A leading housing economist has expressed concern over the new(?) 3% Down Payment loan products that have been introduced by Fannie Mae and Freddie Mac. Robert Shiller, in an interview with CNBC as reported in National Mortgage Professional Magazine, indicated that the new products introduced recently by the GSEs create the possibility of problems for lenders and mortgage insurers. He cites the small margin for error (3%) as being the main area of concern. Shiller sees this as a problem area in light of the deceleration in housing prices in the recent past. Housing prices continue to 
rise, but at a much slower pace recently.
Shiller raised two other issues as concerns to the housing industry. He noted that the level of first time home buyers is lower than normal as millennials do not appear to be as interested in home ownership. Secondly, he sees the possibility that there may be a shift in the housing market to suburban and rural areas and away from urban areas. He points to the drop in gasoline prices as allowing people to commute a farther distance than in the past.
Robert Shiller is a co-founder of the Case-Shiller Home Price Index, an economics professor at Yale University, and a winner of the Nobel Prize in economics. He certainly has the credentials to forecast economic problems in the housing market. Is he right about the 3% down payment loan products from Fannie Mae and Freddie Mac?
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