The Federal Reserve outlined a plan to begin tapering its emergency bond purchases. The purchases of $120 billion per month in Treasuries and mortgage-backed securities (MBS) were a government effort to keep financial markets afloat after the economic fall out from Covid-19. The Federal Open Market Committee (FOMC) met for two days this week then released a statement saying the Fed will begin tapering those purchases later this month. It will reduce its purchases of Treasury securities from $80 billion to $70 billion and from $40 billion to $35 billion for mortgage-backed securities. “In light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace…
New York Governor Kathy Hochul signed legislation expanding the Community Reinvestment Act (CRA) ‘s anti-redlining requirements to non-depository lenders. The New York Senate delivered the bill to Governor Hochul on Friday. Now that the bill is signed, it will become law in 90 days. The CRA is national legislation enacted in 1977 in response to the redlining of poor and minority communities by banks during the 1960s and 1970s. Several states, including Massachusetts, Illinois, and New York, have their own versions. New York’s largely mirrors the federal law. It mandates that banks help meet the credit needs of communities in which they take deposits, specifically in low- and moderate-income neighborhoods. The expansion diverges from federal law, however. A New York…
Lawrence H. Summers, who served as Bill Clinton’s Treasury Secretary and was one of Barack Obama’s chief economic advisors, says “housing inflation is almost certain to soar in coming months,” and he’s taking the current Treasury chief to task over her rosy view of inflation. Former Treasury Secretary Summers has been sounding the alarm over inflation for months, even as current Treasury Secretary Janet Yellen has claimed the problem is “transitory” and not a significant threat to the economy. In response, Summers has criticized the Biden administration’s economic response to the pandemic, warning that rising inflation isn’t a temporary concern but a long-term problem the Fed will have trouble reining in. “We are printing money, we are creating government bonds,…
A new poll from Fox News shows 9 in 10 Americans are worried about inflation, and they aren’t alone. A growing consensus among housing and banking analysts is that, while the Federal Reserve gets most of the attention, the real force impacting mortgage rates in the coming months is inflation. And that’s a factor much harder for policymakers to impact than the Fed. “If you haven’t yet refinanced, do so now,” says Greg McBride, chief financial analyst for Bankrate. “The likelihood is that we see higher rates, not lower rates in the months ahead.” While an entire industry has grown up around ‘Fed watching’ — tracking every hint dropped by Federal Reserve Chairman Jerome Powell and his counterparts — inflation…
Attorney General Merrick Garland announced a Department of Justice (DOJ) initiative to combat discriminatory redlining policies that make homebuying more difficult for borrowers of color. In remarks to staff, Garland said the DOJ initiative will target “modern-day redlining.” The DOJ will investigate and prosecute banks with the help of U.S. attorneys around the nation, as well as the Consumer Finance Protection Bureau (CFPB) and the Treasury Department. “Lending discrimination runs counter to fundamental promises of our economic system,” he said. “When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated.” Redlining is a practice of lenders denying loans based on the racial makeup of an…
Housing stakeholders gathered at the nation’s capitol to call for the budget reconciliation package being negotiated in Congress to substantially support housing. The group included National Association of Realtors (NAR) CEO Bob Goldberg, members of the National Housing Conference (NHC), Mortgage Bankers Association (MBA), Habitat for Humanity, National Association of Homebuilders, and others. Representative Sherrod Brown (D-OH), chairman of the Senate Banking, Housing, and Urban Affairs Committee, and Representative Maxine Waters (D-CA), chairman of the House Financial Services Committee, also attended. “Housing is fundamental to an economy that works for all. Democrats and President Biden understand this,” Chairman Brown said in his speech. “Robust housing investments support families and kids, improve health outcomes, and address climate change – while creating…
The housing market in red states is white-hot compared to their blue counterparts, a new analysis finds. As U.S. housing prices remain high and experts predict the trend will continue, states led by Republican legislatures and governors are disproportionately represented among the hottest housing markets in the country, with experts offering a variety of explanations as to why that might be. Data analyst firm CoreLogic noted this month that “home prices nationwide, including distressed sales, increased year over year by 18.1% in August 2021 compared with August 2020, marking the largest annual gain in home prices in the 45-year history of the CoreLogic Home Price Index.” That price spike was driven by a sharply constricted housing supply that saw homebuyers scrambling to…
Economists from Fannie Mae’s Economic and Strategic Research (ESR) group anticipate that mortgage rates and home prices will increase in 2022, according to the group’s October 2021 Forecast commentary. The group cites inflation, tightening monetary policy, and continuing home stock shortages as drivers of higher prices in 2022. Fannie Mae’s October economic forecast predicts the 30-year fixed-rate mortgage will average 3.3% in 2022. It raised its prediction of 3.1% last month in anticipation of the Federal Reserve tapering its purchase of mortgage-backed securities, which is expected to start by the end of this year. “While we still view the supply chain disruptions and, to a lesser extent, labor market tightness as largely transitory, we now expect both to last even…
With COVID-era forbearance programs coming to an end, some housing activists warned of an approaching flood in forbearance filings. But so far, that hasn’t happened, and the signs are good that forbearance rates will remain low. The end of government forbearance protections is indeed causing an increase in the number of foreclosure filings. ATTOM’s latest Foreclosure Market Report, for Q3 2021, finds scheduled auctions or bank repossessions are up 34% from the previous quarter and 68% from a year ago. However, those increases are from historic lows, as forbearance relief artificially lowered the numbers. In fact, there were just 45,517 U.S. properties with foreclosure filings in the quarter. “Despite the increased level of foreclosure activity in September, we’re still far…
Women have been disproportionately impacted by the pandemic, but none more so than single women. After Covid-19 ravaged their work and home lives, almost 60% of single female heads of household (SFHOH) now say they don’t see homeownership in their futures, a Freddie Mac survey found. “The COVID-19 pandemic has had disparate economic impacts nationwide, particularly on women who are heads of their households, such as single moms and caretakers,” said Pam Perry, Single-Family Vice President of Equitable Housing. “In this survey, we discovered this population’s housing and financial challenges have been further complicated by pandemic-related workplace disruptions and current economic conditions. While the survey showed some feel confident in their knowledge of finances and building credit, many lack confidence…
