PATH Act at the center of controversy
The House Financial Services Committee held a hearing last week regarding the Protecting American Taxpayers and Homeowners (PATH) Act discussion draft, introduced by Chairman Hensarling (R-TX) which seeks to reform housing by reforming the Federal Housing Administration (FHA) and other Government Sponsored Enterprises (GSEs) as well as reforming the Dodd-Frank Act. Gary Thomas, President of the National Association of Realtors (NAR) and Jerry Howard, CEO of the National Association of Home Builders (NAHB) testified before the committee today, asking for substantial changes to the PATH Act.
NAR says they oppose the legislation as currently drafted not only because they “strongly oppose the end of federal guarantee for a secondary mortgage market,” but because they also “strongly oppose the dramatic restructuring and targeting of FHA.”
“NAHB believes federal support is particularly important to ensure that 30-year, fixed-rate mortgages, the bedrock of the nation’s housing finance system since the 1930s, remain available at reasonable interest rates and terms,” said Howard. “As currently drafted, the PATH Act does not provide the federal support necessary to ensure a strong and liquid housing finance system, and we urge the committee to make the necessary changes.”
Thomas testified that the PATH Act would wind down Fannie Mae and Freddie Mac over a five year period and create a new Utility to promote the securitization of mortgages but fails to provide for a federal guarantee for the Utility. NAR also notes that the draft alters the current FHA program including income targeting, downpayment increases, and loan limit decreases which they oppose “without a federal guarantee and a removal of the FHA Title.”
The NAHB CEO agreed, urging lawmakers to modify changes to the FHA. “The PATH Act would drastically diminish FHA’s vital liquidity mission,” said Howard. “By simultaneously leaving all federal support for housing to FHA, and then by greatly reducing the overall scope and reach of FHA’s programs, the PATH Act would greatly limit homeownership and rental housing opportunities for many financially responsible and qualified Americans.”
Not all of the bill is opposed
In a statement, the NAHB noted, “There are some positive elements in the PATH Act, and NAHB agrees that private capital must be the dominant source of mortgage credit, Howard said. However, ensuring the safety and stability of the housing finance system cannot be left entirely to the private sector.”
Similarly, the NAR stated, “The bill does include some positive changes including language to fix the definition of fees and points in the ability to repay/qualified mortgage (QM) regulation so that consumers have more options when choosing a lender, and language related to mortgages seized under eminent domain.”
According to Thomas’ statement before the Committee, NAR supports six key provisions of the bill: covered bonds, 3 percent cap for Affiliate Fees, regulatory relief, Basel III, manufactured housing protections, and the Common Sense Economic Recovery Act.
Next steps for the PATH Act
NAR notes that the draft is moving quickly and the Committee intends to mark up the bill this weeks. NAR submitted a written statement for the hearing, opposing the discussion draft and states they will continue to work with the Committee and Congress to oppose this legislation.
NAHB has recommended to the committee that Fannie Mae and Freddie Mac be gradually phased into a private sector oriented system, where the federal government’s role is explicit but its exposure is limited. Federal support would be limited to catastrophic situations where carefully calibrated levels of private capital and insurance reserves would be depleted before any public funds were employed to shore up the mortgage market.
Because there is currently a great deal of uncertainty among consumers and home builders due to the unresolved debate on reforming the housing finance system and the government sponsored enterprises, Howard urged the committee to move forward in a careful, prudent manner to provide needed assurance for the industry and consumers.
“At a time when housing is just starting to get back on its feet and provide job and economic growth, we don’t want to do anything that would reverse this positive momentum,” he said. “It’s definitely important that Congress be mindful of housing’s important role in the economy going forward.”
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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