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

What to Expect in the Housing Market in 2017

After a relatively calm real estate market in 2016, we can expect some changes to come in 2017, but it is unlikely there will be any tumultuous upheaval in the next year. We have seen inventory come back at a steady pace, and buyer demand is strong enough that it will continue to keep the market moving as we go through the next 12 months. Here are some specifics of what we can expect in 2017: The rate rise is sudden relative to the slow pace of any changes over the past several years. We saw this occur immediately after the election results, with continued increases the week following. So far mortgage rates have gone up about 40 basis points, and now that the Federal Reserve has announced its increase to interest rates, we can expect that mortgage rates will continue to rise. While it is possible that the days on market could return to that low level in 2017, it is unlikely given the recent trend of an increase in new listings. Even though rates are on the increase, credit is not as hard to come by as it was just after the recession, and the Federal Housing Finance Agency has announced it will increase lending limits for 2017. Federal Housing Administration loan limits are also expected to increase slightly, from $271,050 to $275,665. Lenders are bringing a number of new mortgage programs to the table that call for a modest down payment and don’t require the buyers to purchase an FHA loan. The final piece of the financing puzzle is the influx of smaller banks and non-bank lending institutions that have gotten into the lending game.

'Flex Mod' to Replace HAMP at Fannie and Freddie

The Flex Modification "strikes the appropriate balance between borrower relief and economic responsibility," said David Lowman, executive vice president of Freddie Mac's single-family business. Fannie Mae and Freddie Mac will replace the expiring Home Affordable Mortgage Program with a new loss mitigation option called the Flex Modification. The new program is expected to provide a 20% payment reduction for eligible borrowers, the government-sponsored enterprises said Wednesday. Fannie and Freddie said that "a high percentage" of borrowers who are at least 60 days delinquent on their mortgages would be eligible; in certain cases, those who are less than 60 days delinquent or even current on their loans could also qualify.

Boosting Homeownership Among Minorities

Minority home mortgages increased more than white home mortgages between 2013 and 2015 in several metros across the U.S., according to a recent report from Urban Institute. The report is quick to add that this increase was not without a “virtual roller coaster” of sorts starting with a homebuying surge during the housing boom and a large decrease during the housing crisis, before the increase beginning in the recovery.