Priscilla Almodovar, the CEO of Fannie Mae (OTC: FNMA) has looked at the housing market and said she never saw anything like it.
In an interview with MarketWatch, pointed to home prices that are still at historic highs.
“It’s a highly unaffordable market right now,” she said. “We are monitoring and following all these trends, things that we’ve never seen before. You have home prices the highest we’ve seen in two decades.”
Almodovar predicted it was unlikely for mortgage rates of the pre-pandemic era, adding the 3% rate seen during the pandemic is something that “we probably will never see that again in our lifetime.”
Almodovar said that while an increase in housing supply is overdue, there were too many obstacles at local levels to creating new supply.
“It’s zoning. It’s not-in-my-backyard NIMBY-ism,” Almodovar said. “The No. 1 issue is the local. That’s where decisions really get made.”
For the time being, Almodovar acknowledged housing remains “one of the most important domestic policy issues that we have to tackle.”
guess all we can look forward to is a crashing housing market, allow for foreclosures to move forward at the pace they need to, discourage and or forbid short-term rental airbnbs. get the black rocks and black stones out of single family home speculation. after these remedies maybe we’ll start living happily ever after.
I have a solution to this housing affordability problem. We all know how many condos there are. The inventory of Condos is a an all-time high. Prices of Condos are generally 30%-50% higher than single family however most first-time home buyers are priced out of the condo markets due to the down payment requirements, anywhere from 10%-25% down for non-conforming and non-warrantable condos. If FNMA eases, their condo underwriting guidelines we will be able to get more first-time home buyers into condos which are more affordable than single family homes. I have been in the real estate industry for more than 40 years and I agree with you that we have a HUGE affordability problem in housing.
There are contradictions in these comments. Please correct
IMO it’s the HOA dues as the main reason the condo market is struggling. Rising insurance costs are affecting the middle, lower class and our most vulnerable population.
You are correct!
There will not be a housing crash unless we have very high unemployment. So you can buy now while you can still afford that stretched payment, or wait until the prices go even higher. And if you are waiting for interest rates to go down, then be careful, because when they do, the prices will be bid up even higher from competing buyers.
DROP THE PRICES. On everything
According to Powell, he stated that interest rates will drop throughout to end of next year. It is vital to get rates lower to accommodate future loan modifications and refinancing.
The builders control housing market and pricing, so perhaps set guidelines for new home pricing to have a temp yearly price caps? This may help keep resale housing pricing lower than new home pricing. Jobs are key to a strong market. Things should be leveling out without a crash!
There is no affordability crisis! The market determines prices. There is no excess of inventory so everyone who wants to sell can. If the prices are too high houses won’t sell driving down prices. We created an artificial market with the millions of illegals taking more units than were able to be produced. We shut down supply lines in a botched attempt at covid and are still paying for that fiasco plus building slowed because of it creating even more of a shortage. If government can stay out of the crisis they created it will solve itself
Where is the data to support your comment on illegals taking the units from the rest of the population. Let’s se the fact straight. Price of lumber and raw materials, plus insurance costs and property taxes had raised the price on construction – a short of skilled laborers( illegals building) are placed into the equation. In Texas, those illegals human beings are the one picking up the crops so the entire Nation can eat their fresh vegetables – also they ( those horrible illegal as I interpret your comment) are the ones on the roof at over 100 degree weather repairing and building homes that they cannot afford., the ones doing the Sheetrock and paving the streets…….The unaffordable situation on properties is set by the price of land, the local conditions on permitting and zoning, insurance premiums that very few can afford and large down payments. In Houston, the pushing for rental affordable buildings is taking a toll on small Landlords that cannot fairly compete with the corporations entering the Real Estate Landlord market. The solution to me is to increase the access for condominium loans, and implement down payment programs that are easy to maneuver without so much red tape.
Thank you Elena, for helping Mr. Morton understand its not the illegals. They are not paid enough to come up with the down payment.