Why Banks Aren’t Lending To Homebuyers

“Despite the confluence of promising signs,” write Peter Eavis and Jessica Silver-Greenberg today, “little in the vast system that provides Americans with mortgages has returned to normal since the 2008 financial crisis, leaving a large swath of people virtually shut out of the market.”

This is absolutely true, and it’s a significant problem. To get a feel for just how sluggish the mortgage market is, my favorite chart comes from the Mortgage Bankers Association. Every month, the MBA releases its Mortgage Credit Availability Index, which makes it easy to concentrate on minuscule differences: in December, for instance, the index rose to 100.9, from 110.2 in November. But in order to see the big picture you need to zoom out and look at what credit availability was like before the financial crisis. And if you do that, the chart looks something likethis:

More