TheMReport — News and strategies for the evolving mortgage marketplace.
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Th e M Rep o RT | 15 COVER STORY rates will rise once again to 2 to 3 percent, which will affect home- owners and the rate and manner in which lenders lend. "Mortgage availability is a big focus," Mason said. "Clearly, the lack of a healthy labor market is a factor holding back lending, so is the fact that the GSEs are in conservatorship. The same with FHA, the current administration is taking steps to try to loosen availability at the margin. It will simply be a long time. Investors have been burned, and it will take a while to regain that trust." A level of regulation is neces- sary and markets expand and contract, but a heavy-handed ap- proach comes with a cost. "The canary in the cage is sage, but not free," Konyk said. "So, we don't take it away completely, but if you're too tightly managed, then you begin to erode solution- building discussion." He says that the regulatory community needs to provide for "catastrophic backstops" not for everyday occur- rences. "The minute you take that away, you take away innovation." The New Wave I nnovation is the key to the future, especially in housing. In order for housing to grow into a sustainable driver of the economy once again, industry professionals must begin to in- novate to be ready for the future (potential) demand. "We get in the way of innova- tion because we're afraid it won't work," Konyk said. He circles back to the discussion around flexible mortgage products and suggests that increased analysis be done to see if those products are just the type of innovation the industry needs. "It's a real coin toss," Konyk said. "Do we balloon payments opposed to more flexible products. I'm not sure if it's the right an- swer. It's not necessarily where we need to go from an innovation." One way to become a more solution-driven industry that serves its future demographic to the best of its ability is to understand the data that's coming around the horn. "The [housing industry profes- sionals] need to be much better users and updated than they are currently and to understand what the patterns are," he said. "As an industry, we don't do a really good job, developing a good relationship with sophisticated databases to distinguish between the signal and the noise." Still, both Konyk and Comeau see a housing market that is stable and potentially booming in the next ten years. "The real trauma is how do we get to the next five to seven years, how do we manage the process now for the coming years," Konyk said. "One of the great virtues of this country is our resiliency. We'll find a way out of this, and eventually we'll get there." Mason thinks that we are largely at the point of stabilization based on current market data. "I would actually call housing stabilize now, post-housing crisis. My projection was 2015, which in my mind means that most foreclosures cleared. We're in the last stage of clearing the fore- closure process," he said. "We haven't seen strong economic growth, but nonetheless looking at a variety of data defined by continued falling home prices and continued foreclosures being taken off of the market. "We've finished the cycle largely," he said. "Separate question is if the housing market is defined by a homebuilding context. There are a decent amount of people that think that housing starts re- main well below trend, and that's concerning." Konyk says that by 2024, mil- lennials will be in their peak owning and family years, and that demand will rise again. By 2024, the industry and govern- ment, kicking and screaming, will have adapted to the new generation of owners. "2024 will be ok. We'll have ten years to have what works and what doesn't," Konyk said. "People aspired to homeownership who shouldn't have. We need to cre- ate realistic expectations going forward. "Ultimately, the housing mar- ket will be strong," he continued. "Now, ultimately means no time soon. It all hinges on a stronger job market. Consumers need good confidence on a reliable job situation. And honestly, we haven't had the jobs recovery that we've needed." Maybe by 2062, homeowners will be in the sky, but for right now, industry analysts agree that consumers need solid footing to chart a new path to sustainable homeownership.