The Voice for Real Estate 21: Home Sales Surge

The spring selling season gets off to a sunny start in March with the sale pace reaching an 18-month high. Also, NAR President Chris Polychron urges the Senate Banking Committee to take action on overly tight mortgage credit. Other stories: Hard-hit buyers are returning to the market seven years after the downturn and the Rural Housing Service joins NAR to talk about the advantages of Sec. 502 direct loans for households that otherwise wouldn't be able to get mortgage financing.

Featured segments:

  • March existing-home sales hit 18-month high - 0:24
  • NAR testifies before Congress on credit access - 1:34
  • Hard-hit buyers return after the downturn - 2:26 
  • Sec. 502 direct loans can help low-income rural buyers - 4:16

Get more on all the topics covered in this video:

Voice for Real Estate 21: Transcript

Home Sales Surge

Stephen Gasque voice over: 

Existing Home Sales surge, as the spring market gets underway
NAR tells Congress, make credit rules fair
And - a second chance for people who lost their homes during the economic
downturn
These stories and more on The Voice for Real Estate
Hi, I’m Stephen Gasque with the National Association of Realtors.
Some great news for the nation's housing markets - Existing Home Sales rose
more than 6% in March! NAR’s latest data shows the numbers are up year-overyear
for the sixth consecutive month. NAR's chief economist Lawrence Yun
explains why.
[QUOTE]
Later this week NAR will be releasing its pending home sales index, which
indicates future sales levels, and we’re expecting good news as warmer weather
draws out more buyers
[SWOOSH]
NAR President Chris Polychron was in Washington last week, telling lawmakers
that credit remains out of reach for millions of creditworthy households.
[QUOTE]
Testifying before the Senate Banking Committee, Polychron said credit scoring
criteria should be updated - to include utility payments, and rent payments, so
that young and minority households can establish a solid track record of on-time
payments. That would open the door for more people to buy homes.
[QUOTE]
Polychron also called on Congress to extend mortgage debt tax forgiveness. That
law allows people who lose their homes to foreclosure, or in a short sale, to move
on . . . without facing a huge tax hit on the amount of money their lender lost.
That's called phantom income, and Polychron told lawmakers that cash-strapped
families shouldn’t have to bear that federal tax burden.
[SWOOSH]
Did you know more than 9 million households lost their home during the Great
Recession? Well, it’s been seven years since the downturn hit, and already more
than a million of those people are homeowners once again.
That finding is based on research NAR released last week. Another 1.5 million
households are expected to buy again in the next five years. That’s the good
news.
The bad news is, for millions more, the road back to home ownership will be
difficult unless lenders pull back on their overly cautious credit practices and
return to the traditional standards they used prior to the housing bubble. And as
we said just a moment ago, credit scoring companies Ð and lenders Ð need to
reflect the way financially responsible households use credit today. NARÕs Ken
Fears has more.
[QUOTE]
FICO, Vantage Score, and others in the credit scoring business are already making
changes to their ratings processes, and at a credit summit NAR hosted earlier this
month, the companies said more changes are coming. But - before those changes
have an impact in the housing market, they'll have to be adopted by Fannie Mae,
Freddie Mac, FHA, and the nation's lenders. We’ll keep on top of this story, and
keep you updated every step of the way.
[SWOOSH]
Do you work in a rural area? If so, you’re probably familiar with the United States
Department of Agriculture’s Section 502 Single Family Housing Guaranteed Loan.
For rural households, Section 502, administered by the federal Rural Housing
Service, is one of the bedrocks for financing home purchases. In most cases,
lenders make the mortgage loans and the federal government guarantees them.
But the Rural Housing Service also has a smaller program, which makes the loans
directly to borrowers. It’s used mostly for people who might not be able to get
other financing, without it.
Cathy Glover, the director of that program, came to NARÕs Washington offices
last week to talk about how the two loan programs differ and who can benefit
most from the direct loans.
[QUOTE]
NAR is working with the USDA on a Frequently Asked Questions document to help
you and consumers understand the program more. Look for that on Realtor.org
soon.
[SWOOSH]
Also at NARÕs offices in Washington last week was Dr. Robert Shiller, Yale
professor and Nobel Laureate, whose S&P/Case-Shiller Home Price Index is a
widely cited indicator on the state of the housing market.
[Shiller quote]
He and NAR Chief Economist Lawrence Yun joined other economic experts to
identify the strengths and weaknesses of the real estate market today.
Yun said overly tight credit availability continues to keep the market from
reaching its full potential.
[Lawrence QUOTE]
But economists also said wage growth is a big stumbling block to an improved
housing market, and until wages start going up, demand for homes won’t reach
its full potential
[SWOOSH]
And that’s our show for the week of April 27. Real Insights from your nations
Realtors. You can get more on everything we talked about today at The Voice for
Real Estate page on Realtor.org. Thank you for joining us and we hope you’ll join
us again as we bring you all the latest news on The Voice for Real Estate.

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