Strengthening the financial system was believed to be a necessity - but for who?
The latest FICO data show that about a QUARTER of all American consumers are now removed from any possible eligibility to buy a home. The pundits who keep preaching that household formation is creating a backlog of homebuyers better check their facts.
Of course, Uncle Sam could start giving away homes instead of tax incentives!
The accompanying chart shows that a quarter of consumers — 43.4 million — now have a credit score below 600, marking them as poor risks for lenders. They can't get credit cards, auto loans or home mortgages under the lending rules banks use.
As consumers relied on debt to fuel their spending in recent years, their inability to access credit is one reason for the slowing economic recovery.
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Sixteen states and D.C. now have double digit unemployment rates. Arizona and New Jersey are close.
According to Jeffrey Otteau "Purchase contracts to buy a home in New Jersey declined for the 2nd consecutive month, compared to one year ago, providing a grim outlook for what's ahead in the housing market. In June, purchase contracts declined by 27% which followed a 23% decline in May for the worst performance of the past 6 years."
He was much more optimistic not too long ago!
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