Fannie Mae's Doug Duncan offers his predictions for 2021

Doug Duncan doesn’t claim to be an oracle, but the Fannie Mae Senior Vice President and Chief Economist on Thursday offered some forecasts for 2021, even amid a pandemic that has thrown markets into disarray.

The country is mired in a recession, and while the CARES Act provided a short-term jolt to the economy, much remains uncertain about COVID-19 and its ultimate impact on the U.S. economy and the housing market, he said.

“At the end of 2019, we were at 3.5% unemployment,” Duncan told attendees at HousingWire Annual on Thursday. “We think at the end of 2021, it will be roughly double that, around 6%.”

There are promising signs of a partial recovery, according to Duncan. During the second quarter of 2020, approximately $1.7 trillion in national income was lost. By the time the full data is made available for the third quarter, Duncan estimates that about $1.2 trillion will have been recaptured.

“Over the course of the rest of the year, the quarterly numbers by which the economy grows, will slow,” Duncan told attendees. “And by the end of 2021, we would expect to be back, just about where we were at the beginning of 2020.

As the world continues to navigate the impacts of COVID-19, HousingWire sat down with TMS to learn more about their customer service philosophy and why proactively educating borrowers on forbearance is essential.

Presented by: TMS

Duncan touched on migration patterns during his panel. A large segment of the population is working from home, transforming spare bedrooms into offices. Increasingly, young adults are moving back with their parents, and many urbanites have fled big cities such as New York and San Francisco to more spacious areas.

This shift is being driven by the fear of disease and density, the economist said. Home builders are moving to capitalize on the opportunity. Duncan said that single-family starts are climbing to pre-pandemic levels, suggesting further gains in construction.

Duncan said he expects existing home sales to ultimately “be up a percent or more in 2021,” Duncan said. “The new home sales numbers had a big jump in 2020, and [there will be] more growth in 2021, but they’re going to have to rebuild that inventory, because anything that the builders are building today gets sold. So they’re working hard to try to build inventory.”

Although he believes home prices will continue to rise due to limited inventory, well-qualified buyers will be able to take advantage of low interest rates, Duncan said.

If the Fed keeps the short term rate where it is, Duncan said that those rates will stay low for a significant time period as well, meaning that the mortgage rates are “going to be very good” for households.

“Current homeowners are more pessimistic than potential new buyers – they’re pessimistic because they’re afraid of somebody coming to their house and walking through with the virus or the fact that other people won’t go out and shop because of fear of the virus, so they might take a discount on their house price,” Duncan said. “They’re simply not offering houses for sale, and you did see a big drop in listings at that time.”

If there is a resurgence of COVID-19 without an effective vaccine broadly distributed, Duncan said that the ‘W-shaped’ environment could become a reality.

“In that environment, I would not expect a normal housing cycle because what would happen is, then those businesses which have been able to keep going and keep their salary workers, who tend to be more in management in place, would start laying those people off and that’s when the risks rise on the housing side,” Duncan said. “But if we get a relatively broadly distributed vaccine that is demonstrated to be effective, then I think we do return to a to a normal housing cycle, especially, unless the Fed changes its posture, if rates stay low, it will be viewed as a great opportunity for people to get in.”

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Habitat for Humanity sees success with aging in place program

By Didier Malagies • January 22, 2025

A dedicated aging in place (AIP) program offered by the Oswego County Habitat for Humanity (OCHFH) in New York says it is seeing success by incorporating family, community and local resources to ensure older homeowners can remain where they prefer. “It’s been projected that, over the next 20 years, households led by individuals in their 80s will become the fastest growing age group , which provides stability within their communities,” said Samuel Raponi, OCHFH executive director. Through the organization’s AIP program, Habitat collaborates with families, local organizations and other community members in an effort to provide homes that prioritize living for older adults, he said. “This ultimately enhances their quality of life. We employ two different assessments in each case to ensure that the homeowners’ needs are clearly understood,” he added. An initial assessment of the client’s living situation aims to assess each person’s daily living activities, which are scrutinized by a “health or human services professional,” the organization said. This includes how they manage regular tasks like cleaning, shopping, paying bills or interacting with their community. A second evaluation specifically assesses home repair needs, and how to make a dwelling more livable for the needs of an older person. “These assessments enable OCHFH to provide modifications to their homes tailored to each homeowner’s specific lifestyle,” Raponi added. “Among the kinds of modifications we make are installing lever door handles, ramps, railings, grab bars, walk-in showers with a low threshold, and raised toilets to make homes more accessible for older adults.” Other resources, including Meals on Wheels , may be seen as necessary to deploy depending on a person’s circumstances, and all combine into a living situation that is aimed at being more generally beneficial for someone seeking to age in their own home. AIP is actively seeking more collaborative partners in the health care sector, owing to unique challenges visited upon older people who may not be able to adequately address their health needs. “Low-income older adults face a higher risk of chronic diseases and disabilities due to limited access to primary care and a greater likelihood of living in substandard, deteriorating housing,” Raponi added. A recent study from Carewell suggested that many older adults see aging in place as a financial necessity considering the costs of other kinds of living arrangements older people may choose. Nearly half of respondents (47%) characterized aging in place as both a preference and a financial necessity in tandem.

Is it time to prequalify for a mortgage now

By Didier Malagies • January 20, 2025

1. Assess Your Financial Health Credit Score: Check your credit score (usually 620 or higher is required, though higher scores get better rates). Debt-to-Income Ratio (DTI): Calculate your monthly debt payments compared to your gross monthly income (lenders typically prefer a DTI below 43%). Savings: Ensure you have enough for a down payment (typically 3-20%) and closing costs. 2. Gather Financial Information Lenders will need the following: Proof of income (pay stubs, tax returns, W-2s/1099s). List of assets (savings, investments, retirement accounts). Details of current debts (credit card balances, student loans, etc.). 3. Choose a Lender Research different lenders, including banks, credit unions, and online lenders. Compare prequalification options (many allow online applications). 4. Complete the Prequalification Process Fill out the lender’s prequalification form (online, over the phone, or in person). Provide basic details about your income, debts, and assets. 5. Review Prequalification Results The lender will give you an estimate of the loan amount and potential interest rate. Remember, prequalification is not a guarantee of approval and doesn’t involve a hard credit inquiry. 6. Follow Up with Preapproval If you’re serious about buying, consider getting preapproved, which involves a more in-depth review and is stronger than prequalification. Tips: Use online calculators to estimate affordability before reaching out to lenders. Avoid large purchases or opening new lines of credit during the prequalification and preapproval process. Would you like details on specific lenders or tools to compare mortgage options? tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

USA Today: If Social Security falters, reverse mortgages could be worth a look

By Didier Malagies • January 13, 2025

Many retirees have said they rely largely — and sometimes entirely — on Social Security benefits as their primary income stream in retirement . But in instances where these payments may not be enough to make ends meet, other options should be considered — and in the right situation, a reverse mortgage could be one such option. That’s according to a column published this week by USA Today , which assessed reverse mortgages in tandem with options such as personal savings, a part-time job and other benefits programs. “A reverse mortgage is a possibility for seniors with substantial equity in their homes,” the column stated. “It essentially enables you to borrow against your equity, and you aren’t required to make any payments while you’re still alive as long as you live in the house.” The column is likely referencing the Home Equity Conversion Mortgage ( HECM ) program insured by the Federal Housing Administration (FHA). Loan proceeds are dependent on the amount of equity in the home and current interest rates, the column noted, and there are multiple disbursement options available, the column noted. The minimum age requirement of 62, a core tenet of the HECM program, was also mentioned. “There are closing costs and other fees, and you’ll still be responsible for maintaining the property and paying the property taxes and homeowners insurance,” the column noted. It characterized the loan as a “solid option” for those who have few other assets beyond their homes, adding that “it might not be the right move if you intend to pass the property on to your heirs someday. After you pass away or move out of the home, you or your estate will have to repay the loan. This will reduce how much your heirs receive.” Recent survey data from Clever Real Estate highlighted some realities of relying on Social Security benefits in retirement. Roughly one in five respondents in the 1,000-person survey said they rely exclusively on Social Security benefits as their sole income stream in retirement, with nearly 30% saying they believed they would be able to rely on them. Last year, data from Nationwide suggested that an increasing number of older investors believe that retiring at the age of 65 is no longer a realistic option . This is largely tied to higher levels of stress they’re feeling about the economy and the cost of living.