Each year at the Legislative Meetings in Washington DC, Lawrence Yun, Chief Economist for the National Association of REALTORS® delivers a Housing and Economic Outlook. Below you will find the highlights of the session as well as information delivered by Senator Elizabeth Warren about the impact student loans are having on the housing industry.
- We are recovering despite having a slow recovery.
- A strong surge in pending sales shows good signs of a late spring and summer hot selling season.
- There is a major income gap between qualifying income and actual income in regards to mortgage lending.
- We could still operate a stable real estate market with a 6% mortgage interest rate, but anything over and above 6% could be turbulent
- Vacation home sales experienced a lull in 2007 – 2013 but recently saw a spike in 2014 and 2015
- New home sales and new home starts still very sluggish – nowhere back to normal
- Rents rising at a 7 year high.
- Low gas prices will not cover inflation alone – if mortgage interest rates have to cover inflation interest rates will upswing as a result.
- Lower interest rates = Low inflation and steady mortgage rates.
- High interest rates = High inflation and high mortgage rates.
- Residents from San Francisco and surrounding counties are flocking to Seattle, Portland, Boise, Austin, Salt Lake City, Denver and Raleigh. Low cost and jobs!
- 8 million jobs were lost during the downturn of the economy but 14 million jobs have been gained during the recovery.
- Some countries considering negative interest rates – U.S. needs to be aware as this could drastically change our banking and mortgage landscape as we know it today.
- Mortgage delinquency rates are falling, including VA loans (100% financed).
- 95% of veterans use a realtor when buying or selling a home.
- We are experiencing rising house wealth – real estate values increasing but mortgage debt not increasing at the same speed.
- Homeownership at a 50 year low.
- Student Loans impact on housing – 5 year delay in purchasing
- Forecast Interest Rate for 2017: 4.6% = BUY NOW!
Senator Elizabeth Warren graced the stage immediately following Lawrence Yun’s delivery. The facts below indicate why she’s passionate on bringing her student loan bill back to life and hopefully seeing it passing soon.
- 7 out of 10 college students had to obtain student loans to attend and successfully graduate from college.
- The student loans on the books today = 1.3 trillion dollars to the US government
- The lack of the ability to refinance student loans at a future date is weighing down young families and impacting local economies .
- Student loans will make the US Government 66 billion dollars for student loans issued between 2007 – 2012.
She ended her short speech by saying “degrees push us forward, but debt holds us back.” You’ll likely see loads of discussion circling around the student loan bill in the coming months. The bill will help college become more affordable and will hopefully allow those who have student loans the ability to refinance at lower interest rates. If you see any threads on this topic especially from the National Association of REALTORS® you’ll want to take notice and educate those in your local areas.