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Home Publications Blogs Beat the Press A Shortage of Rental Housing?

A Shortage of Rental Housing?

Friday, 27 August 2010 21:59

That's what NYT columnist Joe Nocera is apparently worried about. That doesn't quite fit the data. The Census Department data show that rental vacancy rates are at record highs.

The article also claims that many otherwise creditworthy borrowers are unable to get mortgages. This is inconsistent with the Mortgage Bankers Association data on mortgage applications. This series shows applications going through the floor since the end of the first-time buyers tax credit in May. (That is why people who follow the housing market were not surprised by the plunge in sales reported for July.)

If creditworthy borrowers were finding it difficult to get mortgages then it would be expected that the number of applications would be rising sharply relative to the number of sales, since many buyers would have to make multiple applications to get a mortgage and some would make several applications and still not get a mortgage.

Comments (5)Add Comment
Managing Director
written by Joe Firestone, August 27, 2010 10:40
Where does the Times find its columnists, the local bar?
Thanks Dean
written by JM, August 28, 2010 11:33
The mystification of the US housing market continues unabated. Thanks Dean, for being a beacon of clarity on this issue.
written by PeonInChief, August 28, 2010 11:41
In some communities cash investors who buy foreclosed properties to flip or rent are the only people in the market.
Don't Agree
written by leo, August 28, 2010 2:05
I know someone who just applied for a mortgage at three different banks and was turned down.

"The expected that the number of applications would be rising sharply relative to the number of sales".

Well, if it's relative, the number of applications could be constant and the number of sales going through the floor.

Good Indicator?
written by James, August 30, 2010 1:30
Not sure the number of applications is good barometer that credit was difficult to get. These days as in the past, applying for credit shows up on your credit report and some lenders frown on that so applicants are judicious applying for credits.

Now, if one lender shot down, then they might go to next one but the new lender will see the previous lender ran inquiry and say "Hmmmm...and tend to be biase too."

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.