FHA Chief Offers Encouragement to Colorado Realtors
The chief of the Federal Housing Administration says he’s optimistic about the future of the housing market. The FHA’s David Stevens even went so far as to say he’s “bullish” about the recovery while addressing a rally of Colorado realtors in Denver.
Long before becoming assistant secretary of housing and head of the FHA, David Stevens cut his teeth in the industry in Colorado.
A graduate of the University of Colorado at Boulder, he went on to work here as a mortgage broker in the 1980's…not exactly a boom time for this region. So Stevens’ speech before an annual gathering of Colorado real estate agents called the "Realtor Rally" was part policy, and part pep talk.
"Markets recover," he said. "And as long as we go under this understanding that markets do recover, it’s a great way to be thinking about the future because it gives you the ability to plan as long as you understand what’s coming ahead. "
Stevens said the industry needs to regain trust with the so-called echo boomers. These are the baby boomers’ kids, people aged 14-34. Many of them are just set to enter the market for the first time. They outnumber their parents’ generation. But Stevens says he worries that many – including his own daughter – are ready to become lifers on the rental market, given the bursting of the housing bubble in 2008.
Stevens also defended the Obama Administration against criticisms that it's become anti-homeownership. He said instead FHA officials are looking at ways to allow the private sector to take over most home loans and only let agencies like his step in during times of crisis. The government currently backs all but a tiny fraction of all home loans.
"The more we can find ways for the private sector to re-engage, and if we think about a safe, steady, and careful transition that doesn’t disrupt the housing market, we can go back to a time when the private sector used to play a large role," Stevens said.
Most of the rest of Stevens’ speech was focused on giving examples of encouraging signs and indicators in the housing market. The metro Denver and northern Front Range markets are starting to rebound. But like much of the rest of the country, high unemployment and weak consumer spending persists.
Not exactly the recipe for a strong and quick recovery, says economist Patricia Silverstein, of the Jefferson County based real estate analysis firm Development Research Partners.
"We still have a long ways to go to get back to those good old days and indeed if that’s our barometer we’re going to be sorely disappointed as of yet," she said.
Still, Silverstein told the room of mostly real estate agents they should focus on the positives – the market has at least bottomed out and is on the rise. Other analysts at the event warned that government spending and what they called over-burdensome regulations could also hamper a recovery.