventing people from buying homes by the simple expedient of not making loans except to near-zero-risk borrowers, and the federal government is letting them run the show:
"In nearly every city, it now costs less to own than to rent.
But many would-be homeowners cannot buy. Lenders have virtually locked them out of the market by denying them mortgages, according to statistics from the Federal Housing Administration and a recent Morgan Stanley research report.
In May, consumers able to close on a mortgage had, on average, a near-perfect credit score. They could afford a 19 percent down payment on their new home. And they were still on track to spend no more 24 percent of their income on their new house, according to the Ellie Mae Origination Insight Report.
"Most of the population can't meet current mortgage underwriting standards," says trade publication Inside Mortgage Finance founder Guy Cecala. "They're getting eliminated before they even get to the door."
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Thanks to Fred Pilot for this thoroughly depressing link.
2 comments:
Well that's certainly a problem for owner-occupied housing (i.e., where the owners are natural persons as opposed to banks).
However, it would seem this is self-defeating for banks trying to unload foreclosed property. Are the banks really trying to make a run for all real estate in the country?
I don't think full recovery is yet ahead. I doubt it. Maybe this is just a way to calm local and large markets at all.
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