Harvard study reveals lender roadblock to recovery

While the housing market continues to post recent gains, one thing still remains in its way to a full recovery: Lenders’ unwillingness to issue more loans, suggests a new study by the Harvard Joint Center for Housing Studies.

“Think about how careful people are moving back into the market when prices have fallen this much,” Eric Belsky, the managing director of the Harvard Joint Center for Housing Studies, told National Public Radio recently. “You know, the opportunity to potentially buy at or near the bottom of a cycle is great. And I think people are beginning to appreciate that.”

But some homebuyers find they can’t qualify for a loan. Many lenders are requiring higher credit scores than what was needed to qualify for a loan just a few years ago. Some banks are also requiring potential borrowers to come with larger down payments. That’s left some homebuyers on the sidelines, unable to qualify for credit to purchase a home.

“Experts generally agree that this is an overreaction to the downturn seen in the last few years,” Credit.com wrote in commenting on the Harvard study.