According to the analytics firm, Capital Management, the housing crisis will actually end this year, thanks to looser credit standards and availability for borrowers. Borrowers are required to have a credit score of 700 or higher to obtain a mortgage loan. This is consistent with numbers from a year ago. In addition, banks are “lending amounts up to 3.5 times borrower’s earnings,” up from a low of 3.2. Capital Economics also points to the loan-to-value rations that are looser, 82% vs. 74% in mid-2010. This is their “clearest sign yet of an improvement in mortgage credit conditions.” Despite the improvement, approximately 8% of applicants fail to qualify for a mortgage loan. Capital Economics warns that these signs are not enough to generate notable house price gains.
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