A panel of experts will debate the best path forward for Fannie Mae and Freddie Mac after a decade of government conservatorship.
Imposing prudent underwriting standards will improve home affordability, head off a new wave of mortgage foreclosures, and protect the most vulnerable Americans.
More leverage in the long-lasting seller’s market, now in its 67th month, is causing higher house prices concentrated at the lower end of the market where leverage has been increasing the most.
The implications of leverage during a long-lasting seller’s market, now in its 67th month, are higher house prices concentrated at the lower end of the market where leverage has been increasing the most.
Since their trough in 2012, home prices have risen at an annual average rate of 5.5%, far more rapidly than incomes or inflation. Ultimately, more supply is needed to bring the market back into equilibrium, but that takes time and is unlikely to happen soon.
As the AEI Center on Housing Markets and Finance has been predicting, the national home purchase market continued its rally in 2017:Q4. Sales transactions increased 5.4% in the fourth quarter compared to a year ago, marking the 13th consecutive quarter of such increases.
Don’t let the government housing lobby push policymakers away from ending any subsidies for very long-term fixed-rate mortgages.
The Taxpayer Protection Housing Finance Plan describes how government-sponsored enterprises can be gradually eliminated over time through administrative action alone. Legislation will not be necessary.
The trend toward higher first-time buyer risk continued this month primarily driven by higher debt-to-income ratios. As long as this trend continues during a very tight market, expect even higher house prices, especially for entry-level homes, and even greater first-time buyer risk.
New research by the AEI Housing Center suggests that another cut to the FHA insurance premiums charged to homebuyers would reduce affordability and add few new homebuyers.
Rather than promise the impossible—making housing affordable by decree—municipal governments should embrace practical solutions
Moving forward, there will be even more risk as borrowers, especially first-time buyers, are forced to take on more leverage to buy.