What to expect at HousingWire’s Spring Summit

The focus of the Summit is The Year-Round Purchase Market. Record low rates led to a banner year for mortgage lenders in 2020, and this year is expected to be just as incredible.

Increasing lending and servicing capacity – regardless of rates

Business process outsourcing and digital transformation are proven solutions that more companies in the mortgage industry are turning to. Download this white paper for more.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.

Mortgage

First American: Home prices point to trouble ahead

Data reveals Americans need income growth

Home prices have climbed 15.3% year over year, signaling affordability concerns lie ahead, according to First American’s Real House Price Index.

Notably, the average household income has increased 2.9% since September 2017 and 53% since January 2000.

First American Chief Economist Mark Fleming said the importance of household income growth’s ability to mitigate the loss of affordability from a rising mortgage rate is clear.

“Without stronger household income growth, rising mortgage rates will continue to impede consumer house-buying power, reducing affordability,” Fleming said.

According to First American’s data, from August 2018 to September 2018 real house prices rose 2%. However, consumer buying power fell 0.9% between this time period, and declined 6.7% year over year.

When consumer house-buying power is a factored in, home prices are actually 37% below their 2006 peak and 11% below prices in January 2000.

“The jump in mortgage rates reduced house-buying power by $36,000 since September 2017,” Fleming continued. “Over the same period, household income growth increased consumer house-buying power by $10,000.”

“The net effect? Overall consumer house-buying power fell by $26,000 in September compared with a year ago,” Fleming said. “At the moment, rising mortgage rates are winning the buying power tug-of-war with rising household incomes – the pace of household income growth is not sufficient to fully offset the change in mortgage rates.”

In September, the five markets with the highest year-over-year growth in the RHPI were Cleveland (28.2%), Las Vegas (26.6%), Cincinnati (23.8%), Atlanta (23.4%) and Orlando (22.6%).

“At first glance, these markets don’t seem to have much in common. Upon closer inspection, however, all five markets had household income growth below the national average of 2.9%,” Fleming said. “Orlando uniquely experienced a decline in household income of 0.4% compared with a year ago.”

Fleming said as the age-old adage goes, housing is all about location, location, location. Affordability is no different.

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