Unlike the last few months, there is no shortage of positive news for the housing market including near record-low mortgage rates, increasing housing prices, and rising new home sales.
With that being said, there are some statistics that could cause issues for the recovery of residential real estate. This trend, if continued, can cause the demand for housing to slow.
The mortgage industry is locking out a surprising number of potential buyers. Many of the mortgage loans underwritten in 2019 would be denied by at least one major lender today. Creditors have put more and more restrictions on who can get a loan, which is making it difficult for many looking to purchase.
“Mortgage standards haven’t yet recovered from the great recession,” Neal said. “So there are a number of borrowers… who were already locked out before we came into the pandemic. Now the pandemic hits and we see a new round of tightening.” Michael Neal, a senior research associate at the Urban Institute.