The following is an excerpt from a white paper published by ATTOM Data Solutions. The full 12-page white paper with exclusive data and charts from ATTOM, along with more insights from thought leaders in predictive analytics, is available for free download here.

The mortgage meltdown is widely identified with subprime lending so why should the return of such loans be welcomed?

“Riskier U.S. mortgages are creeping back into the bond market again,” reported Bloomberg in May. “The loans in question are nowhere near the toxic mortgages that brought down the financial system last decade. But they’re being made to people with lower credit scores and with more debt relative to their income.”

Average wage earners purchasing a home at the U.S. median sales price of $245,000 in Q2 2018 would need to spend 31.2 percent of their gross income on the monthly house payment for that home — assuming 3 percent down and including mortgage, property taxes, and insurance, according to the ATTOM Data Solutions Q2 2018 U.S. Home Affordability Report.

That 31.2 percent of average wages needed to purchase a median-priced home in the second quarter of 2018 is the highest in nearly 10 years. Back in 2008 the share of income needed to buy was 34.3 percent.

What was previously known as subprime is now increasingly branded as nonprime to differentiate it from past loan offerings. Read more