Are Rental Units Driving the Gains in Housing?

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Aug. 16 (Bloomberg) –- Real Estate Attorney Shari Olefson discusses the health of the housing market with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Due to multifamily construction apartment buildings.

Our rental units drying -- trying -- for the most part, they are.

We have added more rental households than we have in recent history.

That is where we are looking at them in terms of building.

The slowdown you spoke of, how does that contrast with the surge in builder confidence we are seeing?

Most of our builders are focusing on the multi.

The problem is, renting is easy up for the builders.

For the homebuyers, it is not.

We're talking about first-time homebuyers.

One of the things we're seeing is a little bit less of the story being about investors, and more about inventory freeing up.

Hopefully we're going to see more buyers getting into the market.

How much of a going to benefit from the constraints of existing homes?

Barring costs are at historic lows.

That is a problem.

We're going to see that continue.

We are coming up against january of 2014. things will start kicking in.

It is going to get tougher.

We're seeing government contraction where there is talk about gsa reform.

They have 10% less of the purchase money mortgage market share rates.

It is going to get tighter for borrowers.

I was reading the information that you sent our producers.

You outlined very hard truths.

The housing sector has been showing signs of life to be sure.

10 million homeowners is still -- are still underwater.

6 million are in default.

House prices are 25% under there.

What is the relief?

About 2 million homeowners became on underwater last two.

That is going to be continue to happen.

The problem is that those first- time buyers, we're looking at folks under 30 years old.

Having trouble getting jobs.

Unless they can buy existing homes, no one can move up.

That is the reasons we are not seeing billy -- building new homes.

For fha you need 3.5%. some of the new rules, there are reforming proposals that would raise the down payment 25%. the other real issue is this past month, they change their rules.

It used to be that you only needed mortgage insurance at 70%. for most first-time buyers, they're going to have mortgage insurance for the life of the loan.

The average or rate, 4.4%. that is a full percentage point higher than it was in early may.

Higher loan rates.

Are they started to weigh on housing?

That is correct.

Services showing the buyers are concerned about it.

Sellers are concerned about that.

The more money buyers are paying towards the mortgage, the less they can pay for homes.

The true thing is that it would have to get up to six percent have an impact because housing is affordable.

The don purchases -- the bond purchases keep things low.

If they taper things next month, how is housing going to react?

A good impact rates obviously.

The other big issue is that the government is trying to get the private sector into the secondary mortgage market.

The last thing investors are going to want to do is invest in 30 year six) two his when interest rates are going up.

Should the government have a role in housing?

If they are eliminated from the mortgage market, is the private sector going to be the backstock?

That is an interesting question because here the president's proposal are saying we need to get the private industry in the market.

We need taxpayer money out because it is not say.

It is interesting to see how they're going to sell to the private sector while they are saying it is not safer taxpayer money.

If the government is out, and it is the private sector's game him a dash game, how will small community banks be affected?

It will be hard for them to compete.

Some of the proposals , the cash back does provide for special treatment for smaller banks to compete.

This text has been automatically generated. It may not be 100% accurate.

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