By Laurie Goodman, Jun Zhu and Taz George
Urban Institute
Credit availability for mortgage purchases has been very tight over the post-crisis period. In fact, over the past decade, the number of mortgages originated to purchase a home declined dramatically. In this commentary, we examine this decline and explain how limited access to credit has contributed to the drop. We estimate the number of “missing loans” that would have been made if credit availability were at normal levels—we find this number could be as high as 1.2 million units annually. We show that the trend of decreasing purchase originations is not uniform across race and ethnicity. Minority borrowers, especially African Americans and Hispanics, have been disproportionately shut out of the market. And the distribution is not equal across states, with Florida particularly impacted.
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