What We're Reading: November 4

Throughout the week, the BPC Housing Commission will highlight news articles 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.

Fannie regulator pushing local foreclosure fixes

By Margaret Chadbourn

Reuters

“Fannie Mae and Freddie Mac’s regulator said on Thursday that its efforts to unload government-owned foreclosed properties for conversion into rentals would be tailored to specific communities. The Federal Housing Finance Agency, which oversees the two taxpayer-owned mortgage finance firms, is poring over nearly 4,000 public responses on how to entice investors to buy these vacant properties and turn them into rental units.” Read more here.

National Housing Survey Shows Correlation between Consumer Attitudes and Personal Experience

Fannie Mae Press

Release

“This latest survey shows that those exposed to default have similar attitudes about buying a home as those who do not know people that have defaulted. However, the survey also finds greater pessimism about the economy and personal finances among consumers who know defaulters. ‘Knowing someone who has defaulted on their mortgage appears to be correlated with consumers being slightly more pessimistic about the direction of the economy, their finances, and their ability to obtain a mortgage, but does not materially correlate with their desire to own a home or their view of housing as a safe investment,’ said Doug Duncan, vice president and chief economist of Fannie Mae.” Read more here.

Donovan on Loan Limits: Let’s ‘See What the House Decides’

By Alan Zibel

The Wall Street Journal

“Back in February, the Obama administration called for a decline in the maximum size of government-backed home loans as a way to start drawing back federal support for the nation’s mortgage market. They dropped on schedule on Oct. 1 but now a movement is afoot to revive the higher limits to support the ailing housing market. Housing and Urban Development Secretary Shaun Donovan said in an interview Wednesday that while administration officials want to reduce the government’s support of the housing market “in the long run,” they also understand the need to support a weak part of the economy.” Read more here.

Where the Poorest Americans Live

By Elizabeth Kneebone and Alan Berube

The Atlantic

“Given past trends, we estimate that the concentrated poverty rate in U.S. metro areas grew to 15.1 percent in 2010 – up considerably from 11.7 percent in 2005-09, and nearing its 1990 high of 16.5 percent. Many of the Sun Belt metro areas that posted modest gains against concentrated poverty in the 2000s, like Bakersfield, Stockton, and Charleston, likely gave back all that progress late in the decade amid devastating increases in unemployment and overall poverty.” Read more here.

That New Renter? Probably a Single Mom

By Matthew Strozier

The Wall Street Journal

“Among renters, single moms saw the biggest growth among household types between 2000 and 2010, according to Census data analyzed by Property and Portfolio Research, a real-estate forecasting firm owned by CoStar. And despite all the talk these days about meeting the needs of young and old renters, most renters are middle aged, or between 35 and 64, including those all-important single moms. (Of course, “middle age” here is a big group, comprising the largest share of all households.)” Read more here.

Fannie says consumer spending rise not enough to spur home sales

By Kerri Panchuk

HousingWire

“According to the survey, 92% of the homeowners who reported knowing someone in default said owning a home still makes more sense than renting. About 67% of homeowners who know defaulters said buying a house is a safe investment, while only 39% of renters who know defaulters said they’re likely to buy their next residence.” Read more here.

Rising from the ruins

By Kerri Panchuk

The Economist

“The economic landscape is unquestionably littered with the wreckage of the crash. Home prices languish near post-bubble lows, over 30% below peak. The plunge in prices has left nearly a quarter of all mortgage borrowers owing more than the value of their homes; nearly 10m are seriously delinquent on their loans or in foreclosure. The hardest-hit markets are ghost neighbourhoods, filled with dilapidated properties. Housing markets are far from healthy. Yet current pessimism seems overdone. A turnaround in sales, prices and construction may be closer than many imagine.” Read more here.