Pin It

Tight Credit Woes 

As a result of the housing crisis, tighter credit standards have made it difficult for buyers with less than stellar credit to get a mortgage even though many, if not most renters are paying more than they would for a mortgage.

This increases the demand for rental housing which contributes to our skyrocketing rents. The Urban Institute recently studied and quantified how many mortgages there would have been if borrowers at all credit levels faced the same mortgage market in 2015 as that which existed in 2001.

The difference was calculated at 1,074,099 less mortgages in 2015. The report further cited that for the 6 year period of 2009 to 2014, 5.2 million mortgages were not made due to tighter underwriting standards. According to the report, home sales in 2015 were 4% lower than in 2001. The report also states that cash sales have increased due to the tight standards. Cash sales rose from 18% of all sales to 33% in 2015. Investors are typically cash buyers and this is also part of our housing inventories as their purchases are mostly rentals.

The fact that in 2015 about 1.1 million families were not able to purchase a home has further economic ramifications. Home ownership has long been a wealth building opportunity for families. Lower home sales and inventory mean fewer construction jobs and sales of construction related materials and consumer goods related to home purchases. This affects our local economy as well as the overall U.S. economy.
Pin It


Subscribe to this thread:

Add a comment

Newsletter Signup

Cascades Reader Logo Cascades Reader

Get your daily dose of news for Central Oregon and beyond, delivered to your inbox five days a week. Powered by the Source Weekly.

Latest in Take Me Home

More by Nick Nayne, Principal Broker

Readers also liked…

© 2019 LAY IT OUT INC | 704 NW GEORGIA AVE, BEND, OREGON 97703  |   Privacy Policy

Website powered by Foundation