O
n a recent episode of "Real Estate Insiders Unfiltered," hosts James Dwiggins and Keith Robinson sat down with Pete Mills, senior vice president of residential policy at the Mortgage Bankers Association (MBA), to discuss the housing affordability crisis in today's complex real estate market.

    The conversation covered various topics, including fluctuating interest rates, changes to the VA loan program, buyer agent compensation for interested party contributions through Fannie Mae and Freddie Mac, Kamala Harris' housing plan, and common financial issues affecting buyers and sellers. Mills also shared insights on how local governments are addressing low inventory and lagging home sales.

    Mills began by sharing his background in economics, which led to a 40-year career in the industry, including stints at the Federal Reserve Board and private companies like Countrywide Financial. The discussion then turned to the difference between concessions and interested party contributions, with Mills confirming that IPCs are largely unaffected if sellers pay buyer agent fees through closing.

    The trio also explored the idea of buyers financing their agent fees, which Mills warned would lead to higher loan costs, loan-to-value ratios, and mortgage insurance premiums. However, they agreed that sellers should pay buyer agent commissions, noting that veterans, minorities, and low-income buyers may be disproportionately affected by new systems.

    Mills noted that current homeowners will begin to move out of their low-rate mortgages following the recent Federal Reserve rate cut, freeing up inventory for buyers in the market. He forecasted two more rate cuts before the end of the year, which would create more opportunities for buyers and sellers due to pent-up demand and lock-in effects.

    The conversation concluded with Mills sharing his opinion on Kamala Harris' housing plan, praising its focus on increasing supply and down payment assistance for first-time buyers. He emphasized that targeted supply doesn't matter as long as more inventory hits the market, increasing homeownership opportunities.