Bringing Housing Back Into Reach

The Senate Committee on Banking, Housing, and Urban Affairs, recently held a hearing entitled, “Oversight of Federal Housing Regulators.”

Focusing on the nation’s housing affordability crisis, Senate Banking Committee Chair Sherrod Brown welcomed Adrianne Todman, Acting Secretary of the U.S. Department of Housing and Urban Development (HUD), and Sandra L. Thompson, Director of the Federal Housing Finance Agency (FHFA) to share their insight into what their respective agencies are doing to help alleviate the situation.

“Our homes are an anchor in our lives,” said Sen. Brown in his opening comments. “But for too many families around the country, a home they can afford and build their life around feels out of reach.”

Biden Administration’s commitment to housing

Acting Secretary Todman, who was named to her new role last month after Marcia L. Fudge announced her resignation as head of the Department, highlighted many of the steps taken by the Biden Administration to help ease the housing crisis. She noted that through President Biden’s Housing Supply Action Plan, more apartments were under construction in 2023 than in any year on record. In 2023, HUD took several steps to preserve the affordable housing stock by preserving 13,300 homes using Project-Based Vouchers, and 5,300 homes using Project-Based Rental Assistance (PBRA) under the Rental Assistance Demonstration.

“This preservation, in addition to the production of new housing, is critical to ensuring that families have access to affordable housing as we meet the needs that exist,” said Acting Secretary Todman. “In 2023, HUD launched the first of its kind funding initiative: the Pathways to Removing Obstacles (PRO) to Housing. This competitive program will support communities in identifying and removing barriers to housing production and preservation, such as outdated permitting processes and restrictive zoning, and we thank this Committee and Congress for seeing its value and providing $100 million in the FY24 spending deal.”

Affordability concerns grow

A recent study from LendingTree found that some homeowners, and renters as well, live in poverty. Using data from the latest U.S. Census Bureau American Community Survey (ACS), more than three million families who live in single-family owner-occupied homes in the country earn an income below the poverty threshold for their family size. This shows that while homeownership can be a pathway to long-term wealth creation, it’s far from the only thing needed to secure a family’s financial security.

“Whether you’re in downtown Columbus or Minneapolis or rural South Dakota or Wyoming, the problem is the same–housing is too expensive. It has been for far too long, and one big reason is that we don’t have enough of it,” said Sen. Brown. “For the past decade, rent has just kept going up and up. One-in-four renters pays more than half their income for rent. And when more than half of your income goes to rent every month, it’s hard to juggle all the bills you already have–let alone save for a down payment. High rent stops people from becoming homeowners. So many families think, if only I could come up with the down payment. The money for a down payment is what stands between millions of Americans and the dream of homeownership.”

According to the National Association of Realtors (NAR), home prices have doubled in less than a decade, and in the strong home price appreciation of the 2012-2019 period, was followed by extraordinary growth during the COVID-19 pandemic. National home prices rose approximately 11.7% in 2020, and 17.8% in 2021–far outpacing wage growth. The median sales price increased more than $100,000 in just four years, from $275,000 in late 2019 to $381,000 in late 2023.

“While housing affordability represents a national problem, the impact of this problem is most acutely felt in local communities,” said FHFA Director Thompson. “In my capacity as FHFA Director, I have traveled throughout the country and heard about these issues directly from stakeholders, including working families in cities such as Philadelphia, Louisville, and Las Vegas, as well as in more rural areas in states such as Nebraska and Tennessee. I have heard about the need for more workforce housing, which enables teachers, first responders, construction workers, and municipal employees to live in the communities they serve. I have heard about dual-income renter households that cannot build the savings for the down payment and closing costs on a home purchase. Therefore, FHFA and its regulated entities are prioritizing actions that encourage affordable, sustainable housing opportunities in the single-family and multifamily markets.”

Measures to alleviate the affordability crisis

During the hearing, Sen. Brown cited legislation he has sponsored, the Downpayment Toward Equity Act, and the Homes for Every Local Protector, Educator, and Responder Act of 2023 (HELPER Act).

The Downpayment Toward Equity Act is a measure that provides downpayment assistance to first-generation homebuyers to address multigenerational inequities in access to homeownership and to narrow and ultimately close the racial homeownership gap nationwide.

The HELPER Act seeks to provide mortgage assistance to law enforcement officers, elementary and secondary school teachers, firefighters, or other first responders. Specifically, these individuals may be eligible for a first-time mortgage on a primary family residence with no down payment. Instead, the mortgage is subject to a one-time, up-front mortgage insurance (MI) premium.

“We must continue our bipartisan work to move forward commonsense proposals that will help expand housing options and reduce costs, and I look forward to continuing to work with Ranking Member Scott and our colleagues on this Committee toward that goal,” said Sen. Brown.

Click here for more on the Senate Banking Committee hearing “Oversight of Federal Housing Regulators.”

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Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for
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