Comments on: NAHB 2022 “Priced Out” Estimates https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/ National Association of Home Builders Discusses Economics and Housing Policy Mon, 21 Feb 2022 16:37:31 +0000 hourly 1 By: Robert Dietz https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1903110 Mon, 21 Feb 2022 16:37:31 +0000 https://eyeonhousing.org/?p=31410#comment-1903110 In reply to Steve Rosenstock.

The article linked in the post has a discussion of alternative interest rates.

]]> By: Steve Rosenstock https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1903079 Mon, 21 Feb 2022 15:27:00 +0000 https://eyeonhousing.org/?p=31410#comment-1903079 What happens if you use the most current interest rate? According to Bankrate.com “For today, Monday, February 21, 2022, the average 30-year fixed-mortgage rate is 4.19%, up 19 basis points over the last seven days. If you’re looking to refinance, the average 30-year refinance rate is 4.17%, up 14 basis points over the last seven days”

]]> By: Na Zhao https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1901713 Sat, 19 Feb 2022 01:08:44 +0000 https://eyeonhousing.org/?p=31410#comment-1901713 In reply to Jonathan.

We used 73bps as the private mortgage insurance rate in our calculation. The amount of private mortgage insurance is treated as part of the mortgage payment (PI) in the chart, as it depends on the amount of loan. The tax and insurance (TI) in the chart includes the property tax and homeowner insurance, which are closely related to the property value.

]]> By: Jonathan https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1901522 Fri, 18 Feb 2022 16:30:05 +0000 https://eyeonhousing.org/?p=31410#comment-1901522 In reply to Steve Cunningham.

Yeah the math checks out. Looks like they are using 50bps in the chart.

Probably a more helpful data point is “DTI of a median house with a median income”.

]]> By: Robert Dietz https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1899952 Tue, 15 Feb 2022 16:00:32 +0000 https://eyeonhousing.org/?p=31410#comment-1899952 In reply to Steve Cunningham.

Steve, the analysis uses 73 bps. The underwriting parameters have remained fixed for some time to allow comparisons.

]]> By: Steve Cunningham https://eyeonhousing.org/2022/02/nahb-2022-priced-out-estimates/#comment-1899513 Mon, 14 Feb 2022 17:42:38 +0000 https://eyeonhousing.org/?p=31410#comment-1899513 Hello, I was checking the math and I could be wrong but believe your data is factoring a 50bps on PMI and not 73bps. If using a 73bps, this actually helps your narrative and making more homes unaffordable for households. Just though to clarify that.

But one actual question that I have is, why are you using 28% DTI to determine affordability in today’s market? Of course this is the Ideal front end ratio and related to the old rule 28/36 (28% front end and 36% backend ratios).

Today banks are willing to go <43% conventional, FHA allows up to 58%, Fannie up to 50% and VA up to 55%. So, people are stretching themselves today and banks are allowing it.

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