In a recent speech, Federal Reserve Board Vice Chair Janet Yellen said there are several signs of recovery in the housing market, including drops in first-time delinquencies and near historic lows in both interest rates and home prices. These positive signs for the future come despite about 4.5 percent of mortgages in the U.S. being in foreclosure, with another 3.5 percent experiencing more than three missed payments. In all, about 2.5 million foreclosures are expected to take place this year, about the same number observed in 2010.
Yellen also noted that housing is drawing close to its most affordable level in the last 22 years. However, one factor that may be preventing a swifter recovery from the housing downturn is that many financial institutions have tightened their lending standards, effectively preventing many borrowers who may want to obtain a new mortgage from doing so while affordability is high.
Many borrowers may have experienced trouble paying down their home loans in the last few years due to lost income as a result of unemployment and other financial hardships.
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