"It was so hard to get a mortgage in 2015 that lenders failed to make about 1.1 million mortgages that they would have made if reasonable lending standards had been in place. From 2009 to 2014, lenders failed to make about 5.2 million mortgages thanks to overly tight credit. In total, lenders would have issued 6.3 million additional mortgages between 2009 and 2015 if lending standards had been more reasonable."
"Our Housing Credit Availability Index (HCAI)* measures the probability that mortgage borrowers will become delinquent on that mortgage for 90 or more days, which we refer to as the default risk. This measure indicates that the probability of default rose from 12 percent in 2001 to a peak of 16.5 percent at the end of 2005/beginning of 2006, before declining to the current level of 5 percent. Stated differently, lenders are currently taking less than half the credit risk they were taking in 2001, a period of reasonable credit standards."
"...fewer households will become homeowners at exactly the point in the economic cycle when it is most advantageous to do so... [They] will continue to miss this wealth-building opportunity. The median family wealth for homeowners is $195,400, with their home the most valuable asset for most; the median family wealth for renters is $5,400... Fewer potential homebuyers means the housing market will continue to recover more slowly. At the same time, fewer buyers create a strain on other benefits to the economy which homebuying brings such as spending on home goods and an increase in construction jobs."
"First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there's less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit."
"Even though the value of the average home in the U.S. increased by about $13,500 over the last year, thanks to declining interest rates it actually costs almost exactly the same in principal and interest each month to purchase as it did this time last year. Even taking into account the fact that affordability can vary - sometimes significantly - across the country based upon the different rates of home price appreciation we're seeing, that's a pretty incredible balancing act between interest rates and home prices at the national level... Right now, it takes 20 percent of the median monthly income to cover monthly payments on the median-priced home, which is well below historical norms." However, the report warns that affordability will be dramatically impacted by an increase in mortgage rates. "A half-point increase in interest rates would be equivalent to a $17,000 jump in the average home price, and bring that ratio to 21.5 percent. This increase is still below historical norms, but puts more pressure on homebuyers."
"The one major predicament in the housing market is without a doubt the painfully low levels of housing inventory in much of the country. It's leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices."
"Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand."
"There's hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals -- primarily consistent job gains and affordable mortgage rates -- are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate."
"I do think that there's a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores."
"Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy."