Lending Practices Hurting Housing Recovery
New York, NY, Oct. 4, 2013 -- The housing recovery is being hurt because it’s too hard to get a mortgage today, the Wall Street Journal reported.
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Citing a paper written by Jim Parrott, a former housing advisor in the Obama administration who is now a senior fellow at the Urban Institute, and Mark Zandi, chief economist of Moody’s Analytics, the story suggests that lending standards have gone too far in the other direction in response to the housing collapse.
As evidence, the story cites average credit scores for mortgages, which in June were nearly 50 points above their pre-housing bubble levels.
Returning credit scores to pre-bubble levels would increase home sales by around 450,000 units and new single-family home construction by around 275,000 units, the story said, citing estimates from Zandi.