While U.S. housing officials discuss ways to give more Americans access to mortgage loans — including the hotly debated topic of loosening lending standards — little consensus exists over how these efforts might affect home sales.
According to one estimate, yearly home sales in the U.S. could rise by double-digit percentages if mortgage lending standards reverted to what’s termed normal — that is, what they looked like in the early 2000s, before the housing bubble and subsequent bust led to a squeeze on the number of people who could qualify for home loans.
That kind of sales boost would be welcome news to builders such as D.R. Horton (NYSE:DHI) and Lennar (NYSE:LEN) that target first-time buyers for a good chunk of their business, as these buyers tend to be held back the most by stringent credit standards.
Others say efforts to relax lending standards — moves supported by Federal Housing Finance Agency (FHFA) director Mel Watt, among others — won’t have much impact because many of the borrowers being targeted already have a…
via Would Looser Lending Standards Boost Home Sales? LEN DHI PHM RYL – Investors.com.
