Weekly update from the National Housing Conference |
|
In this issue
October 16, 2022
Issue 91-37
· Black Homeownership Collaborative urges changes in FHA Mortgage Insurance Premiums
· HUD releases guide for increasing housing supply
· Agencies increase the threshold for smaller-loan exemption
· HUD awards research grants for reducing health hazards, makes millions available for Choice Neighborhoods
· Enterprise launches Renter Wealth Creation Fund
· Chart of the week: New York Fed finds 30 percent of renters see some chance of impending eviction
|
|
High housing costs continue to drive inflation numbers
by David M. Dworkin, President and CEO of the National Housing Conference and Bill McBride, Author, Calculated Risk Blog
This week, the Bureau of Labor Statistics announced inflation numbers for September 2022, and they were not encouraging. The Consumer Price Index (CPI) fell 0.10 points to an annualized rate of 8.2 percent, largely as a result of lower fuel prices. However, the much more important core inflation number, which does not include volatile energy and food markets, rose 0.16 points. With gas prices rising again, the near-term outlook isn’t encouraging for controlling inflation without more significant action by the Federal Reserve—and more housing supply to address rising rents.
This rise means we are likely to see higher interest rates on home mortgages, higher rents, and less available credit for home construction. At the beginning of the year, rates on a 30-year fixed-rate mortgage of 7 percent seemed pessimistic. Today, we are already seeing rates at that level, and they will likely go even higher before year-end.
High rents were the biggest driver of inflation this month. But there is a silver lining. The October 2022 Apartment List National Rent Report said the national index for rents fell by 0.2 percent over September, the first time this year that the national median rent declined month-over-month. Part of this drop is seasonal, part is due to pandemic disruptions in household formation beginning to settle down, and part is due to the impact of higher rents on mobility. more...
|
|
News from Washington | By Luke Villalobos
|
|
Black Homeownership Collaborative urges changes in FHA Mortgage Insurance Premiums
The Black Homeownership Collaborative sent a letter to Housing and Urban Development Secretary Marcia Fudge on Wednesday urging HUD to “meaningfully reduce the annual Mortgage Insurance Premium (MIP) and suspend the life of loan requirement for borrowers with Federal Housing Administration (FHA) insured loans.”
The letter notes that "since the start of the pandemic, the cost of buying a home has skyrocketed as home prices continue to rise and interest rates have doubled. Less than three years ago, a salary of $64,400 per year was sufficient to purchase a median-priced home of $329,000 with a 3.31 percent interest rate. Today, between much higher home prices and double the interest rate on a 30-year fixed-rate loan, a salary of more than $120,000 is necessary to purchase that very same home. Reducing the MIP would help to reduce the cost of purchasing a home, and ending the life-of-loan requirement would help contribute to wealth building through homeownership, particularly for Black homeowners.
Last month, the Mortgage Bankers Association, Manufactured Housing Institute, National Association of Home Builders, and National Association of REALTORS®, sent a letter to Brian Deese of the National Economic Council requesting the MIP be cut. |
|
 |
HUD releases guide for increasing housing supply
HUD released a guide for using community planning and development programs to increase the supply of affordable housing through its Community Planning and Development (CPD) funds. The guide outlines various financing tools, commonly used sources for production, creative affordable housing models, and project profiles using CPD funding. As a toolkit, it aims to provide some basic information for state and local governments looking to invest more in affordable housing through Community Development Block Grants, Home Investment Partnerships, the Housing Trust Fund, and Section 108 Loan Guarantees. |
|
|
|
Agencies increase the threshold for smaller-loan exemption
On Thursday, the Consumer Financial Protection Bureau, the Federal Reserve Board of Governors, and the Office of the Comptroller of the Currency issued a joint announcement that the 2023 threshold for exempting loans from special appraisal requirements for high-priced mortgages will increase. The threshold will increase to $31,000 from $28,500 effective Jan. 1. The requirement came from the Dodd-Frank Wall Street Reform and Consumer Protection Act and added a special appraisal for higher-priced mortgage loans. Thresholds are based on increases to the Consumer Price Index for Urban Wage Earners and Clerical Workers. |
|
|
|
|
HUD awards research grants for reducing health hazards, makes millions available for Choice Neighborhoods
HUD awarded $5.7 million in research grants to seven universities and public health organizations to gather the long-term impact of housing interventions addressing residential hazards. These studies will help identify key residential hazards and develop new and existing housing designed to eliminate existing dangers for high-risk communities. A summary of the awardees of HUD’s Lead and Healthy Homes Technical Studies Grant program can be found here.
Last week, HUD also announced $379 million in Choice Neighborhoods Implementation (CNI) Grants dedicated to neighborhood revitalization strategies of public and assisted housing units. This budget is $150 million higher than FY21 funding and sets a historical record since the launch of CNI in 2010. This program targets “Housing, People, and Neighborhood” for redevelopment of distressed properties, economic development, and neighborhood improvement. Since the beginning of the CNI program, $1.3 million in funds has seen 10,000 new mixed-income units built across 44 cities, and more than 32,000 units are in planning. A study conducted by Case Western Reserve University on the Chicago Choice Neighborhood showed HUD’s investment generated $400 million in public and private investments. Additionally, the study found a positive correlation in these neighborhoods between CNI investment and increases in median household incomes and homeownership rates as well as a decrease in crime rates. Applications for grants are due by Jan. 11, 2023. |
|
|
|
|
Enterprise launches Rental Wealth Creation Fund
Enterprise Community Partners announced it’s launching a new Renter Wealth Creation Fund under its affiliate, Enterprise Community Investment (Enterprise), that aims to provide wealth-building opportunities for renters similar to homeownership. The program will offer cash-back payments to renters on participating affordable housing properties who make their monthly rent payments on time, along with resident services and shared appreciation of profits if the property is refinanced or sold. Enterprise has a goal of raising $250 million to fund the program.
“The Renter Wealth Creation Fund is a direct response to what renters have told us they want: more cash in hand today, and the opportunity to achieve upward mobility over the long term,” president of Enterprise’s Capital Division Lori Chatman said. “With their feedback, we created a financial innovation that offers returns to investors, loyalty and stability to property owners and—for the first time—real wealth-building potential for renters.”
|
|
|
|
New York Fed finds 30 percent of renters see some chance of impending eviction
The Federal Reserve Bank of New York published a blog post recently analyzing its Survey of Consumer Expectations (SCE) Housing Survey data to explore how renters perceive their housing risk. The analysis found 69.8 percent of survey respondents reported a zero chance of being evicted by Feb. 2023, meaning one-third do see some possibility of eviction.
Being the first time the New York Fed asked renters about their eviction expectations, the Bank doesn’t have historical data to compare. However, the New York Fed has respondents’ history of eviction experiences, and previous eviction experience does drive eviction expectations. “Respondents who know someone who was evicted since 2006 perceive their own chance of eviction as being 2.5 percentage points higher than other respondents, holding other differences across respondents equal,” the blog post reads. “Even more striking, those who have experienced an eviction themselves see their chance of eviction over the next year as 13 percentage points higher, again irrespective of how their housing affordability evolves.”
The Bank’s SCE Housing Survey also discovered expectations for rent increases are well above historical norms. “These expectations are highest in areas where rent is below the median, and among households with lower incomes,” the post reads.
|
|
An article in MReport discusses Gen Z’s interest in manufactured housing as a viable option for homeownership. A Vanderbilt Mortgage and Finance survey shows three-quarters of Gen Z’s surveyed had a positive impression of off-site built housing; the affordable price of manufactured homes was a major factor in their shift of perspectives.
The Terner Center for Housing Innovation at UC Berkeley published a new report titled Building Local Institutional Capacity: Lessons Learned from the Emergency Rental Assistance Program. The report closely examines the distribution of Emergency Rental Assistance funds based on the capacity of administrators and partners during the rollout and further provides reflections on individual program experiences.
A podcast episode by The New York Times’ The Daily reports on the affordable housing crisis in California and the rise of the single-family home. The episode provides a look into the building boom during the 1940s and 1950s and the subsequent rise of NIMBYism as single-family homes and neighborhoods reflected the ideal American life. It tells the story of a single property as it is transformed over the decades as housing policy tries to keep up with supply demands.
JPMorgan Chase announced it is committing $15 million to five organizations to scale innovative climate-resilient affordable housing models. The funding will help improve housing, particularly for people of color across the five cities of Southern California; Rio Grande Valley, Texas; Buffalo, New York; Washington, D.C.; and Miami, Florida.
|
|
Monday, October 17
Tuesday, October 18
Wednesday, October 19
Thursday, October 20
Friday, October 21
|
|
The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest. |
|
Defending Our American Home since 1931 |
|
Copyright © 2022. All Rights Reserved. |
|
|
|
|
|
|
