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» VISIT US ONLINE @ DSNEWS.COM 17 HOW DOES HOMEBUYING POWER STACK UP ACROSS ETHNIC GROUPS? For a new report, Zillow calculated buying power among major ethnic and racial groups to see what percentage of each group could afford a median-priced home on the median salary for their group without spending more than 30 percent of their income on housing. Homebuyers in 2017 were able to afford nearly three-quarters of homes available for sale during the year, according to Zillow. However, buying power was not uniform across all groups. "Distinct racial and ethnic gaps in homeownership exist nationwide, which could have long-lasting implications for future generations," said Aaron Terrazas, Senior Economist at Zillow. Asian buyers fared best, able to choose from 85.2 percent of homes. White buyers had the second-greatest buying power, able to afford 77.6 percent of homes for sale. Hispanic homebuyers could afford 64.9 percent of homes available. Black homebuyers had the fewest options, able to afford just 55.3 percent of the homes available for purchase. It's a disheartening statistic as the nation marks the 50th anniversary of the Fair Housing Act of 1968. "e divide between black and white Americans has proven stubbornly persistent across the long arc of American history, visible in incomes, accumulated wealth, and homeownership," said Terrazas. Zillow reported the gap between black and white homeownership has widened since 1900, increasing from 27.6 percent to 30.3 percent. is is "despite years of policy efforts," according to Zillow. is gap is significant because homeownership is an important source of wealth-building in the United States. In fact, Zillow noted "more than half the overall wealth of American households is held in their primary residence." Furthermore, "Black and Hispanic homeowners rely on their homes for wealth more than white homeowners do." When examining market-level data, Zillow found that black homebuyers had less buying power than other major groups in all but three of the largest 35 housing markets in 2017. In the New York/Northern New Jersey, Houston, and Boston markets, black homebuyers had slightly more buying power than Hispanic buyers. In six of the largest 35 markets, black homebuyers could afford less than one-fourth of homes for sale. FANNIE MAE DELIVERS MIXED ECONOMIC AND HOUSING FORECAST In Fannie Mae's April 2018 Economic and Housing Outlook report, the GSE has projected higher numbers across the board in housing prices, starts, and originations in all four quarters of 2019, compared to those in 2018. Projections for the second, third, and fourth quarters of 2018 are higher than their corresponding quarters in 2017 for housing starts, sales, and prices. All cobbled together, there were 1.2 million housing starts and sales in 2017 and Fannie predicts there will be almost 1.29 million by the end of this year. e 2019 numbers in April's report look to finish around 1.3 million. Fannie expects interest rates on fixed mortgages to rise to 4.5 percent by year's end, and remain consistent throughout 2019. It projects a steady climb on adjustable-rate mortgages into Q2 of 2019. Fannie Mae reported that ARMs are projected to climb quarterly from the current 3.6 percent until they hit 4 percent next year, before remaining steady. Mortgage originations are the only category that looks to keep dropping. In 2017, the GSE reported originations totaling $1.84 trillion; 2018 is expected to close with about $1.7 trillion, and 2019 with slightly less. e report expects full-year 2018 economic growth to come in at 2.7 percent, "even as downside risks stemming from trade policy have risen.". at's one-tenth lower than its previous forecast of 2.8 percent, and it follows a greater-than-expected slowdown in first- quarter growth. "Lackluster consumer spending in January and February, following an unsustainable fourth-quarter pace, drove the slight downgrade, though tax refunds and reduced withholdings are expected to boost consumer spending in March and the months ahead," the report stated. "Elsewhere, economic fundamentals remain strong, with healthy income growth, optimistic consumer and business sentiments, and fiscal stimulus stemming from tax reform and the federal spending bill likely to lift demand." "Increasingly heated rhetoric on trade" was the reason why the GSE was more guarded about what the future will bring, according to Doug Duncan, Chief Economist. "If rhetoric becomes reality, a trade war could reverse much of the upside from the recently passed fiscal stimulus, or it could trigger an even worse outcome: recession," said Duncan. "reats and counter-threats aside, economic growth should pick up this quarter amid a rebound in consumer spending and business investment growth, in addition to a healthy labor market. Soft residential investment last quarter should prove temporary, as home sales resume their slow upward grind, with inventory shortages playing friend to prices but a foe to affordability and sales."

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