As Fed officials hinted at more stimulus measures for the ailing economy, research consultancy ""Capital Economics"":http://www.capitaleconomics.com/ released a note signaling that more trouble ahead for the housing sector could delay a recovery until 2014.[IMAGE]
Writing for the consultancy, senior U.S. economist ""Paul Dales"":http://www.capitaleconomics.com/staff/global-economics/paul-dales.html painted a grim portrait of the housing economy, explaining that less confidence among consumers and tight lending standards contribute to the view that ""structural constraints will prevent a decent housing recovery until 2014.""
Among other factors pushing back on a market rebound, Dales wrote, more Americans want to buy a home while few actually make the leap today.
He cited a late September ""Trulia"":http://www.trulia.com/ survey that found some 70 percent of Americans agreeing that homeownership remains a central tenet of the American Dream, a plunge downward from 77 percent last year.
""That's the equivalent of nearly 8 million households deciding that owning a home is not as appealing as it once was,"" Dales wrote.[COLUMN_BREAK]
He said the same figures showed that a ""third of renters who eventually want to buy were being prevented from doing so by problems qualifying for a mortgage and another third were being blocked because of a poor credit history.""
Commenting on the survey results, ""Jed Kolko"":http://www.truliablog.com/2011/09/20/trulia-chief-economist-jed-kolko/, chief economist with Trulia, said in a ""statement"":http://info.trulia.com/index.php?s=43&item=131 that ""today's aspiring homeowners face many financial obstacles,"" including higher down payment requirements and more intense mortgage qualifications.
""These obstacles keep some would-be homeowners from taking advantage of low mortgage rates; on the other hand, they prevent some people from buying homes they can't really afford,"" he added.
Dales went on to write that high credit scores, reportedly hitting 700 for conventional loans, according to data from ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/, mean that some 12 percent more households across the country no longer qualify for mortgages at current rates.
He said that the tighter lending standards has ""essentially locked out over [13 million] households from the mortgage market,"" adding that recently lowered conforming loan limits ""won't be a disaster"" but ""certainly won't help.""
Concluded Dales: ""The upshot is that even if the US [sic] economy were to strengthen suddenly, a long-lasting decline in the willingness of Americans to buy a home and a permanent deterioration in their ability to qualify for a mortgage will prevent a significant strengthening in housing demand.""
According to its Web site, Capital Economics is a macroeconomic research consultancy with more than 1,200 subscribers from institutions across the world.