Mortgage News for March 26, 2021

FHFA Relaxes Standards

The Federal Housing Finance Agency (FHFA) is extending lighter appraisal and employment verification rules for Fannie Mae and Freddie Mac. Because the pandemic made it harder for appraisers to enter houses, FHFA authorized more drive-by and desktop appraisals. It will also continue to accept simpler proof of income, including a recent pay stub or bank statement.¹

Buying with No Credit

First-time home buyers with little or no credit have what some call a "thin file." But it may not prevent them from getting approved for a mortgage. Most are eligible for FHA loans and can even get conventional mortgages if they prove steady income, assets, and a history of paying their bills.²

Material Costs Hindering Home Building

Construction of new homes weakened in February as high costs for lumber and other material hindered new-home construction, according to a March 17 report. Housing starts - both single-family and multifamily building - fell 10.3% to a seasonally adjusted annual rate of 1.42 million units in February. Despite headwinds, economists said permits for single-family homes are up 36% over the last 12 months. Cost and availability of building materials - rather than a decline in demand for new homes - are the cause of projects not moving forward. Single-family starts for the first two months of 2021 remain 6.4% higher than the first two months of 2020.³

Record Growth on the Way

Goldman Sachs predicts that the U.S. economy will see 7% GDP growth in 2021, the highest figure since 1984. The combination of a fast pandemic recovery and the passage of the $1.9 trillion American Rescue Plan should also spill into 2022, with Goldman anticipating 5.1% growth for that year. They project the jobless rate will fall to 3.5% by the end of 2022, a 50-year low. Much of this will bleed into the housing market. ⁴

3D-Printed Houses Arrive

Something new is coming to the housing market... Last month, the first publicly listed 3D-printed house went on the market. Now entire communities built with this technology are coming online. Industry leaders estimate that these extruded concrete or polymer structures can save 30% off conventional building costs and months of construction time. They're also much more energy-efficient and resilient to the elements.⁵

Sources: ¹HousingWire, ²The Mortgage Report, ³REALTOR Magazine, ⁴CNN.com, ⁵CNBC