Mortgage Industry Trends

Will New Housing Starts Impact Home Prices?

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housing-starts-impact-home-prices-new-house-constructionAccording to Lynn Fisher, MBA’s Vice President of Research and Economics, new housing starts should increase about 10% in 2017 and just a bit less in 2018.

The effect should be to slow the rising prices for existing housing,  helping more consumers realize their American Dream.

The MBA forecasts that mortgage debt in the US will increase in 2018 to $10.1 trillion; up from the 2016 level of $9.7 trillion. This is primarily the result of increases in home purchase financing.

Rising mortgage rates will be offset by increased consumer employment and wage growth, spurred by a stronger economy. Let’s all hope so!

As a byproduct of the increasing rates, mortgage costs and home prices, we may see a return of the adjustable rate mortgage (remember them?) to assist homebuyers in their new purchases.

In addition, although refinancing may be down, home equity is greatly improved. Some existing homeowners may still choose to pull some of that equity to pay down existing high rate debt or finance overdue improvements.

So, all is not doom and gloom for lenders in 2017 and 2018. Opportunity exists with home purchase loans projected by the MBA to increase by about 10% year.  The MBA believes that higher rates and financing costs will not deter new home buyers, as long as they can find reasonable financing tools.

As always, good lenders will find the products and services needed to continue to finance the American Dream.

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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