Housing Crisis Forecasted to End 2012
On Tuesday, Capital Economics announced that they expect the housing crisis to end in 2012. What makes them feel so confident? Loosening credit by banks.
Currently, the average credit score for a new approved loan is 700, a figure that was much lower prior to the crisis, but has been the norm for the past year. However, banks are now lending 82% loan-to-value ratios, rather than the low 74% they were lending in 2010. This is one of the clearest signs that point to the stabilization of mortgage lending and the improvement of mortgage credit conditions.