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The Housing Market ‘Reset’ and its Implications for Housing Policy

The Housing Market ‘Reset’ and its Implications for Housing Policy. Alan Mallach Non-resident Senior Fellow The Brookings Institution . Subprime lending exploded. Housing production outstripped household formation. Between 1999 and 2009 6.9 million more housing units were approved than

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The Housing Market ‘Reset’ and its Implications for Housing Policy

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  1. The Housing Market ‘Reset’ and its Implications for Housing Policy Alan Mallach Non-resident Senior Fellow The Brookings Institution

  2. Subprime lending exploded

  3. Housing production outstripped household formation Between 1999 and 2009 6.9 million more housing units were approved than the number of additional house- holds New Units Authorized Increase in occupied housing units Source: Bureau of the Census

  4. Prices took off, and then fell Las Vegas

  5. Foreclosures skyrocketed 14% of all mortgages are delinquent or in foreclosure Delinquent but not in foreclosure In foreclosure Source: Mortgage Bankers Association

  6. New housing production fell Las Vegas metro area new units authorized by quarter 2005 through 2010 Source: Bureau of the Census

  7. Homeownership rates have declined Source: Bureau of the Census

  8. Tenure patterns have shifted significantly Nearly 3 million more renters Net loss of homeowners Source: Bureau of the Census

  9. the “shadow inventory” is growing 3.4 million mortgages 1.8 million mortgages 570,000 mortgages 240,000 mortgages Source: OCC Mortgage Metrics

  10. Nearly 25% of all mortgages are underwater % of mortgages underwater in 3rd quarter 2009 – top five states and United States

  11. Vacancy rates have risen and remain elevated

  12. Housing is affordable almosteverywhere . . . . . . . . . . . . . . . .50-100% above national median .More than double national median Source: National Association of Realtors, median sales price of existing single-family homes 2009

  13. Earnings have stagnated $622.81 $589.72 $386.55 Real average weekly earnings 1947 to 2007 (2007 dollars) Source: Economic Policy Institute

  14. Unemployment rates are elevated 17.1% 9.9% Source: Bureau of Labor Statistics, April of each year seasonally adjusted

  15. Consumer confidence is at historically low levels

  16. Manufacturing jobs are disappearing 19.4M 17.3M 15.9M 11.9M Manufacturing employment in the United States 1964-2009 Source: Bureau of Labor Statistics

  17. Household formations have declined Average annual increase 2000-2005 = 1,122,000 Average Annual Increase 2005-2009 = 631,000 Source: American Community Survey

  18. Where is the rental housing? 3/4 of all private market rentals are in 1 to 9 unit properties

  19. Who is the target population for affordable housing?

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