FINANCIAL STRESS AND SUSTAINABLE HOMEOWNER
Financial stress is a necessary condition for unsustainable homeownership. First-time homebuyers are likely to experience financial stress due to factors such as a decline in credit scores, debt-to-income ratio (DTI), and types of debt [1][2][3]. A decline of 60 points or more in the credit scores of first-time homeowners is used as a proxy for financial stress. The most important predictor of future financial stress is the DTI at the time a home loan is originated [1][2]. Financial education and counseling could be targeted at borrowers who are more likely to experience financial stress [1][2]. Homeownership is sustainable when a household has the financial capacity to continue owning its home over time [2][3].
References:
[1] The Drivers of Financial Stress and Sustainable …
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