The increased credit regulations for first time buyers will cause further economical strain in the future as there are a lot of people who will never be able to afford a mortgage or a deposit as they don't have the upfront funds to do so. Having more credit regulations will make it a lot harder as salaries are being stress tested
The red tape of buying a home has only increased since the recession. Putting more barriers in place for first-time home buyers along with the decrease in first-time home buyer down payment assistance programs have negative consequences on the average person and communities trying to increase their property values. These regulations will result in reasonably priced houses being purchased by investors who will rent out the properties and lower the value of other homes in the area. The increased regulations will leave prospective homeowners with fewer options that include renting from the same investors for higher than they would be paying for a mortgage perpetuating the cycle leading to further economic strain.
People wish to have their own home to have a place where they can live with peace. So the process of getting a home should also be peaceful and convenient for first time home buyers. First time buyers should be scruitinized well but imposing increased credit regulations will cause strain as well. By tightening criteria of credit regulation, hopefully millions of people will be filtered out from the bracket of people who can have their own home. Doing so will create panic and disappointment among the effected people which may result in unsatisfactory financial indicators.
One of the major reasons for the economic hardships our country has been experiencing in the last several years was that many unqualified people were given loans that they could not afford, and the result was that they were foreclosed on. Tighter lending standards should ensure that people will not be given loans that they will default on. Credit will be a little tighter, but at the end of the day, the ovearll system will be more stable.