Affordability Soaring
A new report from Deutsche Bank notes that housing affordability is presently at an all-time high. DB's proclamation is based on figures compiled by the National Association of Realtors. Bank analysts note that the acceleration in affordability is "unprecedented" and it should help stabilize both housing starts and residential construction.
DB believes the chief reason why housing activity has stalled is lending standards. "This is the one area where senior loan officers are still tightening, unlike what they have done for consumer and commercial/industrial loans," the bank said. Its analysts believe when banks and lenders "become willing to make home loans, surging affordability should lift construction-perhaps by a significant amount." Rates are off their historic lows of the fall and early winter, but some lenders report that potential home buyers are becoming more active, believing that rates will continue to rise and want to lock-in now
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