Special Briefing on FHA
AEIdeas
January 16, 2020
The American Enterprise Institute’s Housing Center released a special update to the AEI Housing Market Indicators on January 15th, 2020.
The briefing covers the following:
Housing has become unaffordable again. The culprit is a supply-demand imbalance, especially at the entry-level. In the recent past, policies have stimulated demand against a limited supply. Such pro-cyclical policies have therefore driven unsustainable home price growth.
Fortunately, this trend appears to be ending.
The special briefing highlights the specific steps that the GSEs and FHA have already taken to reign in their pro-cyclical policies – but more needs to be done, especially by FHA.
This briefing lays out FHA’s reform principles and detailed steps to achieve each of the following objectives:
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- De-risk existing loans
- Reduce the existing footprint, especially in areas with high FHA concentration
- Increase supply
- Create sustainable homeownership
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The AEI Housing Market Indicators provide accurate and timely metrics for the housing market. These include Mortgage Risk/Leverage (with a particular focus on agency first-time buyer volume and risk), house prices and appreciation trends, housing sales (new and existing sales whether institutionally financed, cash, and other-financed), and inventory levels. Since the housing market is influenced by many different factors, all need to be considered together to better understand market trends.
Please find materials from our monthly call below. If you would like to receive invitations to our monthly update calls, please email [email protected]. For data on mortgage risk, please use our Mortgage Risk Index Interactive.
Audio Recording
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