There was a lot to digest this week, and I’m not just talking about the half-size “Super Sub” President Obama ordered in Edison, New Jersey as part of his tour supporting a small business plan.
Food for thought in our industry came in the form of mortgage-to-income ratios at the lowest in more than 30 years, making home affordability better now than it was in the 70’s. And yet, the US home ownership rate fell to 67.1 percent in the first quarter, the lowest in more than 10 years.
Fannie Mae Chief Executive Michael J. Williams describes a “new realism” in housing in which much stricter lending standards will mean a smaller share of people are able to become homeowners. I do hope the economy improves, credit scores improve and home ownership extends to a greater percentage of people.
It may be hard for sellers to swallow, but real estate agents sometimes have to suggest a listing price that is disappointing. When faced with such a difficult conversation, point out that 30% of the houses for sale nationally reduced their price. And economists predict home value will continue to decrease for the rest of the year. Providing experienced, non-biased perspective is one way we can add great value.
In the coming weeks, it will be interesting to watch Fannie and its sibling Freddie as the government has big plans to overhaul the agencies into nothing like their current form, according to Treasury Secretary Tim Geithner. More to come after a conference on housing reform planned for next month convenes. What would you like to see in the overhaul?