Now that the election is over — you did know we had one of those, right? — depending on who you listen to we’re either in for a nightmare of Biblical proportions, or we’re going to see the dawn of a new utopia of peace and prosperity. (Although Nate Silver would probably tell us there’s a 92.4 percent chance it will be somewhere in the middle.)
But now that we have at least
four three two more years before the robo-calls start, it’s time to look at what we’ll be looking at.
US News & World Report has a nice overview of “5 Housing Issues Hanging in the Balance Going Into Obama’s 2nd Term.” A brief summary:
1. More refinancing efforts, especially the “Responsible Homeowner Refinancing Act” (endorsed by NAR, btw), which would expand the existing HARP refinancing by eliminating loan-to-value limits, reducing fees and costs, and ‘encouraging’ second-lien holders to get with the program.
2. Regulatory certainty. Regulatory uncertainly has been held up for a while as a big issue for businesses — they don’t know what to expect. Well, they can expect that to change: Love or hate QM, QRM, Dodd-Frank, etc., they’ll be certain soon enough. (And I suspect that, like with every other law, rule, or regulation, lenders will deal with them with aplomb.)
3. The mortgage interest deduction. Expect to hear plenty about this. With the “fiscal cliff” approaching and deep cuts on the horizon, you can bet the MID — at least in part — will be brought up in discussions. Primary residence only? A cap? That’s not to say it will change, or that suggestions for change will even gain traction, just that you should expect to hear about it.
4. Principal reduction. Will Fannie and Freddie finally consider principal forgiveness? FHFA acting director Ed DeMarco has been vehemently against it, and President Obama seems likely to keep him on the job, even while disagreeing with him. So… who knows? (For sure we’ll here tons of arguments pro and con.)
5. GSE reform. The consensus seems to be that a government-run safety net is fine, but that Fannie and Freddie need to get out of the wholesale secondary mortgage market business. (Today they own 90-something percent of it.) Then again, they’re both turning a profit and repaying their bailout funds….
OK, that covers what US News thinks are the biggest issues. Now here are a couple that we’ll be watching:
1. The foreclosure pipeline. One of the best indicators of recovery is what percentage of homes sales are distressed property. Right now, it’s pretty high — but dropping. So we’ll be keeping an eye on Virginia’s numbers as we track the housing comeback.
2. Rental pricing. These days it’s up, up, up — in many cases, it costs more to rent than to buy, thanks to increased housing demand (think foreclosures). Investors have snatched up properties, not to flip but to rent. And with credit hard to come buy, demand for them is up and supply is low… and we know what that means. But will it stay that way?
And, of course, all the usual things: prices, building, transportation, and more.
Let’s be about it, then, shall we?