Third Of Americans Can't Get Mortgages As Interest Rates Hit Record Lows: Zillow

Even as a glut of unsold inventory keeps the housing market from recovering, nearly a third of Americans can't qualify for home mortgages, according to new data from online real estate search company Zillow.

Would-be homeowners with credit scores below 620 points were largely unable to take out 30-year mortgages in the first half of September, even if they offered down payments as high as 25 percent, Zillow found after analyzing more than 25,000 loan quotes and purchase requests on its website. A full 29.3 percent of Americans have a credit score that low, Zillow says, citing data from myFICO.

Mortgage interest rates, meanwhile, are at a low not seen in at least 40 years. According to data compiled by the St. Louis Fed, the average interest rate on a 30-year mortgage was 4.37 percent as of September 16. The St. Louis Fed has data going back to 1971 and, in that period, before 2009, the interest rate never dipped below 5 percent.

These days, according to Zillow, the lowest interest rate is 4.3 percent, available only to those with a credit score above 720 points -- about 47 percent of Americans. The higher rates, ranging from 4.44 to 4.9 percent, are available to about 23.8 percent of Americans. The remaining 29.3 percent of the population can't get loans at all.

A variety of factors, including a high volume of foreclosures and weak demand, have depressed the housing market to such an extent that some experts say it won't rebound for three years.

But lenders are understandably cautious. While easily accessible mortgages might contribute to a housing recovery, lenders are still shell-shocked from the aftermath of the housing bubble. Banks have been writing off debt in record numbers -- the charge-off rate this year has been higher than any year since at least 1988, according to data from the Saint Louis Fed.

Comments

[nogornc]

01:51 PM on 10/22/2010

Why is there little to no credit card fraud in Europe? Because the government and consumers demand it. It's a scam of epic proportions. Pay cash, use private investors, stay away from the banks!

[wtf-please]

12:32 PM on 10/09/2010

Yes I want to buy in a manipulated asset class and commit long term.. yes that makes sense to me... I hope I can sign on for a "SAFE" 30 year term.. I dont care if the economy keeps having cycles of crashes based on manipulation, excess of risk to bet, and greed. Sounds like a sound plan

[wtf-please]

12:29 PM on 10/09/2010

Can americans sue to have their fico scores reinstated or do the banks get to keep referring to them as an excuse for the cost of borrowing to be more.. let me guess

After all the 3 credit ratings best customer is the banks.. lol

[Taninthesummer]

10:04 PM on 10/07/2010

President Obama,

You MUST NOT abandon the American middle class! This is your moment to raise your reasoned, yet passionate voice, in our favor. Please, do not allow the banks to take control of this situation. They are not worthy. We are.

[Yellowbird]

06:31 PM on 10/03/2010

Well, DUH.... WHEN WILL SELLERS UNDERSTAND?

YOU HAVE TO LOWER THE PRICES.

[Deucejack]

09:36 PM on 10/01/2010

They can get a mortgage if they choose a house they can afford.

[JackBPravda]

02:49 PM on 10/01/2010

I can hear these duplicitous bastards, grinning all the while, straight-faced: 'Hey, blame Congress, we used to want ALL of you..................for real [muttering: so long as we could shift your risk, back to you! (guffawing)]; if only you, average slob, were big, too, you know, as in 'no fail'.

[rory talbot]

05:42 PM on 09/30/2010

I have a 739 credit score, 35% equity in my home, but was turned down for a mortgage refi because I'm self-employed. My requested loan is about one and a half times my yearly salary. I tried 16 different lenders. Don't tell me banks are lending because it just ain't true.

[Deucejack]

09:38 PM on 10/01/2010

Huh. I just refied with 20% equity and my loan was for quadruple what my yearly salary is. I think you are LYING, or fudging some facts to try and fit in here.

[dukeitout]

12:48 AM on 09/30/2010

Aren't we saying that people who probably can't make the payments will not be granted loans? Good. That was part of the problem in the first place. Go rent a place aspiring home owners. I wish I had rented. I'm under water now in my little abode and I can't even swim. Wanna buy a house? No offer will be ignored.

[Deucejack]

09:39 PM on 10/01/2010

Of course it's good. But here in LA LA LAND, people thing that home ownership is a right just like abortion on demand and welfare.

[brookmo]

09:45 PM on 09/29/2010

LOL! Can't get s loan! CAN"T GET A JOB AND IF YOU HAVE ONE WILL YOU KEEP IT! Please, people need jobs. Without one credit rating goes down the tubes. Then when you finally find something, the pay is so low that you can't even rent (if you want to eat that is). GIVE ME A BREAK!

[Non Believer]

06:30 AM on 09/29/2010

The first problem is that everyone agrees that living in a state of cradle to grave indebtedness is a natural condition for humans to be born and live under. So if you're arguing about the rules of this game, you are already lost. Second, people believe that they are home OWNERS when they have a MORTGAGE or business OWNERS when they are in HOCK beyond their means to the finance companies. You are not a home OWNER or business OWNER until you have title to the property, which means you have no debt. You are an indentured servant to a bank. Today we move about but the debt follows us and we no longer know the owner of our indebtedness because it has been repackaged and sold to who knows who, but we are NOT FREE until the debts are paid and few will be able to accomplish this in their lifetime. Your credit score is like worrying about who is the MASTERS favorite. It only gets you more credit not more freedom. The wealthy no longer feel any obligation to better their fellow man because they no longer have allegiance to a set of ideals, philosophies or country. They only care about their own bottom line, where ever that comes from. Don't look to governments, their indebted too, The Nation States have no clothes. No one is responsible, no is held accountable and no one will be blamed. Welcome to THE STUPID AGES.

[CulpeperMin]

01:17 AM on 09/29/2010

Thumbing through the posts on this thread it seems that while many have correctly identified malfeasance on the part of banks, mortgage originators and speculators, most refuse to acknowledge the root cause.

Government through statute, the tax code and ultimately subsidies provides powerful incentives that alters behavior such that many who have no business or real desire end up taking on a mortgage under the guise of "home ownership". Government distorts the marketplace through its interventions, resulting in malinvestment and unintended consequences and yet as is nearly always the case, is able to obfuscate to the point where the symptoms are tagged as the root cause, the solution of course, more government intervention.

Home "ownership" is not a right.

Housing is simply far too expensive as a result of subsidy and rather than withdrawing subsidies and allowing housing prices to fall (which of course benefits those who behaved prudently in the midst of a bubble and not coincidentally those who are currently unable to afford a home without unsustainable subsidy), government predictably continues to pile on the road to ruin.

The State as always is the root cause and yet most refuse to see through the ruse and look past the symptoms.

[pattiepcomedy]

10:23 PM on 09/28/2010

There is a God.

[Berkley Capital]

04:30 PM on 09/28/2010

About 47% of Americans have a credit score above 720 points? Even during the best of times that's how many people had good credit. Having a great score has not always been easy to attain.

[wdw505]

11:24 PM on 09/28/2010

sounds about right

[johnnymainstreet]

04:15 PM on 09/28/2010

I really can't believe the number of posts that state " this problem (financial crisis) was caused by "people who bought more house then they could afford". Just goes to show how most people just want to scratch the surface of a problem and have their minds made up on who to blame. I'm not defending anyone who got into that situation. buying more than they could afford or lived beyond their means. But, that isn't what caused the financial meltdown of the entire economic system. The cause of the financial meltdown was that Wall Street encouraged lenders to give mortgages to anyone because they need mortgages to roll into securities (which were nothing more than junk bonds) they knew they were junk, Goldman Sachs even bet against those same bonds (they were selling) after they had them rated as Tripe A. Wall Street Investment banks then went out and had those worthless junk bonds "insured": (read AIG) and when the whole thing collapsed the insurance companies had to pay them off. When AIG couldn't pay, the tax payers were stuck. And now, many of the posters here believe that it all the fault of "people buying more home than the could afford". The financial industry and our government just love for you to place the blame on your fellow citizens. It takes the heat off of them. Total amount of sub prime mortgages that were issued was 300 billion, about 50% defaulted. Wall Street fraud turned it into TRILLIONS

[TequilaMockingbird]

05:47 PM on 09/28/2010

Fanned and Faved johnnymain

[halfpricefaustian]

05:47 PM on 09/28/2010

And people like Greenspan, Geithner and Summers still think that the financial industry is best qualified to regulate the financial industry. They _can_, indeed, take care of themselves, but that is not the same.