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What We're Reading in Housing: August 8

Throughout the week, the BPC Housing Commission highlights news items that address critical developments in housing policy. Any views expressed in the content posted on this forum do not necessarily represent the views of the Commission, its co-chairs or the Bipartisan Policy Center.

What We’re Reading posts now include a compilation of useful links in the Housing Visualized section below. These resources offer the latest economic indicators, expert insight, and statistical trends related to the U.S. housing market.

Housing Visualized

2010 Census l Mapping the Census l Housing Market Indicators

Infographic: Household Formation Gap l Who Gains Most From Tax Breaks

Infographic: Housing’s Economic Impact l Measuring Economic Mobility

Past Commissions and Reports l Trulia’s Housing Barometer

Credit Conditions l U.S. Housing Summary l Changes in Home Prices

Wells Fargo Monthly Economic Outlook l WF Real Estate & Housing Reports

 


Home Prices Climb as Supply Dwindles

By Nick Timiraos

The Wall Street Journal

“Home prices rose by their largest percentage in at least seven years during the second quarter, propelled by low inventories of properties for sale and high demand for bargain-priced foreclosures, according to two reports Tuesday. Prices rose by 2.5% in June from a year ago, and by 6% from the previous quarter, said CoreLogic Inc., a Santa Ana, Calif., data firm. The quarterly jump was the largest since 2005.” Read more here.


Obama and Romney Should Say What They’ll Do About Housing

By the Editors

Bloomberg

“For an economy that’s growing at an anemic rate of 1.5 percent, you would think there would be more discussion of the U.S. housing market on the campaign trail. The sector has powered past recoveries and is responsible for as much as one-fifth of gross domestic product.

“Yet President Barack Obama has made little more than a passing reference to housing in his campaign, calling it a drag on the economy and recommending an expanded mortgage-refinancing program. Presumptive Republican nominee Mitt Romney has said the government should avoid intervening and allow the housing market to ‘run its course,’ wherever that may lead.” Read more here.


Finally, It Is Time to Buy a House

By David Weidner

The Wall Street Journal

“Warren Buffett famously once said: ‘Be fearful when others are greedy, be greedy when others are fearful.’ And if you’re not instinctively scared of the housing market, then global warming, saturated fat, running with scissors and the bogeyman probably aren’t keeping you awake at night, either. The fact that everyone is scared to dabble in—much less commit to—housing makes it a close-to-perfect investment based on Mr. Buffett’s principle. But buying real estate is a good long-term investment for many more reasons, some of which have only become apparent in recent weeks.” Read more here.


Owning Vs. Renting: Exploring Why and How

By Mike Sorohan

MBA NewsLink

“Fannie Mae conducted predictive modeling to investigate which attitudes, in addition to demographic conditions, best accounted for individuals’ current status as homeowners or renters, as well as their intentions to own or rent if they were to move. The analysis said that consumers consider a mix of demographic and attitudinal drivers in their future ‘next move’ own-rent preferences. Demographics such as income, age, marital status and employment status are the primary drivers of current homeownership status and the own-rent intention for outright homeowners (those who don’t have a mortgage).” Read more here.


How Forgiveness Fits in Housing-Fix Toolkit

By Nick Timiraos

The Wall Street Journal

“Policy makers are wrestling with a dilemma about the overhang of mortgage debt from the housing bust: to forgive or not to forgive? With prices down by one-third from their 2006 peak, more than 11 million homeowners are underwater, or owe more than their homes are worth. That is about 24% of all homeowners with a mortgage, according to data firm CoreLogic.” Read more here.


Rental vacancies at lowest rate since 2002

By Jessica Huseman

HousingWire

“The national residential rental vacancy rate in the second quarter was at 8.6% from 8.8% in the first quarter, the lowest second quarter reading since 2002” Read more here.


Small Banks Are Blunt in Dislike of New Rules

By Victoria McGrane

The Wall Street Journal

“It isn’t unusual for bankers and regulators to have trouble getting along. But the 45-minute sparring match was a sign of the extreme anxiety and agitation over forthcoming rules by the OCC, Federal Reserve and Federal Deposit Insurance Corp. to implement an international agreement known as Basel III… Many are particularly upset about the complex system of determining how much capital a bank must hold against mortgage loans they make. The new rules seek to calibrate capital requirements to more accurately reflect the risk of particular assets on a bank’s books: The riskier the loan, the more capital a bank must have to cover potential losses.” Read more here.


Regulator Rebuffs Obama on Plan to Ease Housing Debt

By Binyamin Appelbaum

The New York Times

“The independent federal agency that administers Fannie Mae and Freddie Mac said…that it would not let the mortgage companies offer debt forgiveness to borrowers, again rejecting the entreaties of the Obama administration. The Federal Housing Finance Agency said it had concluded after months of study that up to half a million homeowners could benefit from such a program, and that taxpayers might save $1 billion because aid recipients would be more likely to continue making mortgage payments. But the agency’s acting director, Edward J. DeMarco, said the benefits most likely would be much smaller — too small in his judgment to offset potential costs, including the risk that some borrowers would stop making payments in pursuit of a better deal.” Read more here.


Mortgage markets react to GSE principal write-down rejection

By Jon Prior

HousingWire

“Investors may see prices ease on Fannie Mae and Freddie Mac mortgage bonds now that the Federal Housing Finance Agency rejected principal reduction on the underlying loans, according to market analysts. Reaction to FHFA Acting Director Edward DeMarco’s decision Tuesday cut predictably among homeowner advocates, politicians and economists.” Read more here.


Quote of the Day

“The U.S. won’t unlock its economy until it unlocks housing, and that’s not going to happen if the candidates aren’t outlining solid steps they plan to take should they get the keys to the Oval Office.”


Boston Fed Study: Homeownership Values Unchanged Among Most Americans

By Steve Cook

Real Estate Economy Watch

“A new study by economists at the Boston Federal Reserve found that the roughly two-thirds of Americans who did not suffer personal loss from the housing crash and whose knowledge of the housing crisis comes from media coverage have not changed their views towards homeownership.” Read more here.


Blacks and Latinos Steered to Government-Backed Loans: Report

By Kate Berry

American Banker

“Black and Latino borrowers received government-backed loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs significantly more often than white borrowers, raising concerns about redlining, a new study has found.” Read more here.


How the Suburbs Gave Birth to America’s Most Diverse Neighborhoods

By Myron Orfield

The Atlantic Cities

“Despite the stereotypes, suburban communities are now at the cutting edge of racial, ethnic and even political change in America. Racially integrated suburbs are growing faster than their white counterparts. Diverse suburban neighborhoods now outnumber those in their central cities by more than two to one. Fully 44 percent of suburban residents in the 50 largest U.S. metropolitan areas live in racially integrated communities, places between 20 and 60 percent non-white.” Read more here.


Merkley refi plan could reach 75% of private underwater mortgages

By Jon Prior

HousingWire

“Roughly 75% of underwater mortgages securitized into private-label bonds could be eligible for a refinance under the new plan from Sen. Jeff Merkley, D-Ore., according to analysts at JPMorgan Chase. The proposal would allow a Rebuilding American Homeownership Trust buy underwater mortgages with revenue from government bonds. The trust would be assembled either in the Federal Housing Administration, the Federal Home Loan Banks system or the Federal Reserve.” Read more here.


Housing Market Hits Boomers Hard

By Kathryn Tuggle

Fox Business

“America’s older generation may have paid their financial dues and time in the labor market, but unfortunately they’re not immune to the housing crisis. According to a study by AARP, 600,000 homeowners of the over-50 set are in foreclosure, and about 625,000 are at least three months behind on their mortgage payments. Approximately 3.5 million boomers—16%—are underwater on their mortgages and owe more than their home is currently worth.” Read more here.


Denver Rethinks the Modern Commuter

By Kris Hudson

The Wall Street Journal

“As Denver moves forward with a $7.4 billion expansion of its rail system, the city is looking to rectify what some see as a flaw in the original concept. The dilemma is how to encourage the development of dense, walkable villages around stations so people don’t have to drive to use the system.” Read more here.


Housing Expert Forum

Do alternative forms of homeownership, such as shared equity models and rent-to-own programs, present viable alternatives for future homeownership?

Read the responses here.

2012-08-08 00:00:00

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