In a recent article for Inman News entitled “US housing not remotely near debt bubble — credit’s too tight”, mortgage broker Lou Barnes wrote the following regarding the amount of outstanding mortgage debt:
“Now, $605 billion outstanding, a shadow of the $2.2 trillion at the peak. We have over-tightened there, thanks to Dodd-Frank — legitimate jumbo loans too hard to do, and no home for loans with big down payments but non-Fannie incomes. About two-thirds of all home loans — $6.1 trillion — still rely on Fannie-Freddie-FHA-VA. All of the mortgages held by U.S. banks and credit unions combined are less than half the “agency” total. This is good news and bad news. U.S. housing is not remotely near another debt bubble — credit is still too tight. Which means to me that the current housing expansion has a long way to go.”
There’s been a lot of discussion nationwide about interest rates, housing prices, stock prices, etc and unfortunately, no one has the crystal ball that will tell us how any of these markets will change – or when. Lou’s article is interesting because from the mortgage perspective, the housing market has been relatively conservative, which points to more room for housing growth. Up here, we hope that more housing supply this year will help to moderate the frenzy that local markets have been experiencing.
