Regulation won't add affordable housing to the market: mortgage execs

Mortgage industry executives claim sparse affordable housing supply is the most impactful hurdle for first-time homebuyers entering the market in 2019, but the majority don't think regulatory policy will help the cause, according to Genworth Mortgage Insurance.

About 58% of industry professionals identified the lack of affordable housing as a key hurdle for new housing market entrants, and 62% said regulatory policy changes introduced over the next 12-24 months will not support the construction of more affordable homes, priced at $300,000 and below, according to a Genworth survey of over 200 execs at the Mortgage Bankers Association's 2018 Annual Convention held in Washington, D.C., last month.

Looking at the housing market overall, 54% of surveyed professionals named rising interest rates as the biggest market obstacle for 2019, while 37% cited affordable housing supply. About 7% of execs tapped government-sponsored enterprise reform as a top housing market hurdle and 2% named the pending expiration of the qualified mortgage rule.

"While rising interest rates and a lack of affordable housing supply continue to drive increase in home prices, first-time homebuyers have not wavered in their efforts to buy homes," said Genworth President and CEO Rohit Gupta in a press release.

"We continue to stress the importance of education and optionality for this demographic to set them up for success. Their growing presence in the purchase market will require continued support and customization as they continue to play a meaningful role and drive demand in the housing market," he continued.

Regarding first-time homebuyers specifically, 20% of mortgage execs see lack of consumer knowledge on the home buying process as a barrier, while 13% named rising interest rates and 9% cited the absence of proper credit history as other obstacles.