Economist: Build Back Better Will Put Downward Pressure on Housing Prices

By SCOTT KIMBLER The House version of President Biden’s “Build Back Better” plan includes about $170 billion for affordable housing and people are asking what that means. Biden’s spending plan includes $65 billion to preserve and rebuild public housing and another $15 billion to help build or preserve more than 150,000 rental properties for lower-income families. It’s part of the administration’s goal to build or preserve 1 million affordable homes. The bill is almost certain to change drastically in the U.S. Senate. But if the housing policies remain unchanged, what would this spending splurge mean for the overall housing market, at a time when prices are high and supply is low? The Mortgage Note spoke with Tom Smith, Ph.D. of…

Mortgage Applications Up From September, Down YOY

Mortgage applications for new home purchases fell 15.2% year-over-year (YOY) in October but increased 6% month-over-month (MOM), according to the Mortgage Bankers Association’s (MBA) latest Builder Application Survey. The increase from September puts MBA’s estimate of new home sales at its strongest pace since January 2021. “Purchase activity continues to be dominated by higher loan balance transactions, which pushed the average new home loan size up to over $412,000, another new record in the survey,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.  “Recent U.S. Census data show an increasing share of new sales are for homes yet to be built or still under construction, and a shrinking share of completed homes. Housing demand remains strong,…

Why Wait Until Spring To Sell Your Home?

By KIMBERLEY HAAS When the holiday season starts, people are typically reluctant to put their homes on the market due to a lack of potential buyers. But this could be the year when that changes. In a recent article at Realtor.com, the company’s Chief Economist Danielle Hale said sellers can expect to see plenty of buyers this winter. Lawrence Yun, Chief Economist at the National Association of Realtors, agreed. He expects there will be more home sales this winter than there were prior to the COVID-19 pandemic. That is good news for sellers, especially since CNN Business reported last week that the median price of single-family existing homes rose in 99% of the 183 markets tracked by employees at the…

White House Details Plan to Bolster Affordable Housing

President Joe Biden on Wednesday announced a major initiative to bolster affordable housing in the face of a surge in home prices that is preventing some Americans from becoming homeowners. “The large and long-standing gap between the supply and demand of affordable homes for both renters and homeowners make it harder for families to buy their first home and drives up the cost of rent. Higher housing costs also crowd out other investments families can and should make to improve their lives, such as investments in education,” the White House said in a statement. “President Biden is committed to using every tool available in government to produce more affordable housing supply as quickly as possible, and to make supply available to…

Morning Roundup (8/27/21) – Eviction Moratorium Lifted, Bitcoin Play Raises Concerns

Good Morning! Today is Friday, Aug. 27. A terrorist attack at the Kabul airport killed 13 U.S. service members and at least 90 Afghans. President Biden said airlift efforts would continue despite the attack. Capitol Police officers sued former President Trump, along with groups like the Proud Boys, over the January 6 riot, saying they incited violence against officials and police. Hawaii’s Governor David Ige asked travelers to stay home through October as hospitals struggle with rising Covid cases. And in mortgage and housing news… Mat Ishbia’s Bitcoin Play Raises Concerns: UWM CEO Mat Ishbia’s announcement that he intends to accept Bitcoin has raised questions among economists and within the industry about encouraging consumers to rely on the “volatile” cryptocurrency for their mortgage payments.…

Supreme Court Ends Biden’s Eviction Moratorium

In an unsigned opinion released Thursday, the Supreme Court lifted the Biden administration’s latest moratorium on evictions, declaring that it is almost certain the Centers for Disease Control exceeded their authority by imposting it. The conservative majority sided with the Alabama Association of Realtors who argued that imposing such a moratorium requires congressional action, which is the position Justice Brett Kavanaugh took in his June, 2021 ruling on the issue. At least 11 million renters are considered seriously delinquent on payments, and an estimated 3.6 million households could face evictions in the coming months. “It would be one thing if Congress had specifically authorized the action that the CDC has taken,” the Court’s 8-page opinion states. “But that has not…

Just 11% Of Rental Assistance Funds Distributed

Federal efforts to help renters cover their monthly payments have largely failed, as theTreasury Department reports just $1.7 billion of the $46.5 billion rental aid program’s funds have been disbursed, leaving 89 percent untouched. “About a million payments have now gone out to families — it is starting to help a meaningful number of families,” Gene Sperling, who oversees the operation of federal pandemic relief programs for President Biden, told the New York Times. “It’s just not close to enough in an emergency like this to protect all the families who need and deserve to be protected. So there is still way more to do and to do fast. The Emergency Rental Assistance Program was created to provide funds to…

Interest Rates Are Higher Under Biden. Good News or Bad?

The hot talk in Washington is about inflation, not interest rates. “We’re experiencing a big uptick in inflation, bigger than many expected, bigger certainly than I expected, and we’re trying to understand whether it’s something that will pass through fairly quickly or whether, in fact, we need to act,” Federal Reserve Chairman Jerome Powell told the Senate Banking Committee last week. Meanwhile, U.S. mortgage interest rates have risen since President Joe Biden took office in January according to Federal Reserve data. On the day he was inaugurated, the 30-year fixed rate was around 2.75 percent. By April 1, it had risen to 3.18 — its highest level since June of last year. Rates have been gradually declining since then but have…

White House Promotes Rescue Plan Housing Benefits

The White House took to Twitter on Thursday to promote the housing-related benefits included in the $1.9 trillion American Rescue Plan. Here’s what they had to say: Across the country, millions of Americans are struggling to keep a roof over their head. Here’s a breakdown of how the American Rescue Plan will help:— The White House (@WhiteHouse) March 18, 2021 The American Rescue Plan provides more than $21.5 billion in emergency rental assistance to help millions of families keep up on their rent and remain in their homes.— The White House (@WhiteHouse) March 18, 2021 The bill includes $10 billion to help homeowners behind on their mortgage and utility payments — helping avoid foreclosures.— The White House (@WhiteHouse) March 18,…

What Joe Biden Means For The Mortgage Industry

By Elise Daniel When Vice President Joe Biden entered the White House in 2008, he inherited an economic recession and subprime mortgage crisis in which millions of people lost their homes due to foreclosure. Bank bailouts, stimulus packages, and financial regulation followed. The burning question for lenders in 2021 is: How will President Biden, who’s been around this block before, respond to today’s complex housing market that has been propped up by forbearance and historically low interest rates?  Just hours after swearing in, Biden signed an executive order that pushed back the federal eviction moratorium to the end of March. He’s asked Congress to extend the grace period until the end of September and plans to call on the Federal Housing Finance Agency to extend the foreclosure…