A New Housing Crisis Possible

James Woodard
Sun, 30 Oct 2016 21:00:00 -0700
Lifestyle

Several housing leaders and agencies are now warning of a possible crisis looming in our market. The Federal Reserve, for example, says it is worried that the shortage of homes for sale could stall the housing recovery and take a toll on the economy.

"In its minutes released from its last meeting, the Fed talks about its concerns over the "new housing crisis," saying the housing market was starting to look weak and "real residential investment spending continued to be soft in the third quarter," it was reported by the National Association of Realtors.

"A couple of participants pointed to limited availability of lots and a shortage of skilled labor as restraining residential construction activity in their Districts."
Updated: Mon Oct 31, 2016

Several housing leaders and agencies are now warning of a possible crisis looming in our market. The Federal Reserve, for example, says it is worried that the shortage of homes for sale could stall the housing recovery and take a toll on the economy.

"In its minutes released from its last meeting, the Fed talks about its concerns over the "new housing crisis," saying the housing market was starting to look weak and "real residential investment spending continued to be soft in the third quarter," it was reported by the National Association of Realtors.

"A couple of participants pointed to limited availability of lots and a shortage of skilled labor as restraining residential construction activity in their Districts."

The report pointed to one example of a district where the lack of homes was having a strong effect on its economy.

"In one District, constraints on the supply of new homes for sale were expected to boost spending on home improvements and offset some of the drag from the slowing in new construction," the minutes state.

"Inventory is not keeping up with demand from younger professionals who are looking for a home, the Fed notes. That is prompting home prices to rise and is pricing first-time home buyers out of the market.

"Economists are anticipating the Fed's next policy meeting, slated for Dec. 15 and 16, when many forecasters predict it will raise its benchmark federal-funds rate from near-zero."

Q: Are mortgage originations expected to increase in the next year or so?

A: The Mortgage Bankers Association announced that it forecasts $1.10 trillion in purchase mortgage originations during calendar year 2017, an 11 percent increase from 2016.

"In contrast, MBA anticipates refinance originations will decrease by 40 percent, resulting in refinance mortgage originations of $529 billion. In total, mortgage originations are expected to decrease to $1.63 trillion in 2017 from $1.89 trillion in 2016," MBA reported.

"For 2018, MBA is forecasting purchase originations of $1.18 trillion and refinance originations of $410 billion for a total of $1.59 trillion."

Q: Considering today's home foreclosures, is there a difference between men and women homeowners?

A: I recently received a news release that focused on an interesting angle related to that question. Here is part of that release:

"A few months back ATTOM Data Solutions (parent company to RealtyTrac) released an analysis looking at the housing gender gap between the two sexes. Now ATTOM Data Solutions took a look at the foreclosure gender gap for the nation.

"We found that overall male homeowners have slightly higher foreclosure rates (73 out of 10,000 homeowners in foreclosure), while 72 out of every 10,000 female homeowners is in foreclosure.

"The only exception is for single men homeowners (70 out of 10,000 homeowners in foreclosure), who have a lower foreclosure rate than single women homeowners (73 out of 10,000 homeowners in foreclosure). But married men and widowers both have significantly higher foreclosure rates than married women and widows."

Q: Are the new federal closing rules nearly finalized?

A It's been a little more than a year since new federal closing rules took effect. Under the rules, the HUD-1 Settlement Form was replaced with a new Closing Disclosure, the Good Faith Estimate was replaced with a new Loan Estimate, and some new timing requirements were imposed, it was reported by the National Association of Realtors.

"Real estate professionals continue to have concerns with the changes and were among the many people and organizations that submitted almost 1,600 comments to the Consumer Financial Protection Bureau as it works to finalize a rule that would try to improve the process."

Q: Why aren't more women involved in the mortgage field?

A: One major organization is taking action to correct that situation. Here's a portion of a release I recently received:

"The Mortgage Bankers Association has launched a new networking platform for women in the real estate-finance industry. mPower - MBA Promoting Opportunities for Women to Extend their Reach — will provide an opportunity for women to strengthen their networks, achieve professional growth, and exchange ideas and information about the industry."

Q: Are mortgage applications rising?

A: Yes, at this writing applications are slowly increasing.

Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey.