{"id":1882,"date":"2015-02-25T14:07:36","date_gmt":"2015-02-25T18:07:36","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=1882"},"modified":"2019-07-06T07:30:16","modified_gmt":"2019-07-06T11:30:16","slug":"stumbling-housing-market-reignites-housing-policy-debate","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2015\/02\/25\/stumbling-housing-market-reignites-housing-policy-debate\/","title":{"rendered":"Stumbling housing market reignites housing policy debate"},"content":{"rendered":"\n
\"real<\/a><\/figure><\/div>\n\n\n\n

Surely 2015 is to be the year when the housing market would bounce back <\/a>from its recent disappointing performance; at least that\u2019s what I wrote back in November. But as January\u2019s news from the National Association of Realtors\u00ae (NAR) is not as rosy as we expected; a housing policy debate, that has been subdued since 2010, gets heated.<\/p>\n\n\n\n

The NAR revealed in a February 23<\/a>rd<\/a><\/sup> press release<\/a> (nar.realtor) that although the pace of home sales increased compared to the same time last year, existing homes sales have declined to the lowest rate in nine months. The typically optimistic Lawrence Yun (NAR Chief Economist) was cited as saying \u201cthe housing market got off to a somewhat disappointing start to begin the year with January closings down throughout the country<\/em>.\u201d\u00a0\u00a0 Adding that \u201cseasonal influences\u201d can make January data erratic, the combination of low inventory and home price gains over the pace of inflation seems to have slowed home sales \u2013 notwithstanding low mortgage interest rates.<\/p>\n\n\n\n

Keeping mortgage interest rates low is not the sole solution; however, if it was, the housing market may have bounced back several years ago. Although a myriad of causes have been blamed for a lackluster housing market that has been trying to make a comeback for six years, most are correlational and incidental.<\/p>\n\n\n\n

However, Richard X. Bove (Equity Research Analyst at Rafferty Capital Markets) recently made a case for a sole cause in his February 23rd<\/sup> commentary (There’s a new mortgage crisis brewing<\/a><\/em>; cnbc.com\/id\/102447414). Bove described how mortgage markets are in trouble; rules and regulations put into place to strengthen the market by increasing borrower standards have dried up a lot of the funding. And not necessarily in the way you might expect; besides shrinking the pool of qualified buyers, Bove suggested that the rules and regulations have made mortgage lending unprofitable and unpalatable for some lenders (leading them to walk away from the business).<\/p>\n\n\n\n

As a response, it would seem as if the Federal Housing Finance Agency (FHFA) took steps to make mortgages increasingly available (returning to 3% down payment loans, and increasing the number of loans on Fannie and Freddie\u2019s balance sheets). These actions, along with recorded losses in Q4 2014, Bove described, is making some nervous.<\/p>\n\n\n\n

If you don\u2019t remember, the FHFA was created in 2008 <\/a>as a temporary conservator to Fannie Mae and Freddie Mac; whose original goals included: ensuring a positive net worth for Fannie and Freddie; reducing Fannie and Freddie\u2019s mortgage portfolios; and facilitating a streamlined and profitable model for Fannie and Freddie.<\/p>\n\n\n\n

Bove\u2019s catch-22 conclusion, of either hindering the housing market by stopping Fannie and Freddie\u2019s growth or increasing Fannie and Freddie\u2019s debt obligations with continued growth, is not a new dilemma. The debate has been ongoing since 2008.<\/p>\n\n\n\n

Having faded somewhat since 2010, the housing policy debate heated up during testimony given by FHFA Director Mel Watt on January 27th<\/sup> during the congressional hearing, \u201cSustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency<\/a><\/em>.\u201d Trey Garrison of HousingWire succinctly portrayed opposing views (January 27, 2014; FHFA hearing: GOP fear housing policy headed for Crash 2.0<\/a><\/em>; housingwire.com): \u201cDemocrats said policies in the past year are necessary to expand housing opportunities to lower income and challenged borrowers\u2026<\/em>\u201d while, \u201c\u2026Republicans\u2026said the administration is adopting dangerous policies that risk another housing crash that will put taxpayers on the hook for billions.<\/em>\u201d<\/p>\n\n\n\n

By Dan Krell
\u00a9 2015<\/p>\n\n\n\n

\"Protected<\/a><\/figure>\n\n\n\n


Disclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Surely 2015 is to be the year when the housing market would bounce back from its recent disappointing performance; at least that\u2019s what I wrote back in November. But as January\u2019s news from the National Association of Realtors\u00ae (NAR) is not as rosy as we expected; a housing policy debate, that has been subdued since … <\/p>\n

Continue reading “Stumbling housing market reignites housing policy debate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[166,139,288,55,13,26],"tags":[881,870,466,821,797,593],"class_list":["post-1882","post","type-post","status-publish","format-standard","hentry","category-fhfa","category-home-sales","category-housing-market","category-mortgage","category-real-estate","category-real-estate-market","tag-fhfa","tag-home-sales","tag-housing-market-2","tag-mortgage","tag-real-estate","tag-real-estate-market-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-um","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=1882"}],"version-history":[{"count":5,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1882\/revisions"}],"predecessor-version":[{"id":5139,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1882\/revisions\/5139"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=1882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=1882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=1882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}