On November 1, CoreLogic collaborated with the Urban Institute to present our fifth annual housing symposium, titled Housing Finance, Affordability and Supply in the Digital Age, and hosted at the Center for Strategic and International Studies in Washington, D.C. This daylong symposium explored housing policy changes, the economic outlook for the U.S. housing market, opportunities for reaching emerging markets, affordability challenges in the residential housing supply, and the impact of technology and digital advances on housing finance.
The day began with Sarah Rosen Wartell, president of the Urban Institute, moderating a conversation between the head of single-family rental at Fannie Mae, Andrew Bon Salle, and his counterpart at Freddie Mac, Dave Lowman. They discussed innovations in loan origination and servicing processes, with a particular focus on their newly introduced origination technologies: Fannie Mae’s Day 1 Certainty program and Freddie Mac’s appraisal-free mortgage program, ACE. Moving forward, both agreed that the industry needs to bring these types of technological advancements into the servicing market as well.
The attendees then heard from CoreLogic Chief Economist Frank Nothaft, who provided his outlook on the housing and mortgage markets for the remainder of 2017 and beyond. He focused on the effects that higher mortgage rates are projected to have on the market, including a decrease in both affordability and owner mobility, coupled with a decrease in the share of single-family refinances compared to purchase originations and home equity line of credit (HELOC) lending. (Figure Two)
After the lunch hour, the audience was addressed by this year’s keynote speaker, Mark Calabria, Chief Economist to Vice President Mike Pence, who shared his thoughts on the appropriate role of government in the housing market. He noted that the Trump administration is committed to ending the government’s conservatorship of Fannie Mae and Freddie Mac before turning them over to the next administration, focusing particularly on the dwindling capital buffers at the two government-sponsored enterprises, which are set to hit zero on January 1. Calabria also discussed the current push for tax reform, the reauthorization of the National Flood Insurance Program and its importance to housing reform, as well as the effects of False Claims Act litigation on the Federal Housing Administration’s single-family guarantee program.
One of our two afternoon panels featured CoreLogic Deputy Chief Economist Sam Khater, who participated in a conversation on supply-side affordability challenges, touching on issues that included land use, zoning and permitting regulations, and labor force participation within the construction industry. Sam used current CoreLogic data to demonstrate how tightening inventory has pushed up home prices, especially for low-end and entry-level homes. (Figure Three)
If you were unable to attend the symposium in person or watch the livestream online, a recording of the event is available on the Urban Institute’s website, as well as a copy of the event agenda, speaker biographies, and speaker presentations.