Hispanic Housing Trends
The National Association of Hispanic Realtors (NAHREP) rolled out its annual “State of Hispanic Homeownership” report during its DC conference. It is packed with interesting data. Of note is the statistics from various sources, including the Census Bureau, which shows that Hispanics accounted for 62.7 percent of all new homeownership gains over the past decade. This is a formidable element for any company in real estate and finance, if they are setting strategies for their future.
Add in the fact that “at a median age of 28.7, Hispanics are younger than the median age of non-Hispanic Whites (43.2 years) and the median overall U.S. age of 37.8 years,” and you can see why the labor force participation rate is higher for Hispanics than white non-Hispanics. This is a must-read for economic and policy leaders, as this is a force of change that will have profound impacts to businesses across the nation over the years ahead.
Speaking of Workforce Trends
There is a truly unusual – and perhaps troubling – trend, as seniors continue to work far past traditional retirement age. As Advisor Perspectives shows us, in the age cohort above 60 years, the growth in labor force participation has increased significantly since 2000.
What is most interesting is that it increases the older one gets, with age 75 and over showing a 72 percent increase.
Does this data portray a lack of reserved assets ample enough for surviving retirement, forcing seniors back into the workforce as funds run dry? Or, is this simply a preference to return to work late in one’s lifetime? Mortgage Media finds this data intriguing.
What’s more concerning is looking at the same data by sex with older women returning to the work force at significantly higher rates than men, pointing to perhaps disparities resulting from single parent financial burdens and wage differences during younger years leading to lower savings rates.
We are interested in the views of others as to what is behind this data as we remain concerned that this LFPR increase is likely driven more from economic burden than lifestyle choice.
False Claims Act
We note the Quicken Loans story in Housing Wire regarding their years long legal battle with the Department of Justice over the False Claims Act. We note the fact that Quicken is the only major lender to have not settled their FCA case, unlike almost all others, and have steadfastly defended their innocence. Not only has Quicken refused to settle, they have been effective at slimming down the volume of loans used as the base sample for the suit. “We’re talking about 55 loans that the DOJ said had an issue with out of the 250,000 FHA loans that we’ve done in that time period,” stated Bill Emerson, the Vice Chairman of QL and former MBA Chairman. “We refuted 47 of those, so we’re only really talking about eight of those.”
What is interesting to us is that time may be a key factor given the change in tone from the Trump Administration compared to that of the previous Obama regime. Secretary Carson and FHA Commissioner Brian Montgomery have both called for reforms to the manner and conditions under which FCA is used.
Regardless, with a court date now set for trial, the judge has ordered both Quicken and the DOJ to take one more attempt at settling. We will be watching this closely to see if a resolution can be achieved outside the courts that removes the reputation risk to Quicken and limits the actual size of the settlement amount. We speculate that without a significant change in the DOJ position to date, this may still head to court. Mortgage Media will keep reporting on this, as it is a key case for all lenders that could set precedent, should Quicken prevail.
We share with you some of the key data released by CoreLogic showing that there may be some real concerns that could impact housing and home sales. Let’s start here with Core Logic showing that national home prices have slowed for ten straight months.
This leads us to ask what is behind this? Given the NAHREP data that points to the need for younger millennials to drive purchasing, perhaps we should look at their situation. Core Logic notes that consumer credit delinquencies are on the rise especially for student loans and automobiles:
And perhaps this should not be too surprising when looking at debt burdens of young people. Just note this troubling data point about the rise in student debt since 2013 which has doubled from $2 trillion to $4 trillion driven by college loans, credit cards, and auto loans:
With mortgage rates rallying these past few weeks and the spring buyers’ market in season, we will be extremely curious to see if there is more to this story and whether first time homeownership rates stagnate given a very different debt load and wage imbalance, combined with a continued shortage in affordable first time housing stock. It’s a key discussion for all in our industry and one that we think will only continue to grow in importance in the years ahead.