AEI Housing Center Releases Positive Predictions For Home Price Appreciation

By SCOTT KIMBLER Home price appreciation will continue to climb throughout 2024, according to the latest analysis by leaders at AEI Housing Center. Tobias Peter, co-director and senior fellow at AEI, spoke during a presentation earlier this month and said even though purchase volume is down, data suggests home price appreciation will rise over the course of this year. Peter said because buyers are well qualified and there is continued competition due to the strong sellers’ market, HPA is expected to be around 5% by December. Those numbers can vary. A bullish projection shows an increase of between 6% and 8%. A bearish projection ranges from 0% to -2%. Data from February showed month-over-month HPA was up 1.1%, a reversal…

Opinion: HUD Homeless Count Fails To Connect Dots On Supply And Displacement

By EDWARD PINTO On December 15, HUD released its annual Point-In-Time (PIT) homeless and housing inventory counts (HIC) conducted in January 2023. The key finding was that homelessness reached a record high as the 2023 annual count increased 12% and 18% respectively from 2022 and 2017. The average rate of homelessness per 1,000 population in 2023 was 20. The PIT is calculated for the 381 local and state Continuums of Care (CoC), which HUD uses to track homelessness. The hundred-plus page report had lots of data along with a handful of anecdotal references to burgeoning housing purchase and rental costs. However, it contained precious little insight as to the steps needed to address our burgeoning homeless problem. Conspicuous in its…

Opinion: Connecting The Dots On The Helper Act

By TOBIAS PETER As rising home prices continue to undermine the American Dream of homeownership for hard-working Americans, Congress is considering a bipartisan bill modeled after the successful VA home loan program, to help first responders and teachers buy a home. However, as long as there is a housing shortage, first-time homebuyer assistance programs, such as the Homes for Every Local Protector, Educator, and Responder (HELPER) Act of 2023 are part of the problem, not the solution. The HELPER Act, with over 100 cosponsors in the House and Senate, aims to exempt potential buyers from putting any money down or purchasing mortgage insurance, which is typically required for homebuyers putting less than 20% on a down payment. In addition, the…

Taking A Closer Look At Home Appraisal Reforms

By SCOTT KIMBLER As officials work to address racial bias in home valuations, leaders at a public policy think tank in Washington, DC, are saying recent recommendations made by a federal task force miss the mark. The Interagency Task Force on Property Appraisal and Valuation Equity, or PAVE for short, was created in June of 2021 to tackle the problem of racial and ethnic bias in home valuations. Comprised of 13 federal agencies and offices, it is co-led by officials at the U.S. Department of Housing and Urban Development and the White House Domestic Policy Council. In March of 2022, the PAVE Action Plan was released, and this past June the Biden-Harris administration announced a set of actions to deliver…

Administration: Buyers Will Save Money On Mortgage Payments Through Premium Reduction

By KIMBERLEY HAAS The Biden administration has announced a reduction on mortgage insurance premiums in a move they say could benefit an estimated 850,000 borrowers over the coming year. New borrowers who take out loans insured by the Federal Housing Administration will see the effects of the reduced premiums, according to a press release. The premiums will be reduced from 0.85% to 0.55% for most homebuyers, which could mean an estimated savings of $678 million for American families by the end of 2023, according to officials. Vice President Kamala Harris and Department of Housing and Urban Development Secretary Marcia Fudge made the announcement in Bowie, Md., on Wednesday. White House officials said the average homebuyer in Prince George’s County –…

Opinion: Another Pointless Government Mortgage Pricing War Begins

By TOBIAS PETER  Last month, at the behest of the Federal Housing Finance Agency, Fannie Mae and Freddie Mac, the government-sponsored enterprises, announced new risk-based pricing guidelines that loosen mortgage credit for higher-risk loans. Since the Federal Housing Administration traditionally serves higher-risk borrowers, this move represented the latest salvo in a renewed battle for such borrowers. As a response, FHA is rumored to announce today (2/22/2023) a 30 bps mortgage insurance premium cut that will expose taxpayers and not help prospective homebuyers. The last time FHFA imposed credit loosening on the GSEs in 2014, FHA responded shortly thereafter in kind with a large 50 bps MIP cut. At the time, FHA predicted that this cut would lead to 250,000 new…

AEI Housing Center Leaders Demand More Complete Research On Mortgage Inequity And Race

By SCOTT KIMBLER Racial inequity and home appraisals have caught the attention of leaders at the American Enterprise Institute Housing Center in Washington, D.C. AEI is a think tank supported by contributions and designed to keep an eye on policies and trends regarding the U.S. housing market. Leaders there say their goals are to provide transparent and objective mortgage and housing market trends, foster a stable system of mortgage finance that promotes sustainable homeownership, and develop market-based solutions to the nation’s shortage of economical housing. Tobias Peter, research fellow and assistant director of the AEI Housing Center, explained how people have been uncovering racial bias in appraising in recent years, oftentimes making news headlines. “A black homeowner wants to get…

Home Prices Are Cooling Faster In The West

Home price appreciation is leveling out on a national level, but zooming in on price points and regions reveals a more complex picture, according to new data from the AEI Housing Center. The center looked at how home price appreciation is changing, first by price tier and then by specific metros and geography. While June home price appreciation dropped to nearly zero month-over-month nationally, the story is completely different when analyzing these two metrics. In the first, the Center divided home sales into four price tiers based on their access to leverage. Doing so revealed that appreciation is slowing across all tiers, especially when it comes to the highest level. High-price tier homes were the first to show a negative…

Rates Rise To 5.54%

Mortgage rates rose from an average of 5.51% to 5.54% last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.54%. A year ago at this time, the 30-year FRM averaged 2.78%. “The housing market remains sluggish as mortgage rates inch up for a second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist.  “Consumer concerns about rising rates, inflation, and a potential recession are manifesting in softening demand. As a result of these factors, we expect house price appreciation to moderate noticeably.” Mortgage loan applications are tumbling as buyers are priced out by the combination of increasing interest rates and sky-high home prices. But the AEI Housing Center recently…

Homebuyers Competing With Cash Offers Get A Break

By KIMBERLEY HAAS Guild Mortgage has launched a national program that can help potential homebuyers compete with all-cash offers. Vice President of Product Strategy Erin Watts said in a recent interview with The Mortgage Note that they are doing everything they can to help homebuyers compete in today’s market. “We were getting these really well-qualified homebuyers that needed to get mortgage financing but they just kept missing out due to these cash offers,” Watts said. How does CashPass Work? When homebuyers apply for a loan with Guild Mortgage, they let them know they are interested in CashPass. They then provide the same information that they would need for pre-approval for a conventional loan. A minimum credit score of 680 is…