(Photo by Joe Raedle/Getty Images)
Joe Raedle (Photo by Joe Raedle/Getty Images)

This week's news that new homes sales fell 6.1% in February from a year earlier and that existing home sales fell 7.1% from the previous month has Fortune's Chris Matthews thinking that the housing crisis still exists. It has just changed shape.

The main problem, Matthews theorizes, is supply.

There are profits to be made from building relatively affordable homes, but America’s home builders aren’t constructing them. This suggests there’s a serious supply problem in the American housing market. For years, home builders have complained that the cost of building homes is prohibitive due to a lack of labor and land.

But demand issues haven't been solved either, particularly because of the difficulty potential borrowers encounter as they try to get a mortage, according to Laurie Goodman, director of the Housing Finance Policy Center.

"... the lowest 10th of borrowers typically had a FICO score of around 600 before the housing bubble, but the same cohort needs a score of 668 today. “The banks have pulled back from this market. They have all paid multi-million dollar fines, and are afraid of the reputational risk of making lower quality loans,” Goodman says."

By the way, that risk is not merely "reputational." Put-backs, a way that government sponsored enterprises can throw a failed loan back to its originator rather than to "insure" it, are a whole other kind of risk for lenders.

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