Urban Institute Info Graphic - Backsliding on Equal Housing Opportunity

New Info Graphic Paints a Sad Picture of How Far Lending to Under-Served has Fallen

The Urban Institute's Housing Finance Policy Institute launched a year ago with a commitment to bringing unbiased and factual information to the housing debate. This most recent release shows the progress made in understanding what is actually happening in markets today. This info-graphic is a stunning story of America's housing finance system's failure to serve minorities.

Visit the Urban Institute's Info Graphic to drill down 

According to the data, this may represent one of the contributing factors to the sluggish housing recovery.  Taking 13% of the market out of the equation could have that effect.

Interestingly, FHFA just announced the proposed affordable housing goals for Fannie Mae and Freddie Mac. Aside from the fact that these "affordable housing" goals provide a politically correct subtext for lending to minorities, these goals do not increase current objectives substantially, except for targeting low income areas instead of individuals.

A 3% annual increase in Low Income purchases goals is not going to replace
the 13% of the population excluded since the crash. Source Federal Housing Finance Agency

For those involved in primary origination, perhaps this is the signal to develop business models that focus on minority markets. Failure, on the part of the industry, to provide a private sector solution to this problem in today's environment of regulated compensation and higher priced mortgage lending restrictions would acknowledge the real problem; today's regulatory scheme deprives a large segment of the population of access to home ownership.

This data show continued regulatory insistence on consumer protection by stifling private enterprise will ultimately hurt all Americans by creating wealth inequality, and depressing markets broadly.

Citations

Bai, B. & George, T. A new view of the housing boom and bust. (2014, September 10). Retrieved September 18, 2014, from http://datatools.urban.org/Features/mortgages-by-race/#5/39.809/-94.812

Russell, C., & Johnson, S. (2014, August 29). Affordable Housing Goals for 2015-2017. Retrieved September 18, 2014, from http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Proposes-2015-2017-Housing-Goals-for-Fannie-Mae-and-Freddie-Mac.aspx

Washington Month-to-Month Real Estate Still STRONG

For buyers who are waiting for the prices to come down further, this may be the news that pushes them off the fence.  While some areas are seeing softness, prime locations, such as Arlington, Washington, DC, and Montgomery Counties are seeing diminished supply and shorter marketing times. 

Metrostudy reports Northern Virginia saw sales that were down 7% vs September 2011, while listings are down 33%.  Overall inventory ticked up slightly from 4.1 months, but is still considered well below equilibrium. Prices continue to increase in the core counties where inventory is tighter. 

Washington DC side of Maryland saw sales which were up 1%.  Listings are down by 30% vs the prior year.  The months of supply of listings was unchanged at 5.6 months of supply, which is considered just below equilibrium.  Montgomery and the District both saw the months supply increase, while Frederick, Prince George’s and Charles saw significant tightening, dropping 0.2 months, 0.3 months and 0.4 months of supply, respectively.  Prices were down, albeit slightly in most areas, with Montgomery seeing the only increase.   Contracts are up significantly in Frederick and Prince George’s Counties, and these first tier suburban areas should continue to improve.
 

More Information at www.lor8s.com
Thomas Morgan
(202) 550-LOAN (5626)