{"id":4931,"date":"2017-06-12T00:00:00","date_gmt":"2017-06-12T00:00:00","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/12m-new-households-1m-fewer-homeowners\/"},"modified":"2017-06-12T00:00:00","modified_gmt":"2017-06-12T00:00:00","slug":"12m-new-households-1m-fewer-homeowners","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/12m-new-households-1m-fewer-homeowners\/","title":{"rendered":"12M New Households, 1M Fewer Homeowners"},"content":{"rendered":"

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NAR President William E. Brown, left, and UC-Berkeley economist Ken Rosen discussed solutions that will increase the homeownership rate and bolster the national economy.<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

What will it take to make homeownership a national priority? Despite the addition of about 11.8 million households between 2006 and 2016, there are roughly 1 million fewer homeowners today than a decade ago. Housing<\/a> economists and other experts discussed the primary causes behind the falling homeownership rates\u2014and potential solutions\u2014at the National Association of REALTORS\u00ae day-long Sustainable Homeownership Conference last Friday at the University of California, Berkeley. \u201cThe decline and stagnation in the homeownership rate is a trend that\u2019s pointing in the wrong direction, and must be reversed given the many benefits of homeownership to individuals, communities, and the nation\u2019s economy,\u201d says NAR President William E. Brown.<\/p>\n

Among the most vexing challenges is the so-called \u201cpost-foreclosure stress disorder,\u201d and it continues to have a significant impact on consumer\u2019s financial decision-making, according to Berkeley Hass Real Estate<\/a> Group Chair Ken Rosen. At the June 9 conference, Rosen shared research highlights from a white paper commissioned by NAR that explore five main barriers that are preventing people from buying homes.\u00a0<\/p>\n

The psychological effect of jobs and homes lost during the recession remains vivid for many Americans, especially young adults who experienced the hardships their families went through. While most Americans continue to have positive feelings about homeownership, Rosen said targeted programs addressing financial literacy and mortgage<\/a> financing<\/a> could help return-buyers and those who may have anxieties and other negative biases about owning.<\/p>\n

In encouraging news that coincided with the conference, Fannie Mae recently announced rule changes that should open lending to more potential buyers. Fannie Mae, the country\u2019s largest source of mortgage funds<\/a>, will ease its debt-to-income requirements as of July 29, increasing the DTI ceiling from the current 45 percent to 50 percent. The changes are a welcome sign for the real estate industry.<\/p>\n\n\n\n\n
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NAR Chief Economist Lawrence Yun, a speaker at the June 9 conference, says buyers should take heart at Fannie Mae’s announcement that it will soon relax debt-to-income ratios. NAR has encouraged changes to too-tight underwriting standards for responsible borrowers.<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u201cGiven the current historically low mortgage default rates from over-cautious lending standards, there is clear room to expand credit availability,\u201d says NAR Chief Economist Lawrence Yun, who also presented at the conference.<\/p>\n

Concerns that the easing of DTI standards could contribute to worrisome \u201cmarket bubble conditions\u201d such as those that preceded the 2008 housing collapse are unfounded, Yun says. \u201cThe current credit scores of borrowers whose loans<\/a> are approved are substantially higher than those from a decade ago,\u201d he says, adding that current underwriting standards remain much tighter than those of the pre-housing crisis era.<\/p>\n

Also, this spring Fannie Mae announced changes that will make it easier for buyers and homeowners with significant student debt to purchase their first home or do a cash-out refinance to retire those student loans.<\/p>\n

\u201cThe average buyer\u2019s credit profile has strengthened since the recession, but rising prices and limited supply have made it tough for everyone looking to purchase a home. We believe any responsible steps that can be taken to open the credit box, especially for young and first-time buyers, will help people enter the market,\u201d Brown says.<\/p>\n

Here are additional key findings from the white paper,\u00a0\u201cHurdles to Homeownership: Understanding the Barriers,\u201d discussed at the Berkeley conference:<\/p>\n