This was the barrier to 900,000 mortgages

Since the recession, there have been significant barriers to homeownership for thousands of Americans and a new study explores five major issues.

The Rosen Consulting Group report estimates that if mortgage availability had been at a more normalized level in 2016, there would have been an additional 900,000 purchase mortgages written.

“Ten years after the Great Recession, major barriers remain for households trying to buy a home. Limited mortgage availability and excessive bank regulation restricts nearly a million households from purchasing homes each year,” said Ken Rosen, Chairman of Rosen Consulting Group and UC Berkeley’s Fisher Center for Real Estate & Urban Economics.

The report found that the market share of consumers with credit scores of 760 or more almost doubled to 58% in 2016 while the share of those with scores between 720 and 759 more than halved to 17%.

Another barrier to homeownership, the report says, is the concern that potential first-time buyers appear to have now, which have fundamentally changed since the Great Recession.

“Many households now suffer from post-foreclosure stress disorder, an altered perception of the financial risks associated with homeownership. Moving forward, addressing these challenges will be critical to helping millions of households attain the American Dream,” added Rosen.

The third barrier to homeownership is student debt which Rosen says have increased by 5 percentage points to a 10.6% share of household debt in 2016. In 2015, a typical student loan repayment of $300 per month was 20% of a typical mortgage payment on the median existing home price.

The fourth and fifth barriers relate to affordability and availability of single-family homes with mortgage availability and low inventory set to worsen in the coming years.

Rosen’s study forecasts that affordability across 75 major markets will fall by an average 9 percentage points between 2016 and 2019. That will mean around 5 million fewer households being able to afford the median existing home price by 2019.

Meanwhile, the availability of capital for homebuilders, the rising cost of construction, and the combined effect of local land-use and zoning regulations across the country are all constricting new single-family housing supply nationwide.