The Future Is Looking Much Better For The Younger Generation Of Home Buyers

The Future Is Looking Much Better For The Younger Generation Of Home Buyers


The future is looking much brighter for the younger generation of home buyers. 

The large turnout with attendees at the  Trade Expo learned issues surrounding condo financing and student loan debt may see real progress soon. *At the 2016 Legislative Meetings & Trade Expo, participants were informed that there will finally be light on the horizon regarding issues surrounding condo financing and student loan debt


*In may of 2016, this "breed"  of a younger and wiser generation,  has been given a glimmer of hope again where home ownership is concerned.  The two obstacles of high school loan debt combined with strict FHA rules for condominium purchases,  which are more affordable to the newer younger home buyer, may now be seeing progress on both ends of the spectrum. according to speakers at the 2016 REALTORS® Legislative Meetings & Trade Expo in Washington.  Young people come out of the gate facing two hurdles to home ownership — high student loan debt and tough rules for using FHA financing for condominiums, which are often the most affordable homes on the market. However, progress is being made on both fronts, according to speakers at the 2016 REALTORS® Legislative Meetings & Trade Expo in Washington.


* In regards to condo funding, U.S. Department of Housing and Urban Development Secretary Julián Castro stated there will be new rules regarding and implementing improvements to FHA condo financing issues. On the condo front, U.S. Department of Housing and Urban Development Secretary Julián Castro used the meetings as an opportunity to announce progress on a rule implementing improvements to FHA condo financing.


*The Office of Management and Budget is now reviewing this last step for completing all the details necessary to proceed, making condo financing more readily available to this younger home buyers Market. Making “HUD’s rule out the door,” declared Castro . The rule is under review at the Office of Management and Budget — typically the last step before finalization — and Castro said it would help make condo financing easier to obtain. “HUD’s rule is out the door,” he told REALTORS® yesterday.


* This rule will soon be open to the public once it makes it through OMB review. According to NAR’s (National Association of Realtors) priorities include easing owner-occupancy and being that this is at the top of their to-do list, it will make it easier for condo boards to get certified by the federal government every year. The rule will be open for public comment after it makes it through OMB review and is published as a proposed rule. NAR’s priorities include easing owner-occupancy and commercial space ratios and making it easier for condo boards to get certified by the federal government each year.


*Student loan debt has still  shown to be a very prominent issue that has continued to grow in the last decade. To date, 42 million Americans have an average of $29,000 in federally backed student loans outstanding, according to Rohit Chopra, an advisor to the U.S. Department of Education who had also attended these meetings. An astounding 7 million are in default, today and each day 3,700 additional borrowers go into default. “We have a lot of work to do,” Chopra told REALTORS®.


Student loan debt remains a large problem, and it’s grown rapidly in the last decade. Today 42 million Americans have an average of $29,000 in federally backed student loans outstanding, according to Rohit Chopra, an advisor to the U.S. Department of Education who was also on hand at the meetings. Of these borrowers, 7 million are in default, and each day 3,700 additional borrowers go into default. 





* Baby boomers are also taking on a lot of debt because they are acquiring loans for their children  said Meta Brown,  senior economist at the Federal Reserve Bank of New York who also joined Castro and Chopra this meeting they  titled &The Impact of Student Debt on Housing Choices: Regulatory Issues Forum.

It’s not just millennials who are racking up the debt; baby boomers, either because they’re taking out loans on behalf of their children or they’re going back to school themselves, hold a significant portion of it, said Meta Brown, a senior economist at the Federal Reserve Bank of New York who joined Castro and Chopra at a session titled &The Impact of Student Debt on Housing Choices: Regulatory Issues Forum& on Tuesday.


* As debt increases and home prices rise, we can be seeing a drop in first-time home buyers. 32 percent of home buyers last year were first-time buyers, a 10 percent drop from historical norms. According to  Jessica Lautz, NAR's director of member and consumer survey research.  The debt load, along with affordability challenges that only grow as home prices rise, could be playing a role in the drop in first-time home buyers. Jessica Lautz, NAR's director of member and consumer survey research, says 32 percent of home buyers last year were first-time buyers, a 10 percent drop from historical norms.  To help pave the way for home buyers, Castro said in his portion of the session, the FHA is reducing the amount of deferred student debt, from 2 percent to 1 percent, that counts against a borrower’s debt-to-income (DTI) ratio. That means someone with $10,000 in deferred student loan debt would have a $100-per-month repayment obligation in calculating DTI, rather than $200.  


Looking to the longer term, legislation is in the works to address the issue. Among the bills, the “Empowering Students Through Enhanced Financial Counseling Act,” H.R. 3179, would help ensure students are better prepared to handle debt, and the “Access to Fair Financial Options for Repaying Debt Act,” S. 1948, would provide more repayment options.  Mabel Guzman, chair of a working group on student loan debt NAR launched in 2014, said the group is making policy recommendations to the Board of Directors this week to help position the association on the issue.


* In an effort to help this breed of the younger generation of home buyers, Castro said the FHA is reducing the amount of deferred student debt from 2% to 1%, in alignment with their debt to income ratio. So, in essence, someone with $20,000 in deferred student loan debt would have a $200-per-month repayment obligation in calculating DTI, rather than $400.  To help pave the way for home buyers, Castro said in his portion of the session, the FHA is reducing the amount of deferred student debt, from 2 percent to 1 percent, that counts against a borrower’s debt-to-income (DTI) ratio. That means someone with $10,000 in deferred student loan debt would have a $100-per-month repayment obligation in calculating DTI, rather than $200.


* in an effort to find a longer-term solution the legislation is working to address these issues. In conjunction with these bills, the “Empowering Students Through Enhanced Financial Counseling Act,” H.R. 3179, would help ensure students educated and made more aware regarding ways in which to handle debt.  The “Access to Fair Financial Options for Repaying Debt Act,” S. 1948, would provide more repayment options for those in need.  Looking to the longer term, legislation is in the works to address the issue. Among the bills, the “Empowering Students Through Enhanced Financial Counseling Act,” H.R. 3179, would help ensure students are better prepared to handle debt, and the “Access to Fair Financial Options for Repaying Debt Act,” S. 1948, would provide more repayment options.


* because of all these high debt loans in AR was launched in 2014,the chair Mabel Guzman said that these groups are making policy recommendations to help further their position regarding the association on these issues for these young home buyers. Mabel Guzman, chair of a working group on student loan debt NAR launched in 2014, said the group is making policy recommendations to the Board of Directors this week to help position the association on the issue.


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Phone: 702-355-1996
Dated: August 16th 2016
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