December 15, 2015

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

New House bill would end 'FICO monopoly' at Fannie Mae, Freddie Mac

Bipartisan bill pushes Fannie, Freddie to look at alternative credit scores
A bill introduced in the House of Representatives would allow Fannie Mae and Freddie Mac to consider alternative credit-scoring models beyond the FICO credit score the government-sponsored enterprises currently use when determining what loans to purchase.  The bill, which is entitled the “Credit Score Competition Act of 2015,” was introduced Thursday by Rep. Ed Royce, R-CA., and Rep. Terri Sewell, D-AL.  According to a joint release from Royce and Sewell, the bill would enable Fannie and Freddie to consider other credit-scoring models, which would level the playing field for borrowers whose credit doesn’t meet FICO’s standards and make it easier for them to buy a home.

Record Number of Renter Households Face Severe Affordability Problems, As Rents Grow Faster Than Incomes and Increased Supply Fails to Meet Demand

Harvard’s Joint Center for Housing Studies Releases Biennial Rental Housing Report
Multifamily housing construction has accelerated to its fastest pace in nearly 30 years but has still not been sufficient to meet surging demand.  Rental vacancy rates are now at their lowest point since 1985 and inflation-adjusted rents are rising 3.5 percent annually.  With renter incomes stagnant, last year was another record-setting year in the number of renters paying more than 30 percent of their income on housing costs, according to the 2015 report on rental housing released today from the Harvard Joint Center for Housing Studies at the Newseum in Washington, D.C. While lower-income households are most likely to experience these cost burdens, the report finds that rental cost burdens increasingly afflict even moderate-income renters earning as much as $45,000 per year.

Pew: Middle Class Losing Ground

A new Pew Research Center analysis said after more than four decades of serving as the nation's economic majority, the American middle class is now matched in number by those in the economic tiers above and below it.  The analysis, The American Middle Class is Losing Ground (, authored by Rakesh Kochhar, associate director of research, and Richard Fry, senior researcher, said the percentage of American adults in middle-income households fell to less than 50 percent in 2015, compared to 61 percent in 1971.  The report said in early 2015, 120.8 million adults were in middle-income households, compared to 121.3 million in lower- and upper-income households combined, a demographic shift that Kochlar and Fry said could signal a tipping point.  "The hollowing of the American middle class has proceeded steadily for more than four decades," the report said. "Since 1971, each decade has ended with a smaller share of adults living in middle-income households than at the beginning of the decade."

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