CORELOGIC, A LEADING PROVIDER OF DATA SERVICES, has released its monthly Home Price Index report for June. It seems clear, at least on a national level, that skyrocketing home values are cooling and appreciation levels seem to be coming back to Earth.

Nationally, home values increased at a year-over-year rate of 7.5 percent in June. CoreLogic is now forecasting a 5-percent increase in year-over-year values between June 2014 and June 2015. The California market posted strong year-over-year gains of 11.3 percent — significantly weaker, however, than a year ago, when values in most areas of the state were increasing at rates higher than 20 percent. Despite 28 straight months of appreciating values, California is still down 15.6 percent from its peak in May 2006.

Time passes so quickly. It’s hard to imagine that it has been eight years since the housing market peaked and began a historic slide into the abyss, taking down an entire global economy and nearly plunging the world into depression. Millions lost their homes through no fault of their own, and millions more simply chose to walk away.

As a result of the crisis, lending standards are tighter now than at any time in history. The government has created new regulations and laws to protect the consumer. At the core some of these ideas, like Ability to Repay regulations, is common sense. At their worst, some are stifling and will prove in the long run to limit access to mortgage funds for low- and moderate-income folks who simply want a chance at home ownership.

Increased regulations and lack of clarity from regulators has created mushrooming compliance costs for lenders, which are passed to the consumer in the form of higher fees and rates.

Left with little clarification from regulators, lenders are forced to choose how to best implement the new regulations. This has created a broad playing field, with different interpretations leading to different business strategies for everything from borrower qualifications to loan officer compensation.

How can a system work when the best strategy is to watch as other lenders are audited and either passed or punished for implementing policies that they thought were compliant?

Millions who lost everything during the Great Recession are still struggling to regain their economic footing. I encounter these folks almost every day. Instead of designing programs to help them, the government keeps making it harder. Just a couple of weeks ago Fannie Mae announced that borrowers with a previous short sale would now have to wait seven years before obtaining another loan backed by Fannie, regardless of how much they have for a down payment. Previously, borrowers who had sold their home through the short sale process could look at trying again after just two years if they had a down payment of at least 20 percent.

Home value appreciation is slowing and will likely cool down to a modest 5 percent over the next year. This is healthy and if sustained will be good for the overall economy. Let’s hope we can provide enough opportunity for enough people to sustain healthy growth rates over the long run.

Guy Benjamin (CAL BRE License #01014834, NMLS 887909) writes a weekly column for The Herald, offering general information on real estate matters. As it is impossible to address all possibilities and variations, he will try to answer individual questions by readers who contact him at 707-246-0949 or gbenjamin@rpm-mtg.com.

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