Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk with more coverage to come on bigger issues.
A quick wrap in Bloomberg from Katia Dmitrieva shows U.S. household debt jumped in the fourth quarter.
Citing a report from the Federal Reserve, the piece states that the pace of household debt accumulation during the quarter reflects a 7.8% annualized rise in consumer credit, along with a 3% gain in mortgage borrowing.
“Such activity helped fuel a 3.8% rise in consumer spending in the period, the fastest in more than a year,” the reporter writes.
Considering that mortgage borrowing is on the upswing, Congress is apparently standing behind mortgages, and even giving them a push… albeit a teeny, tiny push.
Sarah O’Brien reports in this CNBC report that mortgage lending from a community bank or credit union could become easier, under a provision included in a banking regulatory bill under consideration in the Senate.
“The Senate bill now under consideration (S. 2155) would let those smaller banks and credit unions still qualify for those legal protections without meeting all of the requirements that typically go with underwriting qualified mortgages,” O’Brien writes.
However, even if passed, the legislation is unlikely to lead to a meaningful jump in mortgage lending from said institutions.
“The lender also would be required to keep the mortgage in its own portfolio instead of selling it to investors. That would mean the risk remains with the bank,” O’Brien writes.
The idea is that the loans are safer with 100% risk retention, which actually has no basis of proof anywhere in the current mortgage market. But, I guess it’s a start.
Congressional efforts to better the mortgage market aside, the city of Miami is looking at proposals to fix its affordable housing crisis.
Every idea is being considered, apparently. And Jerry Iannelli, is even sifting through, pulling out the worst ideas, and publishing them in the Miami New Times.
He goes into more detail, but here they are in no particular order:
1. Letting people live in/on top of parking garages
2. Building homes out of shipping containers
3. Cramming the poor into tiny homes
4. Putting them into dorm rooms
5. Asking developers to lose money on affordable housing out of the kindness of their hearts
It would be nice to see some of the good ideas, but these points are pretty awful, especially no. 5.
“The state hasn't helped either. Legislators have looted more than $1 billion from Florida's affordable-housing fund over the last decade and refuse to raise the minimum wage to a livable level,” Iannelli writes.
Everyone needs to check out this blog by Mark Fleming, chief economist of First American Financial Corporation and published in Business Insider.
It’s titled: "Here's what faster inflation and rising mortgage rates mean for housing"
Basically we’re in an environment of both and so far, it’s not having a huge impact, but that may change. “The fate of consumer house-buying power in 2018 will depend on the tug-of-war between rising household income and inflation-driven pressure on mortgage rates,” Fleming writes.
And when will Millennials begin to start getting into buying houses? Everyone wants to know, and it’s generating some funny results.
One is this satirical article that is titled: “Report: Most popular kink among Millennials is role-playing as a couple that owns a house”
It is seems like maybe it isn’t a joke, but be assured it is: “A published study out of Simon Fraser University on generational sexuality has found that the most popular sexual kink among Millennials is roleplaying as a couple that owns a house,” the article states.
“While older generations have often used role-play as a way to simulate various power dynamics or unlikely encounters, Millennials are using the popular kink to indulge their own implausible fantasies, both sexually and monetarily.”
And while that is a joke, the below attempt (h/t: RiverBoogie) to woo potential homebuyers below is bound to work on Millennials: