Tough lending standards takes toll housing numbers across the country

As uncertain economic activity continued to hold builders back from constructing new homes, the number of housing units across the country remained relatively unchanged between 2010 and 2011.

As uncertain economic activity continued to hold builders back from constructing new homes, the number of housing units across the country remained relatively unchanged between 2010 and 2011.

Total nationwide homes edged .37 percent higher, according to a report from the Census Bureau. As a result, there were an estimated 132 million total units in the housing market, up from 131 million a year earlier. While this was only a marginal annual change, some states saw their numbers surge.

Real estate data indicates that Wyoming led the nation with a 1.11 percent increase of housing units. This brought the number of homes in the Cowboy State to an estimated 265,528 units. Meanwhile, Alaska, Utah and Montana also reported growth of more than 1 percent.       

However, not every state reported gains. Last year, West Virginia and Michigan had .02 percent and 0.12 percent fewer homes, respectively.

This lack of inventory could make it difficult for prospective homeowners to capitalize on affordable lending conditions this year.

The National Association of Realtors claimed at the beginning of 2012 that the relationship between property values, mortgage rates and median household incomes yielded the highest level of affordability ever seen. However, a recent report suggests that this could be nothing more than an illusion.

As a result of stricter lending standards, such as higher down payment requirements and despite low property values and mortgage rates, homes are just as affordable now as they were at the housing market's peak, according to a report from Andrew Davidson and Co. 

"Along with entering into a loan, borrowers need to come up with equity or "borrow" a down payment at a much higher rate," said report co-author Alexander Levin. "If we blend the loan rate (payable on debt) with the equity rates (applied to down payment), we may have a better gauge of what the loan really costs."

Five years ago, the average down payment for borrowers dropped to roughly 15 percent to offset mortgage rates hovering close to 6 percent. But with average mortgage rates currently less 4 percent and firm down payment requirements near 20 percent, monthly payments end up nearly equal, the report said.



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