Teresa Bryce Bazemore is president of Radian Guaranty Inc., Radian Group Inc.’s principal mortgage insurance subsidiary. As president, Bazemore is responsible for all domestic and international mortgage insurance business operations.
Almost a decade after the housing crisis, many responsible potential homeowners remain locked out of the market. But recently there have been a pair of hopeful developments that may be key to opening doors to homeownership for qualified first-time and underserved buyers. Fannie Mae and Freddie Mac have unboxed two long-anticipated initiatives designed to make credit more available to deserving potential buyers without compromising standards. Importantly, these are not politically driven affordable lending programs.
Many people want to own a home of their own, but it does not seem within their reach. Equipped with the proper information and support, the possibility of responsible and sustainable homeownership is not as remote as it may seem.
Millennials will continue to enter the housing market in growing numbers in the coming years, and those who work in housing need to recognize and embrace the most important ways the Millennial generation differs from previous generations of homebuyers. Their diversity is at the top of the list.
Build to rent allows investors to buy newly built homes and rent them out instead of selling them. Because the homes are new, investors are able to charge higher rent prices and tenants often stay in the home for longer periods of time. But the question remains: Why would builders move into the rental market during a time when homes are selling quickly and at higher prices than any time in the past decade?
Today the average student debt resulting from a four-year degree stands at $30,000. According to a report released by American Student Assistance in 2015, 71% of non-homeowners surveyed who carry student debt say the burden of monthly payments has kept them from purchasing a home. More than half of those say their student debt loads will likely prevent home ownership for another five years.
Currently, institutional investors control approximately 170,000 properties (a relatively small portion of the overall SFR space, which is dominated by smaller investors, and estimated to include 11 to 13 million properties). KBRA reports that 105,000 properties have been included in the 26 single-borrower deals done to date, which suggests there are somewhere north of 60,000 properties that could still be securitized.