Drop in Mortgage Rates Could Put Market in 2005 Territory

The recent plunge in mortgage rates may help the market for home loans surge to a 14-year high, according to recent housing forecasts. In the past month, mortgage rates have posted their biggest drop in a decade, with the 30-year fixed-rate mortgage averaging 4.08 percent last week, according to Freddie Mac’s weekly mortgage market survey.

The rate decline has enticed more home buyers to enter the market, prompting mortgage demand to reach its highest level since the fall of 2016. Mortgage applications jumped 18.6 percent last week as borrowers rushed to lock in lower financing costs. Mark Watson, director of forecasting for mortgage advisory firm iEmergent, predicts $1.2 trillion in home lending this year, which would be the best year since 2005. “We think the lower mortgage rates will create a huge push, partly from millennial buyers,” Watson told HousingWire. “That is going to support strong growth in home sales over the next several years.”

iEmergent projects a 3.9 percent increase in total home loan volume this year. That’s more optimistic than other forecasters, such as Freddie Mac, which is predicting a 1.5 percent increase in total mortgage lending for 2019, and the Mortgage Bankers Association, which predicts a 1 percent gain.

But the threat of higher mortgage rates is diminishing. The Federal Reserve announced at its January meeting that due to a slowing economy, it does not plan to raise its short-term key interest rates again this year. Therefore, mortgage rates will likely stay low for a while, which will bode well for the housing market, Watson says. “The benefits of the decline in mortgage rates that we’ve seen this year will continue to unfold over the next few months due to the lag from changes in mortgage rates to market sentiment and ultimately home sales,” says Sam Khater, Freddie Mac’s chief economist.

SOURCE: DAILY REAL ESTATE NEWS

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HUD Sues Facebook Over Housing Discrimination Allegations

The U.S. Department of Housing and Urban Development is suing Facebook over allegations that it violated the Fair Housing Act by allegedly restricting certain protected classes from viewing housing-related ads online. HUD alleges in the lawsuit that housing-related ads and services were “severely biased” by limiting views of housing-related ads to tens of thousands of users based on gender, ethnicity, religion, and other factors.

“Facebook is discriminating against people based upon who they are and where they live,” says HUD Secretary Ben Carson. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”

On March 19, Facebook announced several changes to remove features on its ad targeting features that had been under fire for claims over apparent discrimination. In that announcement, Facebook’s Chief Operating Officer Sheryl Sandberg said, “Advertisers offering housing, employment, and credit opportunities will have a much smaller set of targeting categories to use in their campaigns overall. Multicultural affinity targeting will continue to be unavailable for these ads. Additionally, any detailed targeting options describing or appearing to relate to protected classes will also be unavailable.” (Read more: Facebook Disables Targeting Options for Housing Ads)

Since its move, Facebook has required advertisers in the areas of housing, employment, and credit to use a separate portal to serve up their ads. The portal does not include gender, age, race, ethnicity, or religion as ad targeting options.

But HUD moved forward in its lawsuit against Facebook this week. In the lawsuit, HUD alleges Facebook allowed advertisers to exclude certain classes from seeing some housing-related Facebook ads, such as by allowing ads to classify groups as parents; non-American born; non-Christian; interested in Hispanic culture; or other protected groups under the Fair Housing Act. HUD also says Facebook permitted advertisers to exclude certain groups of people by drawing a red line around neighborhoods on a map.

Facebook uses prediction analytics that also causes it to exclude protected classes from seeing certain ads, HUD alleges in the lawsuit. Facebook combines data it collects on user attributes and behavior with data about user behavior on other websites to target its ads to certain groups, the lawsuit states.

“Even as we confront new technologies, the fair housing laws enacted over half a century ago remain clear—discrimination in housing-related advertising is against the law,” says HUD General Counsel Paul Compton. “Just because a process to deliver advertising is opaque and complex doesn’t mean that it exempts Facebook and others from our scrutiny and the law of the land. Fashioning appropriate remedies and the rules of the road for today’s technology as it impacts housing are a priority for HUD.” 

SOURCE: DAILY REAL ESTATE NEWS

Any questions or comments, feel free to contact James Y. Kuang at (626) 371-5662 or by email:  james@standardprosperity.com    

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