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A Symposium on Housing Finance Overview

Data, Demand and Demographics

Stuart Quinn    |    Housing Policy

On November 20, 2015, CoreLogic and the Urban Institute Housing Finance Policy Center hosted the third annual Data, Demand and Demographics: A Symposium on Housing Finance. There were a number of notable panels and keynotes, including presentations on consumer wellness, housing (both rental and ownership), demographics and the state of the single-family mortgage system. The chairman of the White House Council of Economic Advisors, Jason Furman, kicked off the event and spoke about the effect of land use and zoning restrictions on the dynamics of construction, supply and demand of housing and affordability.  

Below are key takeaways from each of the panels, and the full day’s proceedings can be watched on CSPAN 2.

Panel One: Consumer Financial Health and Well-Being

  • A survey from the Center for Financial Services Innovation (CFSI) revealed that 57 percent of participants indicated they were not in a financially healthy situation (being able to pay bills, make credit card payments, reserves or saving set asides), while the other 43 percent said they were healthy.
  • More renter respondents (77 percent) reported they were not in a financially healthy situation than owners (48 percent), though monthly payment as a percent of income was more indicative of financial health than ownership or renting.
  • Intra-year income variability has and will continue to have a huge impact on the future of mortgage repayment in the coming years. CFSI found there were 5 dips and spikes on average, per year.

Panel Two: Housing, Urbanization & Demographics

  • As of 2012, flat wages and rising rents have led to nearly half of all renters paying more than 30 percent of their income to housing costs. This disproportionally impacts Black and Hispanic households with monthly housing burdens of 58 percent and 55 percent, respectively, contributing over 30 percent of their income to rent.  
  • The recent emphasis on the construction of luxury apartments continues to drive a wider gap between a renter’s median income and the cost of renting. Further, nearly two million affordable rental units are at risk of falling out of the housing stock (Low Income Housing Tax Credit, Project-Based Assistance, etc.).
  • There continues to be an imbalance between the cost of building and the levels of affordability for those at 60 to 100 percent of area-median-income levels.
  • The demographic composition of future households will continue to be more diverse than what we have seen historically.

Panel Three: Single-Family Financing and Credit Accessibility: Is the Status Quo Alright?

  • By FHFA standards, the credit box is at an adequate level from the perspective of where Fannie Mae and Freddie Mac would be willing to accept the borrower terms, but there are still overlays that continue to constrain access.
  • As a country, we must determine the acceptable tolerance of mortgage defaults that we are comfortable with, given the impact on accessibility of credit. By historical standards, defaults are extraordinarily low, and we need to consider what this means in terms of access to credit.
  • There were concerns that the remaining constraints on credit can be linked to enforcement, interpretation and the appropriateness of remedies under legal action. Some of the legal requirements are overly prescriptive, some are too ambiguous and others are simply inconsistent.

Materials online:

Event Recordings:

Faith Schwartz also contributed to this article.

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