5 Things Renters Should Know About Owning DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 11, 2016 For renters who aspire to be home owners, transitioning from an apartment to a house requires a shift in their thinking that they may not be prepared to make. The financial changes that come with owning, the need to consider planting longer-term roots in a neighborhood, and new neighborhood rules are things renters may not be thinking about enough. Read more: Where Buying Beats Out Renting the Most As their real estate agent, it’s important for you to be there for your clients when they’re embarking on a life-changing event such as buying a home. Moving can already be one of the most stressful times in a person’s life, but it may be doubly so for a new home owner. In order to be their most reliable resource, using your knowledge and experience to provide them with guidance, share these helpful nuggets of information with your clients so their transition from renter to owner can be as smooth as possible. They need to understand how their financial investment is changing. Renters may see an increase in their monthly rent every lease term, but they don’t see exactly where it goes — toward property taxes and insurance, even “luxuries” such as trash pickup. As home owners, they don’t have a landlord who handles all those details, so they need to be ready to juggle the financial responsibilities of home ownership. Have an open conversation with your clients about these changes and the importance of budgeting to make sure they make smart financial decisions during this process. They need to be happy with their location for the long-term. As a renter, you can bounce around from home to home every year if you want. But when you own a home, you have to stay put — unless you plan on renting it out, which most home owners don’t. Impress upon your client that location is going to play a much more significant role in their future, so they should think about evaluating school districts, access to amenities, and commute time now as they search for their next home. They may need to abide by new rules. Renters don’t think about possible homeowner association rules they may be governed by, such as trash pickup rules or any curfews or rules pertaining to animals. Make sure to get all the information on neighborhood rules and associations to help your client understand what their new obligations will be. They’ll need to get into the mindset of an owner. Life as your client knows it is about to change. Once your client purchases a new home, they will no longer have a landlord to tend to their many needs, including lawn care and plumbing. The best way you can help them as their real estate agent is to provide them with contact information for local industry experts. They will eventually need certified specialists ranging from HVAC companies to carpenters to electricians. Let them know they don’t have to do everything themselves. They should know their neighbors can affect their value. Renters don’t care who their neighbors are as long as they’re quiet (enough). But your client is now going to want to know whether their new neighbors are renters or home owners. This knowledge can help your clients gauge current and future home value in the neighborhood. If the neighborhood consists mostly of rental properties, it is likely a home owner will lose money on their house in the future. Renters do not always feel responsible for maintaining their properties the way home owners do. Property value comes down to curb appeal. Less-appealing neighborhoods often have more-appealing prices, which is not always good for buyers and home owners. Source: Rob Rimeris is owner of EverSafe Moving Co. in Philadelphia. EverSafe is a five-star, full-service company that offers affordable moving and storage services.
10 WAYS TO QUICKLY UP YOUR HOME VALUE FOR A SUMMER SALE Planning to sell your home this summer? You may have a little – or a lot – to do in order to get your home market ready. But you don’t need a huge budget. These 10 tips can help you get it looking great with little effort, and cash. 1. Paint Crisp white walls are great in a 1920s Spanish. For most other homes, a splash of color is an easy way to warm up the space, make it look more updated, and banish fingerprints and stains. Use a soft neutral like one of these favorite gray shades for a modern look. 2. Address your front door A fresh coat of paint on your front door is a quick fix that pops with potential. Use a bright color like red or yellow to differentiate your home from others and make it shine from the street. If your door really can’t be salvaged by painting it, you’ll be happy to know that replacing it with a new steel door has been shown to return between 75% and 100%+ of your investment. “It’s also a relatively low-cost project,” said Houselogic. “According to the “2015 Remodeling Impact Report,” a new steel front entry door has a national median cost of $2,000 installed.” LinkedIn3. Quick curb appeal Aside from your door, a few easy tasks can make the front of your home look great – important when you’re looking to sell your home since poor curb appeal can keep potential buyers from even coming inside. A new layer of mulch has been called the easiest and quickest way to add curb appeal. Pulling noticeable weeds, giving the lawn a quick mow, and bringing in fresh flowers – if you can’t plant, put a few pots near the front door—can make all the difference. 4. New appliances Even if the rest of your kitchen needs work, new stainless steel appliances can tempt buyers. This package from US Appliance is just $1,749. US ApplianceIf you end up with a fancy new fridge you don’t want to leave behind, make sure to let your real estate agent know so it’s stipulated in the contract. 5. Quickie bathroom updates A new or painted vanity, hardware, fixtures, and lighting can make a tired bathroom look fresh again. Don’t forget the little things – a fluffy set of towels, a nice rug, a modern shower curtain, and sleek accessories can make the space look good, even if it’s really in need of a gut job. 6. New bedding You’d be surprised how new bedding can transform the look of your bedroom for next to nothing. There are two schools of thought here: get a cheap bed-in-a-bag set that looks nice but probably doesn’t have the thread count you want for everyday use, or spend a little more for something that has the looks and the luxe. 7. Create a guest room Have a room that’s currently an undefined space? A blowup bed covered in some chic bedding can help buyers envision how they’ll use the room. This is a top tip from stagers, who say that “multipurpose” rooms can confuse buyers, leaving them unsure if a home will work for them. 8. Set the scene outdoors Everybody is into indoor-outdoor living the days. A few tricks outside can make your place look inviting. Create a seating area with some inexpensive outdoor furniture. Scour garage sales or catch a sale at Home Depot or Target. Put up an umbrella for shade and use inexpensive pavers or deck tiles to define the space. Stage it for outdoor dining and you’ve just created valuable, usable space buyers can see themselves enjoying. Polywood Furniture9. Steal a few staging tips Hire a professional stager and it can set you back a couple thousand dollars. But you can steal a few of their most important tricks for free. Cleaning like you’ve never cleaned before, decluttering, and paring down your furniture to create inviting seating areas will allow buyers to see the space instead of your stuff (or your mess). 10. Window coverings If your window coverings are ugly, old, and not doing your house justice, or if they’re keeping too much light from streaming into the home, consider taking them down. Natural light is high on almost every buyer’s must-have list. You can purchase inexpensive drapes at any big box store that you can use to frame the windows – but remember to keep them open at showings, and to clean your windows first!
Mortgage interest rates hit their lowest levels for 2014 this week. The average interest charged to borrowers for a 30-year, fixed rate loan fell to 4.21% from 4.29% last week, according to Freddie Mac’s weekly mortgage rate report. Rates have not been this low since the week of November 7, when they were at 4.16%. The 15-year, fixed rate mortgage, a popular loan for homeowners refinancing existing mortgages, hit 3.32%, down from 3.38% last week.
What Home Buyers Don’t Know Could Cost Them Date:June 27, 2013 | Category:Finance | Author:Vera Gibbons With the housing recovery now well underway — housing starts are up; builder confidence is at a 7-year high; there are fewer foreclosures; and home prices continue to rise — you may be inspired to get off the fence and buy that dream home. But are you really prepared? Here are a few things you may not know — and what you don’t know could potentially cost you. Credit score When was the last time you checked your credit score? Any idea how good or bad it is? Are there any errors on your report that need to be fixed? Long before you begin to house hunt, you need to know where you stand. The higher your score, the better your interest rate. Get a copy of your report — for free — at www.annualcreditreport.com. Mortgages An astounding one-third of home buyers surveyed by Zillow are ill-prepared to get a mortgage. Among the findings: 34 percent of first-time home buyers are not aware that it is possible to get a home loan with a down payment of less than 5 percent; 26 percent of home buyers incorrectly believe that they are obligated to close their loan with the lender that pre-approved them; and 24 percent incorrectly believe that the best interest rates and fees can always be found through the bank where they currently do business. You have to shop around! Get multiple quotes, understand rates and fees, and read lender reviews online. Competition With the number of homes for sale at historically low levels, all-cash buyers — typically investors eager to renovate and resell or rent out homes — are jumping into this rapidly rising market. And they’re swooping up homes like there’s no tomorrow! Don’t underestimate this deep-pocketed competition, but don’t take unnecessary risks (such as waiving inspection contingencies, for example), either, simply for the sake of getting your piece of the American Dream. You may be inviting trouble, and that trouble could be costly. Price Yes, you guessed it. Because there’s not much to look at these days (just a few months’ supply in some markets!), and you’re up against stiff competition, you could easily end up paying more than you bargained for. Don’t bust your budget! Your monthly mortgage payment should be 25 percent or less of your monthly take-home pay. Run the numbers using Zillow’s mortgage calculators. Related: 4 Real Estate Trends for Summer 2013 Remodeling? Avoid These Costly Mistakes Fatten Up Your Wallet This Summer Vera Gibbons is a financial journalist based in New York City and is a contributor to Zillow Blog. Connect with her at http://veragibbons.com/. Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
30-Year Fixed Mortgage Rates Spike 50 Basis Points to Highest Levels Since July 2011 Date:June 25, 2013 | Category:Finance | Author:Alexa Fiander Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.38 percent, up from 3.88 percent at this same time last week. The 30-year fixed mortgage rate hovered between 3.82 and 4 percent late last week, before spiking near the current rate over the weekend. This represents the highest rate on Zillow Mortgage Marketplace since July 2011. “Last week rates spiked to levels not seen since July 2011 after Federal Reserve Chairman Ben Bernanke reiterated the Fed’s commitment to scale back its stimulus program later this year,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This coming week, we expect rates will be volatile as the market recalibrates and determines whether we’ve reached a new plateau near 4.5 percent or whether this week’s rate spike was an overreaction that warrants a downward adjustment.” Additionally, the 15-year fixed mortgage rate this morning was 3.41 percent, and for 5/1 ARMs, the rate was 3.18 percent. What are the rates right now? Check Zillow Mortgage Marketplace for up-to-the-minute mortgage rates for your state. *The weekly rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.
Real Estate Investing: Why Cash Flow Is King Date:June 21, 2013 | Category:Tips & Advice | Author:ProfessorBaron.com As real estate values rise nationwide and many properties listed for sale are being fought over by investors and home buyers, it seems that, once again, investment property buyers are paying outrageous prices for properties. Anyone recall this phenomenon in 2004, 2005 and 2006? An “outrageous price” is one that is way too high considering the cash flows the rental property can generate. These negative cash flow properties are rarely profitable investments, compared with other investment options a buyer could have chosen. Experienced real estate investors only buy properties that are cash-flow positive — based on conservative estimates — and skip those pesky negative cash flow deals. Note that those negative cash flow properties are typically the fancy prize properties in town; you know, the location, location, location properties. Penciling out a deal The main reason investors keep paying these high prices is because 95 percent of them acquire properties without doing any financial analysis to determine whether the property will actually produce decent investment returns. Instead, they hope that a property will go up in value, they’ll sell it and make a bundle. Unfortunately, that scenario rarely happens. As an example, let’s say an investor buys a $125,000 house by investing cash equity of $40,000 (25 percent down payment plus closing costs and rehabilitation costs) that generates rental income of $1,200 per month. The mortgage plus other operating expenses total $1,015 per month. So the rent less all the expenses leaves $185 of positive monthly income, or $2,220 per year. If we divide this $2,220 annual cash flow by the $40,000 initial cash investment, it calculates to a cash-on-cash return of 5.55 percent — a pretty fair deal on a decent real estate investment. Additional perks Only about half of the properties in a general marketplace would generate positive cash flows and a decent, actual return such as 5.55 percent. In actuality, real estate investing is much more complicated than just penciling out your cash-on-cash return, but that analysis is a good start. And with that nice positive cash flow, you also will get some extra return yield as a result of the amortization of your mortgage. Plus you probably will get some tax benefits and possibly some appreciation in value too. Cash flow is king, and if you buy positive cash flow properties, you will feel like royalty each month as your bank account balance builds up and you earn wealth over the years! Related: 3 Things That Make the Best Real Estate Investment The 6 Worst Types of Real Estate Investments Are You Ready to Be a Landlord? Leonard Baron, MBA, is America’s Real Estate Professor®. His unbiased, neutral and inexpensive “Real Estate Ownership, Investment and Due Diligence 101” textbook teaches real estate owners how to make smart and safe purchase decisions. Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
More Young Couples Say ‘I Do’ to Buying a Home Before Marriage By Graham Wood | Posted Apr 18th 2013 3:56PM First comes love … then comes a house … then comes marriage. Getting hitched may not be the ultimate sign of commitment these days as more and more couples opt to buy a house together before walking down the aisle, new research shows. Nearly 1 in 4 married couples ages 18 to 34 purchased a home together before getting married, according to a recent Coldwell Banker Real Estate survey released this week. That compares to just 14 percent of married couples ages 45 and older. That’s a reflection of millennials’ shifting attitudes toward commitment, said psychotherapist Dr. Robi Ludwig. “People are very commitment oriented, but millennials are much more pragmatic,” she told AOL Real Estate. “I think millennials are saying that if we want to have the life we want, we need to make smart decisions early on. … The home becomes the new engagement ring — and in some ways, the new wedding.” It’s not that these young couples are less committed by putting the purchase of a house before a wedding. According to the Coldwell Banker survey, 80 percent of all married couples who bought a home together at any stage of their relationship said that purchase strengthened their bond more than any other purchase they’ve made. (The survey of 2,116 adults was conducted March 8-12, reported USA Today.) For Zina Miranda and her fiance, Steve Roman, both 24 (and both pictured at left), buying a house was the next logical step after getting engaged. They’re not due to marry until May 2014, but this June will mark their five-year anniversary, and they were just ready to take the real estate plunge. The couple recently bought a house in Patchogue, N.Y. “We got engaged, and I was like, ‘OK, let’s start looking [for a house],” Miranda told AOL Real Estate. “It was just a really good opportunity to buy a house. We had been saving a long time.” Does she think that buying a home proves their commitment to each other even more than getting married? “On some level, yes,” Miranda said. The couple’s venture into homeownership is doubly important to them: It’s the first time they’ve lived together. “This is the house I could live in through the rest of my life,” she added. While that might be a beautiful thing for young couples in love, the legal ramifications of buying before marriage could be a little uglier. John Braun, a real estate attorney at Thomas Law Group in Minneapolis, said that he has one word of advice for couples buying a home before marriage: Don’t. If you buy a home before marriage, Braun explained, you basically sign a contract that gives you both equal ownership of the house, but not joint ownership (at least until marriage). In the event one of the partners dies, their share of the house goes to their heirs, not the other partner. And if you never make it to the altar and break up, well, “you are left owning a piece of property with someone who is wishing that you would die,” Braun joked. “When I am not scaring people away from [buying a house before marriage] altogether, I usually recommend that they have an agreement that governs their ownership interests whatever happens,” he said. “This kind of contract sets forth the contributions made by each party, establishes a right of either party to demand that the property be sold and makes a bunch of other decisions by agreement in advance that are impossible to make by agreement when the parties hate each other. This is an area where an hour or two with an attorney can really pay off in the long run; untangling these interests down the road is a time-consuming — and expensive — undertaking.”
By Les Christie @CNNMoneyApril 18, 2013: 2:59 PM ET NEW YORK (CNNMoney) The housing market has made a big comeback over the past year; home prices have surged some 8% and homebuyers can’t seem to buy up properties fast enough. But just as quickly as the market is gaining ground, some industry experts worry it will come crashing back to Earth. Here are three reasons the housing market recovery may not last: 1. The housing recovery is being led by investors. One problem is that investors are leading the latest surge in home prices, said Dean Baker, co-director of the Center for Economic and Policy Research. They are taking advantage of low interest rates and depressed home prices and when those rates and prices rise, they’ll likely pull back, he said. “An investor-driven boom is likely to end badly,” said Baker. “I’m worried that some of the big jumps in prices are driven by the same sort of speculation that drove the [original] housing bubble.” And while institutional investors and small but experienced mom-and-pop outfits have been buying many of the properties, there are a growing number of inexperienced “armchair investors” now buying into the boom — a sign that demand may be peaking, Baker said. Related: Buy or rent? 10 major housing markets In some hot markets, home prices should start slowing or even reverse gains. In Phoenix, where selling prices were up 23% year-over-year in January, many investors planned to rent out the properties they bought. “Yet, there was no comparable increase in rents and the rental vacancy rate in Phoenix is very high,” said Baker As investors realize a low rate of return on their investments, demand will soften, he said. 2. The economic recovery is just not strong enough yet. “These days, I worry more about the economy hurting housing than housing hurting the economy,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a Washington D.C.-based think tank. He’s especially concerned about employment. Hiring slowed significantly in March, with just 88,000 jobs added — the weakest showing since last June. Related: Was your home a good investment? Meanwhile, half a million Americans withdrew from the workforce during the month; either because they stopped looking for work or retired and stopped drawing unemployment. Many were discouraged workers, a sign that the economy remains weakened. While Bernstein thinks the housing recovery will continue, he believes it will do so at a much slower pace. Once the jobs picture improves, he said strong pent-up demand for homes should emerge. 3. Government cuts will hurt homeowners. Headwinds from the current round of government spending cuts — $85 billion worth — could also curb the housing market’s recovery. “The spending cuts from the sequestration [will] hit their apex this summer,” said Mark Zandi, the chief economist for Moody’s Analytics. The cuts, including unpaid days off for federal workers, cuts in unemployment compensation and decreased military spending, combined with the expiration of payroll tax breaks earlier this year, will lead to job and income losses that could strip about a percentage point off the GDP this year, according to Bernstein. Related: 5 best markets to buy a home And while current mortgage rates remain extremely low, about 3.5% for a 30-year, fixed-rate loan, they’re bound to go up, the industry experts said, making it a lot more costly for people to afford homes. “I’m worried that it’s too tough for many people to make the family budget, including the mortgage payment,” said Bernstein. 3 reasons the housing recovery may not last
Go Green Up Top With a Living Roof Date:April 18, 2013|Category:Tips & Advice|Author:Erika Riggs For thousands of years humans relied on natural roofs — made from sod, mud or straw — to keep their homes cool in the summer and warm in the winter. Today, “living roofs,” the next generation of those earlier thatched roofs, are slowly sprouting up throughout the U.S., primarily in cities where green space is limited and the benefits are more substantial. This recently sold home in Walla Walla, WA features a living roof. Alternatively called green roofs or vegetated roofs, living roofs are exactly as they sound: roofs that contain plants and a growing medium (special soil mix) rather than shingles, brick or asphalt. Living roofs can vary — from a lower-maintenance roof with drought-resistant plants or pre-planted modules to a roof set up to grow full grasses or gardens. Benefits of green roofs Living roofs’ benefits are primarily environmental, especially in larger cities: The roofs can absorb water runoff, reduce the heat emitted by buildings, keep buildings cooler and offset carbon emissions. In New York, green roofs have been particularly embraced. “From an environmental standpoint, NYC has significant stormwater problems, so creating more permeable space is a positive,” said Chris Brunner of New York Green Roofs. “Heat island issues [where urban areas have higher temperatures than surrounding areas] are enormous in NYC, and it also helps mitigate that.” New York City also needs solutions to manage water runoff. Each year, more than 27 billion gallons of untreated sewage enters the New York Harbor alone when stormwater runoff floods city sewers. The appeal of green roofs even led New York City Mayor Michael Bloomberg to previously offer one-time property tax abatements for owners who installed green roofs. And of course, adding green to the Big Apple’s concrete jungle is also appealing. “In New York City there’s not a lot of real estate left on the market, and it’s good if you can start capitalizing on the tens of thousands of rooftop space available, [something] that makes it so people can interact with a new sort of environment,” Brunner said. Cost and maintenance By far the biggest drawback of a living roof is the cost. According to the Environmental Protection Agency, costs start at $10 per square foot for simpler extensive roofing and go up to $25 per square foot. But most homes are not prepped for a living roof, and redoing the structure can drive up the cost even further. Different plants, such as the ones on this Charlotte, NC home’s roof, require varying amounts of maintenance. “If it [a building] wasn’t constructed with that purpose in mind, it would have to be checked out by a structural engineer,” said Damon Shelton, one of the founders of Element Smart Roofing in Seattle. “Most homes older than five years aren’t equipped to handle that kind of load.” Shelton’s company installs roofs made of pre-planted modules that layer over a membrane and slipcover. As far as living roofs go, those don’t require a lot of maintenance. “It’s set up so you don’t have to be an expert gardener to have a life roof,” Shelton said. “A lot of people shy away from the roof because of maintenance. You wonder, will these roofs live?” The maintenance is ultimately design dependent, Brunner says. “There’s a difference between low-maintenance roofs and ones designed to be more intensive.” Building trend This Seattle residence has a green roof just on its garden shed. Ultimately, the green roof movement is in its infancy, Brunner and Shelton say. “They’ve been doing green roofing and solar roofing in Germany,” Shelton said. “Seventy percent of their country has converted, but they’re way ahead of everyone else.” Brunner hopes that as the movement grows, the technology will improve and costs will go down. “The cost is going down, I can say that for being in the business for almost 7 years,” he said. “Supply lines are getting better, availability is getting better and competition is getting better. Green roofs are a great solution. It’s a fantastic technology, and it works very well.” Related: Green Home Trends: From Baby Steps to the Extreme Homes for Sale With Gorgeous Gardens Landscape in Small Spaces With Container Gardening
Mortgage Accessibility, Meeting Housing Demand Among Top Priorities for Housing Experts Date:April 19, 2013|Category:Housing Forum|Author:Cory Hopkins The housing recovery is on firm ground as buyers return to the market in droves and U.S. home values continue their more than year-long upward march. But stagnant income growth and a lack of flexible mortgage finance opportunities for home buyers are among the main concerns going forward, top economists and policymakers said recently at the Zillow-sponsored Forum on the Future of Housing. The forum, held April 18 at the Newseum in Washington, DC, and produced by Zillow in partnership with the American Action Forum and Progressive Policy Institute, attracted more than 250 attendees to listen to a series of panel discussions and keynote addresses featuring elected officials, leading housing-related association heads and housing analysts. Among the highlights were comments from Sen. Johnny Isakson (R-GA) and Sen. Jeff Merkley (D-OR), who each spotlighted the need for mortgage reform that is safe, sustainable and fair to borrowers and private lenders alike. “We didn’t have a down payment recession, we had an underwriting recession,” Isakson, a former real estate agent for more than 30 years, said during his conference-opening address. Underwriting standards supported by government-sponsored entities (GSEs) Fannie Mae and Freddie Mac prior to the housing recession helped inflate the housing bubble by sacrificing loan safety for profit, Isakson said. He has proposed phasing out the federal backstop role in the secondary mortgage market over 10 years, leaving a single, private company that’s created to eventually replace Fannie and Freddie. Keynote address by Johnny Isakson, United States Senator (R-Ga) In the forum’s closing address, Merkley echoed his Senate colleague’s concerns over Fannie and Freddie’s pre-bubble excesses. “We should never again let the humble, amortizing, fixed-rate mortgage become a predatory instrument,” Merkley said. “We can’t afford to get GSE reform wrong. We can’t afford to return to the former Fannie and Freddie model of private gain, public pain.” Keynote address by Jeff Merkley, United States Senator (D-Ore) The first panel discussion focused on the future of housing demand. It was moderated by CNBC real estate correspondent Diana Olick and featured Eric Belsky, managing director of Harvard University’s Joint Center for Housing Studies (JCHS); Mark Calabria, director of financial regulation studies at the Cato Institute; Doug Holtz-Eakin, president of the American Action Forum; Jerry Howard, CEO of the National Association of Home Builders (NAHB); and Richard A. Smith, chairman, CEO and president of Realogy Holdings Corp. The panel agreed that rising home prices are a boon to current homeowners but could present an obstacle for future buyers as income growth stagnates while prices keep escalating. Much of the discussion also focused on the current role of large and small investors in the housing market and how much of an impact they will have going forward. “Dismiss the idea that this is an investor-driven recovery,” Realogy’s Smith said. “It’s not.” Howard of the NAHB cited rising household formation rates as an indicator of solid future demand for housing, particularly at the first-time home buyer level. But he also said builders are having difficulty creating supply to meet this nascent demand, as lending standards for land acquisition and development for builders remain incredibly tight. Other panelists pointed to growing demographic diversity, increasing urbanization and the enormous size of the so-called “echo boom” generation as future drivers of housing demand. Panel on The Future of Housing Demand moderated by CNBC’s Diana Olick. Nick Timiraos of the Wall Street Journal moderated the second panel, focused on the future of mortgage finance. Panelists included Mike Fratantoni, vice president of the Mortgage Bankers Association (MBA); Jason Gold, senior fellow for financial markets at the Progressive Policy Institute; Laurie Goodman, senior managing director at Amherst Securities Group L.P.; Chris Mayer, Paul Milstein professor of real estate at Columbia Business School; and Scott Simon, managing director of Pacific Investment Management Co. (PIMCO). The capacity of lenders to actually make loans was a major topic. PIMCO’s Simon said loan capacity was down 45 percent, largely because several of the largest lenders in the country, including Citibank and Bank of America, have essentially stopped writing mortgages. Fratantoni of the MBA said much of the reluctance to write loans can be attributed to the very low margin for error among lenders facing harsh and costly penalties for regulatory non-compliance. “The mortgage industry used to be like a factory that made sweaters. Every now and then, you got a few that were imperfect, and had a few threads loose, but it was mostly OK,” Fratantoni said. “Now, the mortgage industry is a factory that makes jet engines. And nobody wants an imperfect jet engine.” Mayer said the mortgage industry could benefit from improving technology, as other industries have, but has so far been slow to adopt new, digital evaluation, underwriting and management processes. He also advocated for portable mortgages, which could be carried throughout a homeowner’s lifetime as they move from home to home. All panelists said they were concerned that rising mortgage interest rates may disrupt the mortgage market in coming years, making mobility more difficult and dampening demand for adjustable-rate mortgage products that are likely to become more expensive over time, not less. Panel on The Future of Mortgage Finance moderated by The Wall Street Journals’ Nick Timiraos Thanks to everyone who attended our Forum on the Future of Housing. Please check back here next week, when we will have an on-demand video of the forum available. For Zillow Chief Economist Stan Humphries’ full PowerPoint presentation highlighting the national housing market please click here.