HOUSING TRENDS, FACTORS, AND FORCES. By: Andy Carswell, University of Georgia Georgia Institute for Community Housing Tifton, GA February 26, 2008

Transcription

1 HOUSING TRENDS, FACTORS, AND FORCES By: Andy Carswell, University of Georgia Georgia Institute for Community Housing Tifton, GA February 26, 2008

2 Single-Family Housing Starts 1,900 (Thousands of Units, SAAR) 1,700 1,500 1,300 1, Source: NAHB 12

3 Multifamily Housing Starts 500 (Thousands of Units, SAAR) Source: NAHB 13

4 Housing Starts Per Capita CA, AZ, NV, FL All Other States MI, IN, OH Source: New York Federal Reserve, Economy.com, Mortgage Bankers Association of America

5 New Home Sales 1,400 (Thousands of units, Seasonally Adjusted) 1,300 1,200 1,100 1, Source: NAHB 11

6 Prime Conventional Conforming Home Mortgage Rates 12 Percent 10 Fixed-Rate Mortgages Adjustable Rate Mortgages Source: NAHB 10

7 Real GDP Forecast 4.5% 4.0% 3.5% 3.0% 3.8% 3.9% % Change 2.5% 2.0% 2.3% 2.4% 2.5% 2.6% 2.6% 2.6% 2.6% 2.6% 1.5% 1.5% 1.0% 0.5% 0.6% 0.0% 2007 Q Q Q Q Q Q Q Q Q Q Q Q4 Source: NAHB

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12 Unemployment Forecast 5.0% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% Unemployment Rate 4.8% 4.7% 4.6% 4.5% 4.5% 4.5% 4.6% 4.7% 4.8% 4.8% 4.4% 4.3% 2007 Q Q Q Q Q Q Q Q Q Q Q Q4 Source: NAHB

13 Vacant Year-Round Housing Units on the Market (000s) (Percent) No. of Units (left scale) % of Housing Stock (right scale)

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16 Georgia and Projected Household Growth Top 5 Counties Chattahoochee (+58%) Barrow (+32%) Newton (+31%) Paulding (+30%) Forsyth (+29%) Bottom 5 Counties Butts (-30%) DeKalb (-19%) Liberty (-18%) Taliafero (-13%) Ware (-13%)

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19 Percent of Defaults Due to Non-Owner Occupied Loans Prime Loans Percent of prime defaults due to non-owner occupied loans as of June 30, 2007 Share of prime home purchase loan originations for nonowner occupied properties in 2005, based on HMDA Nevada 32% 29% Arizona 26% 29% Florida 25% 32% California 21% 14% All other 13% 15% states Total US 16% 17% Subprime Loans Percent of subprime defaults due to non-owner occupied loans as of June 30, 2007 Share of subprime home purchase loan originations for nonowner occupied properties in 2005, based on HMDA Nevada 24% 14% Arizona 18% 14% Florida 14% 15% California 15% 7% All other 11% 10% states Total US 12% 10% Source: MBA, Home Mortgage Disclosure Act 2005 Report

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21 Mortgage Delinquency Data Source: Equifax/Moody s Economy. COM

22 Historical Data Patterns

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24 Industry and Market Determinants of Foreclosure LTV Ratios (+) House Price Appreciation (-) Sub-Prime Lender (+) Mortgage Type Non-FRM (+) Savings Rate (-) Servicing by Primary Lender (-) Interest Rates (+)

25 Human/Individual Factors Associated with Foreclosure Divorce (+) Health Care Exps. (+) Unemployment (+) Seasonal Nature of Job (+) # of Dependents (+) Non-Housing Wealth (-) FTHB Status (+) Gambling (+)

26 Pre-purchase Homeownership Counseling s Effects on Default and Foreclosure Positive effect overall as a risk mitigator Little in the way of followup procedures Questionable purchasing behavior of FTHB More vulnerable to predatory lenders after origination than before

27 Community Costs of Foreclosure Fire Risks Increasing Crime Administrative/Municip al Costs Property Value Effects

28 Foreclosure and Mortgage Fraud Fraud-for-property schemes vs. fraud-forprofit schemes Clustering effect Adverse community effects Difficulty in researching fraud effects on foreclosure

29 Mortgage Fraud Case Study

30 Concentration of Mortgage Fraud

31 So, Who s To Blame for the Affordability Problem? Land as a finite resource Government infatuated with homeownership Liberalized financing of mortgages Building codes Mortgage fraud Suburbanization Housing norms Inflexible nature of market rents Lack of availability of Section 8 Growth of subprimes The dominance of the stick-built market

32 Possible Solutions to Affordability Problem Solid, yet realistic, homeownership counseling programs Reducing the stigma of manufactured housing Reducing the influence of the sub-prime market Living wage campaigns Land trusts Housing trust funds

33 Other Housing Items Dominating My World Predatory lending and anti-fraud legislation Rise of gated communities Rise of New Urbanism Effects of foreclosure laws on bankruptcy behavior Housing (in)equality Appraisals, assessments, and proper valuation Residential property management Employer-assisted housing

34 Any Questions? Andrew T. Carswell, Ph.D. Assistant Professor Dept. of Housing & Consumer Economics University of Georgia 109 Dawson Hall Athens, GA Ph: (706) Fax: (706)