The Disappearing American Mortgage

"Data from the Mortgage Bankers Association show that Americans are applying for fewer mortgages than they have at any point in the past quarter century, including during the worst of the Great Recession, when the jobless rate was more than twice as high. Since the end of 1999, 96 of the 100 lowest readings of the MBA's weekly index of new mortgage-loan applications have occurred in the past three years."

"High prices and high interest costs are holding working-class households out of the market, and wealthy individuals are making up a larger share of transactions. Young people are facing a future as perpetual renters. With less time to accrue home equity, many will end up poorer in retirement than their parents were."

"Mortgage lenders increased the amount of credit extended to wealthy households and reduced the amount of credit extended to middle-income households. Banks focused more on providing suites of services to the well off, such as home loans, credit cards, and brokerage accounts, and less on making bread-and-butter loans to working families."

American mortgage applications have fallen to their lowest levels in 25 years, even lower than during the Great Recession, fundamentally disrupting homeownership as a wealth-building tool. High mortgage rates above 6 percent and elevated home prices exclude working-class households from the market, while wealthy individuals increasingly dominate transactions. Young people face a future as perpetual renters with reduced home equity accumulation, potentially leaving them poorer in retirement than their parents. Post-Great Recession regulations like Dodd-Frank tightened lending standards, causing banks to redirect credit toward wealthy households and away from middle-income families. Simultaneously, home builders reduced construction, further constraining housing supply and affordability.

Read at The Atlantic