Magazine article American Banker

Housing Study Urges Shoring Up of Inner-City Market

Magazine article American Banker

Housing Study Urges Shoring Up of Inner-City Market

Article excerpt

A leading housing expert is calling on banks, mortgage companies, and secondary market agencies to help halt what he calls an alarming destabilization of large urban housing markets.

William Apgar, executive director of Harvard University's Joint Center for Housing Studies, issued the call as the center prepared to unveil its widely followed annual report on the state of the nation's housing market.

The report, due to be released today , says urban problems are intensifying rapidly because of the success of housing markets in suburbia. Families with sufficient income are fleeing inner cities to buy homes in the suburbs, leaving the urban markets with mostly lower-income renters, he said.

"It's very important to diversify the income base of urban neighborhoods, and to do that we have to make homebuying a possibility," Mr. Apgar said in an interview.

Homebuying fairs and programs such as Fannie Mae's homeownership initiative have showed encouraging results, he said. "But will there be enough follow-through?" he asked.

Mr. Apgar said mortgage lenders should be taking advantage of business opportunities in inner cities, which he characterized as significant. "There is a pool of minority and immigrant loans there, offering bankable loans. Lenders looking at cities are finding a lot more than they expected," he said.

In recent years, a number of top mortgage executives have turned to the annual Harvard studies for guidance on major trends, especially in the market for lower-income housing.

This year's report finds that, despite the problems resulting from homeowners' flight from the cities, the nation's housing market is strong. The number of homeowners continues to grow at a record pace, the study reports, with 1995's addition of 1.7 million homeowners, representing the largest single-year increase in two decades.

Lower interest rates and declines in real estate values nationwide are helping to make purchasing a home more affordable, the study said. …

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