Friday, October 24, 2014
PLACERVILLE, CALIFORNIA
99 CENTS

Opportunities abound in housing market but challenges remain

By
From page HS6 | May 31, 2013 |

Subscription Required

Thank you for reading the MtDemocrat.com digital edition. In order to continue reading this story please choose one of the following options.

Current Subscribers
If you are a current subscriber and wish to obtain access to MtDemocrat.com, please select the Subscriber Verification option below. If you already have a login, please select "Login" at the lower right corner of this box.

Subscriber Verification

Special Introductory Offer
For a short time we will be offering a discount to those who call us in order to obtain access to MtDemocrat.com and start your print subscription. Our customer support team will be standing by Monday through Friday, 8am to 5pm to assist you.

Call and Save! (530) 344-5000

If you are not a current subscriber and wish not to take advantage of our special introductory offer, please select the $12 monthly option below to obtain access to MtDemocrat.com and start your online subscription

Help?

WASHINGTON, D.C. — The shape of homeownership and housing markets has changed dramatically over time and will continue to change in the face of new housing opportunities and challenges. That’s according to panelists at the “Challenges and Opportunities in Housing and Homeownership” session during the Realtors 2013 Midyear Legislative Meetings & Trade Expo.

During the session, academics from DePaul University, George Mason University, University of North Carolina and the University of Maryland presented various research and data illustrating the impact of shifting demographics, new mobility patterns and an uncertain interest rate environment on future housing prices, availability and affordability. Funding for some of the research was provided by the Realtor University Center for Real Estate Studies.

“The residential mobility rate in the U.S. has been falling steadily since the 1990s, when it was approximately 20 percent, to its current level of 12 percent,” said National Association of Realtors Chief Economist Lawrence Yun. “The decline is unwelcome news since it may imply a reduction in economic mobility. Mobility is currently being impacted by the lack of housing inventory since fewer homes are available. In the future, proposed regulations requiring larger down payments could also significantly reduce mobility since fewer homeowners may be able to afford a home.”

Lisa Sturtevant from George Mason University’s Center for Regional Analysis said recent trends in residential mobility are most likely the result of changes in the age distribution of the population. She said the two largest segments of the population — baby boomers and millennials — are delaying many major lifecycle events that have been traditional for their respective life stages, like marriage, children and retirement. That also means they are not moving as much as members of previous generations at the same life stages, which could be dragging down the overall residential mobility rate.

“Homeownership rates have declined fastest for millennials, most likely the result of fewer job opportunities and higher student debt; however, I believe they still want to become owners and will eventually make their way into the housing market,” said Sturtevant. “When they do enter the market they’ll care about different things than previous generations too; I foresee more single people buying smaller homes in urban areas.”

Yun agreed that the recent housing downturn hasn’t change younger buyers’ attitudes about homeownership, despite many of them delaying their entrance into the market. “Rather, reduced home prices and lower interest rates have provided an opportunity for younger buyers to affordably enter the housing market,” he said.

James D. Shilling from DePaul University’s Institute for Housing Studies shared his insights into recent trends in household mobility and its future impact on the single-family housing market.

“Higher home prices will unlock a large number of households with negative or low equity and incentivize them to get off the sidelines and into the housing market. However, combined with future increases in interest rates, the net effect is likely an overall reduction in residential real estate transactions and household mobility,” said Shilling.

He anticipates the Federal Reserve will keep mortgage rates low through 2013 and most likely into 2014; consequently the majority of current homeowners will have mortgages with loans rates near record lows, and when rates start to rise they will not be incentivized to give up those low-rate loans to buy a new home with a higher rate mortgage.

Lucy Gorham from the Center for Community Capital at the University of North Carolina offered her perspective into housing policy implications for homeowners, including proposed regulations requiring higher down payments from home buyers. She said while restrictive underwriting helps lower loan defaults, it disenfranchises a higher percentage of creditworthy borrowers; if 20 percent down payments were required, as many as 60 percent of current buyers could be outside of the qualified mortgage criteria and potentially face higher interest rates or fees.

“Despite the recent housing crisis, homeownership continues to help build wealth for lower to middle-income households. A safe mortgage product with good underwriting helps lower loan defaults; requiring greater down payments simply closes off access to a greater percentage of borrowers,” said Gorham.

Imposing higher down payment requirements would negatively affect low- and moderate-income households and disproportionately impact minority homebuyers, she said. Gorham said minority families tend to have lower wealth and greater need for access to mainstream sustainable loan products, and that more will need to be done to meet their credit requirements since minority families are expected to be the greatest source of future housing demand.

Margaret McFarland, Colvin Institute of Real Estate Development at the University of Maryland, agreed that excessive risk reductions requiring higher down payments and credit scores exclude too many well performing loans from the market.

“Federal Housing Administration loans are an important financing option for affordable homeownership,” she said. “Veterans Affairs home loans also perform very well in relation to other mortgage products, even with a zero down payment.”

Comments

comments

.

News

Winkler convicted of first-degree murder

By Cole Mayer | From Page: A1 | Gallery

 
Closing arguments present new possible story in Winkler case

By Cole Mayer | From Page: A1 | Gallery

Kinkade’s hometown gallery closing

By Wendy Schultz | From Page: A1 | Gallery

 
EID: Water saving gets personal

By Michael Raffety | From Page: A1

Camino shooting suspect sketched

By Cole Mayer | From Page: A1

 
 
 
Purple petition qualifies for 2016 ballot

By Dawn Hodson | From Page: A6

Round and round … and round

By Wendy Schultz | From Page: A7

 
Water rights pursuit on the bubble

By Chris Daley | From Page: A12

.

Opinion

No to Prop. 47

By Mountain Democrat | From Page: A4

 
My turn: Hangtown Ball = economic development

By Mike Roberts | From Page: A4

 
.

Letters

Yes on N? Why?

By Letters to the Editor | From Page: A5

 
Placerville can’t afford Measure K

By Letters to the Editor | From Page: A5

What’s best for Cameron Park

By Letters to the Editor | From Page: A5

 
I am voting yes on Measure M

By Letters to the Editor | From Page: A5

4th District supervisor election

By Letters to the Editor | From Page: A5

 
Technical education and EHUSD board candidates

By Letters to the Editor | From Page: A5

.

Sports

El Dorado teams sweep SVC crowns

By Mike Bush | From Page: A9

 
Cougars split with McClatchy

By Jerry Heinzer | From Page: A9

Area produces two girl’s champions

By Jerry Heinzer | From Page: A9

 
Bruin boys clinch share of title

By Mike Bush | From Page: A9 | Gallery

Cougars face ‘Unique’ test

By Mike Bush | From Page: A9

 
Roundup: Oct. 22, 2014

By Democrat Staff | From Page: A10

.

Prospecting

Hangtown Halloween Ball hits its stride

By Mike Roberts | From Page: B1 | Gallery

 
Tahoe ‘Barton baby’ keeps the dream alive

By Mike Roberts | From Page: B2

Craven keeps Hangtown Ball bouncing

By Mike Roberts | From Page: B2

 
Hangtown Ball details

By Mike Roberts | From Page: B2 | Gallery

Things to do: Oct. 24, 2014

By Democrat Calendar | From Page: B2

 
Metal Dragonfly lands at Green Acres

By Green Acres Farmers Market | From Page: B4

Creepy time at Sutter’s Fort

By Sutter's Fort | From Page: B4

 
Free safety and self defense class

By Robinson's Taekwando | From Page: B6

Paint a glass at Sierra Vista

By Sierra Vista Winery | From Page: B6

 
Time to enter contests

By Green Acres Farmers Market | From Page: B6

Ride the ‘Spookomotive’ trains in Sac

By California State Railroad Museum | From Page: B7

 
Harvest Festival is fun for all

By Gold Oak Elementary School | From Page: B13

Androcles and the Lion comes to Harris Center

By Harris Center for the Arts | From Page: B13

 
Dedication for Pearl Place Art Wall

By News Release | From Page: B13

.

Essentials

Correction

By Democrat Staff | From Page: A2

 
Lake levels 10-23-14

By Michael Raffety | From Page: A2

Crime Log: Oct. 13-14

By Cole Mayer | From Page: A2

 
.

Obituaries

Robert Raiman “Bob” Koestoer

By Contributor | From Page: A2

 
Eleanor Martin

By Contributor | From Page: A2

Donna Lee Owings Gray

By Contributor | From Page: A2

 
Joan McKain

By Contributor | From Page: A2

.

Real Estate

Design team promotes ‘gilt by association’

By Marni Jameson | From Page: HS3

 
Existing home sales rebound in September

Press Release | From Page: HS4

‘Mister Mc Lister’ joins Vindler

Press Release | From Page: HS6

 
Estate-sized Jacksonville both stately and sunny

Press Release | From Page: HS10

CAR convenes state’s first real estate summit

Press Release | From Page: HS14

 
.

Comics

Shoe

By Contributor | From Page: A11

 
Sudoku

By Contributor | From Page: A11

Rubes

By Contributor | From Page: A11

 
Long Story Short

By Contributor | From Page: A11

TV Listings

By Contributor | From Page: A11

 
Speed Bump

By Contributor | From Page: A11

Tundra

By Contributor | From Page: A11

 
Horoscope, Sunday, October 26, 2014

By Contributor | From Page: A12

Horoscope, Saturday, October 25, 2014

By Contributor | From Page: A12

 
Horoscope, Friday, October 24, 2014

By Contributor | From Page: A12

New York Times Crossword

By Contributor | From Page: A12

 
.

Home Source

Design team promotes ‘gilt by association’

By Marni Jameson | From Page: HS3

Existing home sales rebound in September

Press Release | From Page: HS4

‘Mister Mc Lister’ joins Vindler

Press Release | From Page: HS6

Estate-sized Jacksonville both stately and sunny

Press Release | From Page: HS10

CAR convenes state’s first real estate summit

Press Release | From Page: HS14