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According to recently released government data from the Home Mortgage Disclosure Act, credit continues to be overly stringent. Although buyers’ incomes have increased since 2004, the loan-to income ratio has declined. For example, the median income for a buyer using conventional financing rose from $79,000 in 2007 to $90,000 in 2011, while the national median household income stayed flat at $50,000 during the same period. The indication is that more loan applicants with higher incomes were applying and/or banks’ income standards became more stringent.

NAR’s 2012 Member Profile also revealed evidence of excessively tight credit conditions. Difficulty in obtaining mortgage financing was reported by 30 percent of all Realtors® as the most important factor limiting potential clients in completing a transaction.

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What’s The Impact? NAR research shows that a return to normal underwriting standards would result in an additional 10 to 15 percent increase in home sales. Read more about mortgage availability.