Morning Briefing: Renters want to buy but supply, mortgages are concerns

by Steve Randall16 Mar 2016
Renters want to buy but supply, mortgages are concerns
It seems that there is no shortage of renters who want to follow the American Dream and become homeowners but a lack of housing supply and difficulty getting a mortgage are standing in their way.

The latest instalment of the National Association of Realtors’ quarterly consumer survey reveals that three quarters of current renters would buy in the next 6 months if they could with 79 per cent opting to live outside urban areas.

While there has been a decline in the optimism of renters that now is a good time to buy (62 per cent now compared to 68 per cent in December 2015) it is not due to lack of will. Tight inventory, particularly of their preferred single-family homes; together with concern over getting a mortgage and high home prices, are creating significant barriers for renters.

Homeowners are more confident about buying now (82 per cent) as saving for an ever-increasing downpayment is not an issue: “A high number of homeowners are expressing that it’s a good time to buy and this sentiment is no doubt being fueled by the $4.4 trillion in housing equity accumulation in the past three years,” says Yun. “On the other hand, accelerating home prices and the perceived difficulty in obtaining a mortgage appears to be tugging at the confidence of renters.”
Builder confidence remains high
Builders are confident in the market for single-family homes according to the latest data from the National Association of Home Builders. Its Housing Market Index in association with mortgage lender Wells Fargo, shows a score of 58 for March, unchanged from February.

“While builder sentiment has been relatively flat for the last few months, the March HMI reading correlates with NAHB’s forecast of a steady firming of the single-family sector in 2016,” said NAHB Chief Economist David Crowe. “Solid job growth, low mortgage rates and improving mortgage availability will help keep the housing market on a gradual upward trajectory in the coming months.”

The industry is still under pressure in many areas though due to a lack of both available lots and labor.
Mortgage insurer boosts online apps
Applying for mortgage insurance online has been made easier due to a partnership between Genworth Mortgage Insurance and digital platform experts Roostify.

The unique partnership allows loan officers to complete the application for mortgage insurance in around 20 minutes and also serves as a networking tool, allowing for interaction among loan officers, real estate agents, underwriters, and consumers all in one digital hub.  

“The mortgage origination space is really just starting to benefit from technology advancements and Genworth is laser-focused on staying ahead of the technological curve,” said Kevin McMahon, SVP Strategy & Business Intelligence, Genworth Mortgage Insurance.

The system can be used on a mobile device and a white-label solution allows mortgage lenders to customize it with their own branding.



Is TILA-RESPA a good or bad thing long term?