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The credit standards to get a mortgage are still fairly tight, and with people clustering in urban areas where rates of appreciation are making it difficult for the common person to afford a mortgage, I think this is a sad development for the American dream.
In part, it's the Law of Supply & Demand, which doesn't give a damn about dreams of any kind.
It's also in part the government's fault. Government policies artificially over-inflate the value of housing.
Eliminate Freddie Mac and limit Fannie Mae to mortgages for 1st time buyers under the median income for their State, and bar refinancing, 2nd/3rd Mortgages and HELOCs so long as the tax-payer is on the hook for the mortgage.
Home owners and banks should bear the cost of mortgage insurance, not tax-payers.
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Originally Posted by rruff
In addition, until the mid 1970s, income rose faster than inflation by an average of 2%/yr for the prior 150 years.
You might want to look at the rates of Monetary Inflation and Demand-pull Inflation at the end of the 1st Great Depression of the 19th Century, and during and after the Civil War, just to mention a few times.
I won't even get into regional/State issues and problems, including regional/State recessions and regional/State Monetary Inflation.
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Originally Posted by rruff
I'm not saying that the cost of housing isn't constrained, but it certainly isn't constrained by the inflation rate. It can sustainably rise much faster than that.
That's because your government causes Interest Inflation. Remove government from the equation and housing prices drop to real market levels.
How tight are standards really? It's not terribly difficult to get qualified for a mortgage
My husband and I both have credit scores over 800. QUALIFYING wasn't a problem at all.
When we bought a house right before the crash, we had what we considered the usual amount of paperwork. Closing was fairly simple. This was when our credit scores were about 750 each and we made less money.
We bought another house last year, and the difference in the amount of paperwork was striking. My gosh, I felt like I was a private investigator on my own self by the time it was all said and done. Much more to sign at closing too.
And in a few months, a new set of regs is about to hit that will complicate closings even more.
I'm not saying the regs are a bad thing or that we didn't need better controls in place. I'm just saying that from a home buyer's perspective, the paperwork ordeal is much more daunting than it was 6 years ago.
My husband and I both have credit scores over 800. QUALIFYING wasn't a problem at all.
When we bought a house right before the crash, we had what we considered the usual amount of paperwork. Closing was fairly simple. This was when our credit scores were about 750 each and we made less money.
We bought another house last year, and the difference in the amount of paperwork was striking. My gosh, I felt like I was a private investigator on my own self by the time it was all said and done. Much more to sign at closing too.
And in a few months, a new set of regs is about to hit that will complicate closings even more.
I'm not saying the regs are a bad thing or that we didn't need better controls in place. I'm just saying that from a home buyer's perspective, the paperwork ordeal is much more daunting than it was 6 years ago.
The OP was talking about tight credit standards, the credit standards are not overly difficult. I just closed on a new house and while they do ask for a lot of docs it's simply not difficult and closing took 30 minutes
That may be in the short-term, but like stretching an elastic band, it is creating pressure in the opposite direction that will have to be relieved at some point. Rents and the potential sales price of a rental property are connected in every market by a complex but rather unforgiving local calculus. These are not at all separate and distinct markets.
In many cases they end up targeting different market segments altogether.
Portfolios generating income aren't and never really were viewed in the same light as earned income
neither is the amount of the assets. i could pay for that co-op many times over but thems the rules they go by .
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we had what we considered the usual amount of paperwork. Closing was fairly simple. This was when our credit scores were about 750 each and we made less money.
