A look at stories across HousingWire’s weekend desk, with more coverage to come on bigger issues:
As they witness a steady flow of new and existing households in and out of the ownership market, housing analysts at Bank of America (BAC) say the nation’s homeownership rate will decline further.
The rate will eventually fall to about 63% and remain there, they say, pulled down by the continued flow of foreclosures. Some 34.6% of families rented their home in the first quarter, up from 34% at the end of 2011.
The national homeownership rate stood at 65.4% in the first quarter, falling 1% from a year earlier and 0.6% from the previous quarter, according to the U.S. Census Bureau.
“If we assume that the 2.2 million homeowners in foreclosure become renters immediately, the homeownership rate falls to 63.5%,” BofA analysts say. “Adding the additional 1.5 million homeowners that are seriously delinquent brings the homeownership rate to 62%.”
In fact, surveys show that the majority of Americans still aspire to be homeowners. Fannie Mae’s National Housing Survey finds that nearly 85% of respondents believe that owning is preferable to renting in the long run and 64% of current renters plan to buy in the future.
However, fewer people believe it is a good investment: 63% consider it a “safe” investment, down from 83% in 2003.
“Housing has become more of a consumption good than a short-term investment vehicle, which is a healthy change, in our view,” analysts say.
Stay in the know this week with HousingWire’s onsite coverage of the Mortgage Banker’s Association’s National Secondary conference in New York. We’ll get the scoop on hot-button topics such as representation and warranties; qualified mortgage loans; and mortgage servicing rights, among other issues.
Several hearings and legislative action related to housing and financial reform is in store this week. House Budget Committee Chairman Paul Ryan, R-Wis., will push forward Monday with legislation to replace $78 billion of 2013’s $109 billion in automatic deficit reduction with trims to, among other programs, the Dodd-Frank Act.
On Tuesday, the Senate Banking Committee will examine expanding mortgage refinancing with Housing and Urban Development Secretary Shaun Donovan.
That same day, a House Financial Services subcommittee headed by Rep. Ron Paul, R-Texas, will discuss a slew of legislative proposals that would reform, or eliminate, the Federal Reserve. Paul, a longtime Fed critic, plans to push his own bill abolishing the central bank, but a range of proposed Fed tweaks from across the political spectrum will also be up for discussion.
Sens. Robert Menendez, D-N.J., and Barbara Boxer, D-Calif., outlined proposed changes to the Home Affordable Refinance Program to provide streamlined financing for homeowners who are current on their payments and have loans through Fannie Mae and Freddie Mac. During an April 25 hearing, Menendez chided the Federal Housing Finance Agency for failing to move at a faster pace to open up refinancing to more borrowers.
Fed Chairman Ben Bernanke will deliver remarks Thursday on the state of bank lending.
Treasury Secretary Timothy Geithner spoke in Beijing, China, over the weekend at the close of the Fourth Strategic and Economic Dialogue.
He met with China’s top officials to discuss creating a more modern financial system in which the market rather than the state plays a central role in the allocation of investment as well as implementing the next generation of China’s economic reforms.
Geithner noted that China is moving to liberalize controls on the international use of its currency and on capital movements into and out of the country.
Regulators shut down one bank over the weekend, raising the 2012 total to 23. It is the third bank this year to fail in Florida.
North Lauderdale, Fla.-based Security Bank was closed. The Federal Deposit Insurance Corp. entered into a purchase and assumption agreement with Coral Gables, Fla.-based Banesco USA to assume all of Security bank’s total assets of $101 million and total deposits of $99.1 million.
The FDIC estimates the closing to cost its deposit insurance fund $10.8 million.