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The MReport Webcast: Wednesday 12/17/2014

A new measure of mortgage application denials suggests getting a loan might be even tougher for lower-credit borrowers than previously thought. In a report released Tuesday, researchers at the Urban Institute say their own gauge shows mortgage denial rates last year were at high as 43 percent, more than triple the 14 percent estimate seen in traditional measures. The group’s calculations exclude applicants with near-perfect credit profiles, who are unlikely to be turned down for most products.

The study also suggests that the gap in denial rates between white and minority applicants has been exaggerated by inaccurate reporting. While the observed denial rates for black and Hispanic applicants over the last 16 years have been nearly double that of white applicants, that disparity is narrower when looking only at low-credit profile Americans: 45 percent for black applicants, 41 percent for Hispanics, and 34 percent for whites. Researchers at the institute say the adjusted numbers show racial gaps have relatively little to do with actual credit accessibility.                                                   

Production on new homes slowed in November, falling off from an upward revision to October groundbreakings. According to a report from the Commerce Department, homebuilders began construction on new houses in November at a seasonally adjusted annual rate of 1.03 million, down 1.6 percent month-over-month and 7 percent year-over-year. Despite the retreat in housing starts, there was at least one piece of good news in Tuesday’s report: November marked the third straight month in which starts came in at a rate above 1 million. According to the National Association of Home Builders (NAHB), the three-month moving averages for both total and single-family starts are now the strongest they've been since the Great Recession.

 

About Author: Jordan Funderburk

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