July 10, 2015

In Case You Missed It: A Look at Recent National Housing Policy News

Budget Brinkmanship Grips DC

Republicans and Democrats are locked in an increasingly bitter debate over government spending, with few legislative weeks remaining to avoid another shutdown this fall.  Bolstered by veto threats from President Obama, Senate Democrats are vowing to block all GOP spending bills, arguing the legislative work is pointless until Republicans come to the negotiating table.   “Republicans’ current appropriations strategy is only driving our nation toward another government shutdown,” House Democratic leaders said in a letter sent last month.  Republicans, meanwhile, have slammed Democrats as using obstructionist tactics, labeling their strategy the “filibuster summer.”  Democrats need to “pull their party back from a senseless path of forcing endless filibusters and a shutdown no one wants but the hard left,” Senate Majority Leader Mitch McConnell (R-Ky.) said in a floor speech.  The debate is certain to heat up when lawmakers return from the July 4th recess, with no guarantee that lawmakers can find a way to avoid the second shutdown of the federal government in two years.

HouseCanary: Shifting demographics reshaping housing, mortgage finance

Problems and opportunities presented for investors

A new study from HouseCanary shows how demographics shifts are reshaping demand for residential real estate. “The vast imbalances in wealth and homeownership among Baby Boomers (age 55+) and Millennials (ages <35) are resulting in wide disparities in the demand for home buying versus renting,” according to J.P. Ackerman, President at HouseCanary. “Our analysis indicates that rising interest rates and home prices will exacerbate the situation as the Millennials’ ability to purchase homes will be severely jeopardized as monthly payments get further out of reach.”   Boomers have historically fueled the housing market as they entered each stage of life. They drove growth in the entry-level market during the 1970s and 1980s, the move-up market in the 1990s and 2000s, and will fuel household growth over the next 20 years due significant wealth and high homeownership rates.

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