Friday, May 23, 2014

Keating: Housing Market Rising Slowly

A combination of regulation and the economy is resulting in a slow rising housing market, ABA president and CEO Frank Keating said on CNBC’s Squawk Box. A soft labor market, $1 trillion in student loan debt and poor household formation have all contributed to weak growth in the housing market. These factors, coupled with regulators “codifying excessive caution with their Qualified Mortgage rule,” have all contributed to the lagging recovery of the housing market.

[The banks] want to make qualified mortgage loans. So to go and ask your mom and dad to co-sign a note, that’s not a QM loan. To ask the owner to collateralize the first X thousand dollars of the mortgage loan, that’s not a qualified mortgage loan. So you have a lot of people being turned down.

Single-family mortgages have been declining, with 1-4 family residential property loans decreasing year-over-year for the past six years, “[and] that’s not healthy for the economy because housing makes a big difference in terms of economic growth and jobs.”

Watch the interview.

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