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The rate of homeownership for families under age 35 is near a postwar low, just 35 percent.
Thanks to the coronavirus and the Fed’s rate cuts, the interest on 30-year mortgages is at record lows. You can get a fixed-rate mortgage at 3.25 percent, or even less at some banks.
That is, if you can get one at all.
If you are not a current homeowner, it’s harder to get a mortgage than ever. Why, because the industry, traumatized by its own excesses in the subprime scam, has made it far more difficult to qualify. They want high credit scores and blemish-free histories.
And the scoundrels who run (unregulated) private credit-scoring companies, like FICO, have imposed idiotic standards that make it even harder. For instance, if you apply for credit for perfectly defensible reasons like lowering your credit card interest rate, the very fact that you apply can lower your credit score. Presumably the algorithm thinks you are about to go more deeply into debt.
On top of that, young families encumbered by college debt have such large monthly repayments that many are automatically disqualified from getting mortgage credit from the get-go.
Before the subprime disaster and the ensuing general collapse, the rate of homeownership peaked at 69 percent, in 2004, with black rates at 50 percent. After the collapse, it dropped to 62.9 percent in 2016, and has only recently rebounded to 65.1 percent.
For African American homeowners, the prime targets of the subprime scam, two generations of wealth-building via homeownership were wiped out—to a 50-year low—with a gap of 30 points between black and white homeownership. And the rate of homeownership for families under age 35 is near a postwar low, just 35 percent.
For America’s have-nots, the low interest rates are a case of “Water, water everywhere, nor any drop to drink.” When we next get a progressive administration, an early order of business should be regulation of credit scoring and restitution for homeowners wiped out in the mortgage collapse, a goal that was included as part of the 2009 bank bailout, but never carried out.
