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  • Mortgage rates are on the rise and they're not showing

  • any signs of slowing down.

  • Mortgage rates have now risen up above 5% for the

  • first time in a long time, and home prices have also

  • been rising.

  • If you look at predictions of where mortgage rates may

  • be, say, two or three years from now, most people are

  • looking at interest rates to 7 to 7.5%.

  • A mortgage typically refers to a loan used to buy a

  • piece of real estate for which that property serves

  • as collateral. Today, 63% of homeowners in America are

  • paying off their mortgages, according to Zillow.

  • Every percentage increase in a mortgage rate

  • significantly increases the monthly payment, especially

  • for low and moderate-income families.

  • So there are good reasons in the broader economy for

  • raising rates, but this isn't good news for those

  • trying to purchase a home.

  • But experts say that high rates aren't the only issue

  • with mortgages that could hinder Americans from

  • achieving homeownership.

  • Our economy has totally transformed in the last 50

  • years, and mortgages have not.

  • If we update our system to better serve everyone in

  • America, it will profoundly advance us in having a more

  • equitable country.

  • How do mortgages make it more difficult to own a home

  • in the United States?

  • And can anything be done to solve it?

  • The price of a home often exceeds the amount of money

  • that most Americans save.

  • Mortgages exist to allow these individuals and

  • families to purchase a home with a small down payment

  • receiving a loan for the remaining balance.

  • But cost still remains a big issue.

  • We have an affordability crisis in the United States.

  • And I would say COVID actually revealed and

  • exacerbated an existing crisis, but it's only gotten

  • worse. So what we fundamentally have is a

  • supply problem, and that correlates with an

  • affordability challenge.

  • Americans today are forced to take larger loans to

  • finance a home.

  • The Federal Reserve Bank of Atlanta found that a

  • median-income household would need to spend 34.9% of

  • its yearly income on a median-priced home.

  • For reference, households that pay more than 30% of

  • their monthly income for housing are considered cost

  • burden, according to the Department of Housing and

  • Urban Development.

  • The cost factor is also why there is currently a large

  • percentage of renters wondering if they'll even

  • ever be able to move from renting to owning.

  • And even condos and townhouses are raising in

  • costs across cities for half a million dollars and

  • up, significantly raising the down payment amount in

  • mortgage loan debt.

  • Saving for a down payment is one of the biggest barriers

  • to homeownership.

  • The Center for Responsible Lending calculated that a

  • typical worker needs eight years to save for a 3% down

  • payment for a median-priced home and 30

  • years for 20%.

  • While certain programs like FHA loans allow homes to be

  • purchased with smaller down payments, being able to

  • afford a high down payment comes with its own set of

  • benefits.

  • If you come in with a lot of money down, it's easier to

  • qualify for a mortgage.

  • It's also less expensive to get a mortgage.

  • Something like 40% of families in America have no

  • financial margin. They couldn't even afford a $400

  • medical bill or challenge.

  • So the idea of being able to save a 20% down payment

  • is almost unimaginable.

  • And again, it goes back to the fact worse than ever

  • right now is that food costs are going up, and

  • energy costs are going up.

  • Rents are skyrocketing so much faster than incomes

  • right now. All of those get in the way of families being

  • able to save for a down payment.

  • A number of state and local institutions also offer

  • what's known as down payment assistance programs

  • to combat this issue.

  • There is not nearly, though, enough money for those down

  • payment programs.

  • The other problem has been that the programs are not

  • standardized and it makes it harder for lenders to use

  • them and more reluctant to use them.

  • And it also makes it harder for people to know about

  • them and how they qualify for them.

  • Congress was considering a big package of downpayment

  • assistance for first-generation homebuyers

  • as part of the debate over Build Back Better last year,

  • but the Senate failed to enact the bill.

  • So that's, you know, we're still hoping that might be

  • revived.

  • Another prominent issue is the lack of small-dollar

  • mortgages or loans issued for less than $100,000.

  • Having smaller mortgages is important because by

  • definition those are going to be affordable for a

  • family on a more modest income.

  • For first-time homeowners, a lot of these small-dollar

  • mortgages are available for affordable, low-cost

  • properties in urban, suburban, or rural

  • communities.

  • And the issue has been getting worse.

  • The total value of mortgage loans between $10,000 and

  • $70,000 and between $70,000 and $150,000 dropped by over

  • 53% and over 21% respectively from 2011 to

  • 2021. Meanwhile, values for loans exceeding $150,000

  • rose by a staggering 240% plus in the same period.

  • It is particularly hard for people who are buying

  • smaller houses with smaller mortgages to find a lender

  • and to get that mortgage.

  • And they also, surprisingly, are more

  • expensive.

  • Another study found that denial rates for

  • small-dollar loans were notably higher than denial

  • rates for larger loans.

  • And it's not because these loans are riskier.

  • Accompanying research found that applicants for

  • small-dollar loans had similar credit profiles to

  • applicants for larger loans.

  • The real reason is profit.

  • It costs about the same amount of money to take an

  • application and run it through your system and fund

  • a mortgage and have it appraised and do all those

  • things regardless of how big the mortgage is.

  • So if it costs me the same amount of money to do a

  • $700,000 mortgage as it does to do a $70,000

  • mortgage, but I get all my fees and my interest based

  • on the loan amount. So I'm going to get a lot less

  • revenue on a $70,000 mortgage than I am on a

  • $700,000 mortgage.

  • The lack of small-dollar mortgages then drives these

  • affordable homes into the hands of retail investors

  • looking for profit.

  • Small-dollar homes that could represent the first

  • step on the path to homeownership for a family

  • of modest income are not being sold with mortgages,

  • which means they're probably being bought for

  • cash. That means somebody with deep pockets is able to

  • come in and offer to pay cash.

  • They often buy the homes through automated systems

  • where they buy them without even seeing the house.

  • They get an automated appraisal, a remote

  • inspection, and buy houses in bulk, and that's pulling

  • a lot of houses out of what's already an overly

  • scarce, affordable housing market for these smaller,

  • less costly houses.

  • So a lot of harm coming out of the difficulty of people

  • being able to access small-dollar mortgages.

  • In response, homebuyers may resort to dubious methods to

  • purchase a property.

  • One example that is surprisingly prevalent is

  • people end up into something they call Contract

  • for Deeds, where it's essentially you're renting,

  • and if you make every payment on the loan on time,

  • you eventually will own the house.

  • But if you miss any payment, you not only lose

  • the house, you have no equity in it either.

  • And there are millions of these transactions out there

  • in the country today.

  • And it's because people don't have the alternative.

  • They're being pushed into those mortgages.

  • On top of everything, it's generally become more

  • difficult to qualify for a mortgage.

  • The Housing Credit Availability Index, which

  • represents the lender's tolerance for risk, has

  • remained almost at the same level since the aftermath of

  • the 2008 financial crisis.

  • In response to the great foreclosure crisis, lenders

  • and investors got very tight about their

  • underwriting criteria and have kept them at this sort

  • of reactive level since then.

  • The deck is particularly stacked against borrowers

  • with low credit scores.

  • As millions of homeowners went into mortgage

  • forbearance programs at the start of the pandemic, banks

  • raised their borrowing standards for protection.

  • During the fourth quarter of 2021, less than a quarter

  • of new mortgages originated to borrowers with credit

  • scores under 720.

  • An important part of the unfairness and the impact of

  • that is credit scores reflect, to a great extent

  • how much family and personal wealth you have.

  • If you're a wealthy person, it is not difficult to get a

  • mortgage, but if you have less wealth and a lower

  • credit score, it's really challenging right now.

  • And despite the many regulations designed to

  • prevent lending discrimination, racial bias

  • is still prevalent in the mortgage industry.

  • According to the most recent data from the Home

  • Mortgage Disclosure Act, denial rates for home

  • purchase applications were 18.1% for black applicants

  • and 12.5% for Hispanic white applicants, compared

  • to just 6.9% for non-Hispanic white

  • applicants and 9.7% for Asian applicants.

  • Lenders can look up additional debts of a

  • potential homebuyer, including that of medical

  • debt and student loan debt relative to the loans that

  • are in default, which can limit opportunities for less

  • established potential homebuyers.

  • Expecting communities that have not historically had

  • the privilege of financial liberties to be financially

  • secure when making one of those important purchases of

  • their lifetime is like expecting an athlete with no

  • training or coaching to win a national championship

  • title. It's just unrealistic and it's indeed

  • a stretch and has certainly added to the difficulty of

  • home buying in the U.S.

  • The easiest way to solve today's mortgage market is

  • resolving the supply of housing in America.

  • If we don't increase the supply of starter homes,

  • first-time homes, and homes that are accessible for

  • working families with low and moderate incomes, then

  • it's going to be really hard to solve it just from a

  • lending perspective.

  • We've got to have more housing. If you just provide

  • more credit, it drives up housing prices even more

  • without expanding the supply.

  • Another important aspect is having a mortgage market

  • that supports the needs of all Americans.

  • If we have more supply, we also should work on down

  • payment assistance and we think we're going to need

  • more subsidy there, and financial counseling and

  • preparation to help families clean up their

  • credit and be well prepared to be able to obtain loans.

  • Several measures can also be taken to overcome some of

  • the systemic barriers that prevent certain subgroups

  • from achieving homeownership.

  • Our mortgage system just has to work for today's economy

  • and people who are doing the right thing scrambling

  • to put together a living, saving as much money as they

  • can. But those are just tougher in this new economy.

  • And our mortgage system has to serve those people who

  • are playing by the rules and not getting a chance to

  • get ahead.

  • If we want to overcome some of the systemic barriers to

  • homeownership for households of color, we

  • really want to recognize that and think really hard

  • about unpacking those systemic barriers and doing

  • something to address them directly, like looking for

  • alternative ways to assess credit, looking for ways to

  • count income from gig economy jobs, and second and

  • third jobs and seasonal jobs, and from other

  • household members who are contributing and looking for

  • ways to help people with down payment assistance to

  • establish that collateral.

  • Continuing to question and improve the mortgage system

  • in the United States is key to preserving the ideals of

  • the American dream.

  • Our mortgage system is one of the main factors that

  • decide who has a stable financial life, who has a

  • secure place to live, and who builds financial wealth.

  • And it needs to serve all of America and it's not

  • doing that. And so unless there are very deliberate,

  • significant interventions and changes in our system,

  • we're going to look back in 20 years and find that we're

  • even in a worse place than we were in 2022.

Mortgage rates are on the rise and they're not showing

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モーゲージ市場の崩壊(Why The U.S. Mortgage Market Is Broken)

  • 10 1
    moge0072008 に公開 2022 年 05 月 27 日
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