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77 77 77 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal Follow Us At: @DSNewsDaily ing in urban communities of color. eir Fannie Mae contract will support their Last Mile Network project, setting the stage to expand the modular micro-factory concept to Prince George's County, Maryland, and Richmond, Virginia. Each facility will train new entrants in the construction trades, securing good-paying jobs while creating affordable housing and enabling Black homeowners and renters to build wealth. RENEWABLE ENERGY GOALS WILL DEFINE FUTURE OF HOUSING POLICY e Biden-Harris Administration has released a new U.S. National Blueprint for decarbonizing transportation to attain their goal of cutting all greenhouse gas emissions by 2050 for transportation. e blueprint was jointly developed by the Department of Housing and Urban Devel- opment, the Department of Energy, and the Environmental Protection Agency. is is another continued effort by the administration to address changing climates and develop alter- native energy independence. Representing the agency, HUD Secretary Marcia Fudge said the blueprint is the first de- liverable milestone of a memorandum signed by the individual agencies last year. Following the blueprint will be more detailed decarbonization action plans—and how they relate to the future of housing—that can be acted upon by all levels of government. "e people HUD serves deserve clean, affordable transportation options," said U.S. Housing and Urban Development Secretary Marcia Fudge. "HUD is proud to join our federal partners at Energy, DOT, and EPA to ensure that clean transportation investments are made equitably and include communities and households that have been most harmed by environmental injustice. We look forward to working together to better align transportation, housing, and community development invest- ments in these and other communities across the country." e transportation sector—which includes all modes of travel through land, air, and sea to move people and goods—accounts for a third of all domestic greenhouse gas emissions, negative- ly affecting the health and well-being of millions of Americans, particularly those in disadvan- taged communities. Transportation costs are the second largest annual household expense in our country and for the poorest Americans, the financial burden of transportation is dispropor- tionately and unsustainably high. A well-planned transition to a decarbonized transportation system can address these and other inequities and provide equitable, afford- able, and accessible options for moving people and goods. Further developing and deploying clean-energy technologies such as electric vehicles and hydrogen and sustainable fuels, while also building out the supporting infrastructure for clean transportation, will create good-paying jobs in all segments of the transportation sector while strengthening America's energy independence. FANNIE MAE: HOUSING MAR- KET MAY BE MORE VULNER- ABLE THAN PROJECTED According to a new Fannie Mae housing report, single-family housing was an unintended beneficiary of the pandemic and its associated policy response. Data found that during the pandemic, mortgage rates reached historically low levels, with the average 30-year fixed mort- gage rate hovering around 3% through the end of 2021. Despite a low inventory-to-sales ratio during this period by historical standards, as well as rising home prices, both home sales and purchase mortgage originations reached record highs in 2021. Anecdotal and analytical evidence suggests that the pandemic prompted people to move from smaller housing units in high-density city centers to larger homes in lower-density areas, and this was particularly true of first-time homebuyers. Our researchers studied this phe- nomenon, and our survey findings illustrate the primacy of financial considerations over the ben- efits of physical space and location in influencing homebuying behavior during the pandemic. Overall, the rise in home sales was fueled by both first-time homebuyers and move-up buyers. In fact, demand was so strong that the median number of days that homes were on the market shortened from 74 in 2017 to 46 in 2021. We are now in a different phase of the economic and housing cycle. From the end of 2021 through September 2022, mortgage rates increased from 3% to over 7%. is rapid rate increase contrib- uted to the pace of total home sales declining from an annualized pace of over 7 million units in January 2022 to approximately 5 million units in October 2022. e latest Fannie Mae forecast doesn't expect the annualized pace of total home sales to exceed five million units again until 2024. One outstanding question from the pandemic-related boom in home sales regards what actually drove purchase demand to increase so substantially. Were buyers motivated more by physical space or financial considerations, or was it a combination of both? In 2021, Fannie Mae conducted two survey studies among consumers who purchased a home for primary residence during the pandem- ic. e responses in those surveys help to explain why home sales declined in 2022 and continue to inform our outlook for the years ahead. Fannie Mae conducted a telephone survey in Q1 of 2021 among homeowners in Fannie Mae's Single-Family Guaranty Book of Business with primary-residence purchase mortgage loans originated in 2020. Respondents were asked if they accelerated their home purchase due to the COVID-19 pandemic or because of low interest rates. Some 56% of respondents said the pandemic itself neither accelerated nor slowed their home purchase timeline. Among first-time homebuyers, nearly 30% said it accelerated their home purchase decision, compared to only 13% of repeat homebuyers (often described as move-up buyers). In contrast, the impact of low interest rates on home pur- chase timing was much stronger than the impact of the pandemic, especially among first-time homebuyers. Some 48% of homebuyers said they accelerated their home purchase because of low interest rates, compared to 21% saying they did so because of the pandemic. Among first-time homebuyers, 53% said they navigated the homebuying process faster because of low interest rates, compared to 29% saying they did so because of the pandemic.