{"id":6926,"date":"2014-09-18T13:16:28","date_gmt":"2014-09-18T13:16:28","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?p=6926"},"modified":"2014-09-18T13:16:28","modified_gmt":"2014-09-18T13:16:28","slug":"whats-necessary-bring-back-first-time-buyers","status":"publish","type":"post","link":"http:\/\/www.anthonydidonato.net\/wordpress\/whats-necessary-bring-back-first-time-buyers\/","title":{"rendered":"What\u2019s Necessary to Bring Back First-Time Buyers…"},"content":{"rendered":"

What\u2019s Necessary to Bring Back First-Time Buyers…<\/h2>\n
\"What\u2019s<\/a>

What\u2019s Necessary to Bring Back First-Time Buyers… Image courtesy of imagerymajestic \/ FreeDigitalPhotos.net<\/p><\/div>\n

The Federal Housing Administration\u2019s rise in its mortgage insurance fees in recent years is pricing many \u201ccreditworthy Americans out of the market\u201d and causing the number of first-time home buyers to reach new lows, housing analysts argue.<\/p>\n

First-time home purchases have fallen to historic lows. They account for about 28 percent of existing-home sales year-to-date \u2013 well below the long-term benchmark of 40 percent, according to the National Association of REALTORS\u00ae.<\/p>\n

The 24- to 35-year-old cohort \u2013 which usually makes up the largest share of first-time buyers \u2013 has been faced with high levels of student debt and stricter underwriting standards that have made it more difficult for them to apply for a mortgage. But in an op-ed piece in American Banker<\/em>, Richard A. Smith, CEO and president of Realogy Holdings Corp., also notes that the \u201cbiggest and most surprising challenge faced by today\u2019s aspiring home owners come from the FHA, the very agency created to help them.\u201d<\/p>\n

The agency has more than doubled its mortgage insurance fees since 2010, as it tries to cover a wealth of defaults that the agency faced in the aftermath of the financial crisis.<\/p>\n

\u201cThis was a necessary step,\u201d notes Smith, who also serves on the housing commission of the Bipartisan Policy Center and the policy advisory board of the Harvard Joint Center for Housing Studies. \u201cHowever, premiums are still at crisis levels years later. For many would-be home owners, it’s just too much.\u201d<\/p>\n

Monthly premiums for FHA-insured mortgage totaled 0.55 percent of the loan amount in 2010. But today, it has bloomed to 1.35 percent \u2013 a 145 percent increase, amounting to an additional $120 on a monthly mortgage payment for a $180,000 loan. The up-front fee that borrowers are required to pay the FHA also has risen, increasing from 1 percent of the loan amount to 1.75 percent.<\/p>\n

The FHA\u2019s higher mortgage premiums have pushed 1.5 million renters over a sustainable debt-to-income level to qualify for a home loan in 2013, according to National Association of REALTORS\u00ae\u2019 research.<\/p>\n

As such, the FHA\u2019s lending has fallen sharply too. This year, the FHA will likely assist about 450,000 first-time home buyers, down about 33 percent from its historical averages. From 2009 to 2013, the FHA assisted about 690,000 first-time buyers annually. What\u2019s more, the FHA traditionally supported the purchase of nearly 100,000 condos annually. However, in the past 12 months, the agency has supported only 17,000 condo purchases.<\/p>\n

In the op-ed piece, Smith urges the FHA to adjust its policies and reduce its monthly premiums to pre-crisis levels. He also says the FHA should consider enabling borrowers to finance their mortgage insurance over the life of the loan, which would allow the FHA to \u201cimprove affordability for consumers without eliminating revenue.\u201d He also notes the alternative that the FHA could eliminate the requirement that buyers pay for mortgage insurance over the entire life of their loan and allow borrowers to drop it when they reach 20 percent equity, as is done in the conforming loan market.<\/p>\n

\u201cA new approach to lending policy will be necessary if the U.S. economy is to benefit from a resurgence in first-time home purchases,\u201d Smith says.<\/p>\n

Source: \u201cFHA Fees Are Holding Back First-Time Homebuyers<\/a>,\u201d American Banker (Sept. 16, 2014)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

What\u2019s Necessary to Bring Back First-Time Buyers… The Federal Housing Administration\u2019s rise in its mortgage insurance fees in recent years is pricing many \u201ccreditworthy Americans out of the market\u201d and causing the number of first-time home buyers to reach new lows, housing analysts argue. First-time home purchases have fallen to historic lows. They account for … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,8],"tags":[5,32,4,9],"class_list":["post-6926","post","type-post","status-publish","format-standard","hentry","category-news","category-real-estate-tips","tag-anthony-didonato","tag-news","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"\nWhat\u2019s Necessary to Bring Back First-Time Buyers... - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.anthonydidonato.net\/wordpress\/whats-necessary-bring-back-first-time-buyers\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#article\",\"isPartOf\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"What\u2019s Necessary to Bring Back First-Time Buyers…\",\"datePublished\":\"2014-09-18T13:16:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/\"},\"wordCount\":556,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"image\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2014\\\/09\\\/ID-10085914.jpg\",\"keywords\":[\"Anthony DiDonato\",\"News\",\"Real Estate\",\"tips\"],\"articleSection\":[\"News\",\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/\",\"name\":\"What\u2019s Necessary to Bring Back First-Time Buyers... - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania\",\"isPartOf\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#primaryimage\"},\"image\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2014\\\/09\\\/ID-10085914.jpg\",\"datePublished\":\"2014-09-18T13:16:28+00:00\",\"breadcrumb\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/whats-necessary-bring-back-first-time-buyers\\\/#primaryimage\",\"url\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2014\\\/09\\\/ID-10085914.jpg\",\"contentUrl\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/wp-content\\\/uploads\\\/2014\\\/09\\\/ID-10085914.jpg\",\"width\":266,\"height\":400,\"caption\":\"What\u2019s Necessary to Bring Back First-Time Buyers... 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