Forget the Open Floor Plan--It's Time to Bring Back Walls

The biggest unknown about the housing market next year is whether current negative trends, such as lack of housing supply, will persist or the market will adjust to the shock of higher mortgage rates and resume modest growth, according to  Freddie Mac ’s (OTCQB: FMCC) November  Forecast . Sam Khater, Freddie Mac’s chief economist, said, “Almost all the trends in the U.S. housing market have been negative in recent months as housing market activity continues to adjust to higher mortgage rates.” Khater added, “If new home sales are to resume growth in 2019, builders may have to shift their focus to more modestly priced homes and smaller sized homes to help offset housing affordability concerns. But with cost pressures pinching profitability, this will be a significant challenge.” Freddie's outlook: Expect GDP growth to average 3% in 2018 before slowing to 2.4% in 2019 and 1.8% in 2020. Expect total home sales to decrease 1.6% to 6.02 million in 2018 before slowly reg...

Rising rates and home prices will make it more difficult to buy or sell a home next year, according to realtor.com®'s 2019 housing forecast. According to the forecast, the 2019 housing market should see modest inventory gains, but with mortgage rates expected to hit 5.5% by the end of the year, monthly mortgage payments will rise 8%, putting home ownership more out of reach, especially for younger Gen-Z, Millennial and other first-time home buyers. Upscale homes in high-growth markets, however, will provide more opportunities for buyers. Hand-out Realtor.com 2019 housing forecast Other findings of the realtor.com® 2019 housing forecast include: • Home price growth will continue to slow, with a forecasted increase of 2.2%; • Inventory increases will remain moderate with less than a 7% increase; • High-priced markets will buck the trend, with double digit inventory gains; • Millennials will account for 45% of mortgages in 2019 vs. 17% for Boomers; • New tax plan will be good f...

A new proposal, created in part by the Federal Deposit Insurance Corp., calls for raising the threshold for homes that require an in-person appraisal, rather than an automated appraisal, from $250,000 to $400,000. If approved, this would be the first change to this threshold since 1994. Skipping a human appraisal could speed the closing process and save buyers and homeowners attempting to refinance about $500. However, both appraisers and real estate professionals note that automated valuation models, or appraisals conducted via computer, are not as reliable as human appraisals. Because they are based on an interpretation of data, they may not consider factors that the data doesn’t account for – such as the condition the home is in. "Automated valuation models are when you throw a lot of data in the hopper and flip the switch; it churns, and it spits out a value,"  says  New York  City–based real estate appraiser Jonathan Miller.  "[But] the problem with that is...

California's competitive housing market and low housing affordability forced home buyers to make compromises in their home purchases including price, size, location, and school quality, according to a new survey from the  CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)  out Monday. C.A.R.'s  2018 State of the California Consumer Survey , which examines the attitudes and behaviors of real estate consumers, reveals 44% of buyers bought a more expensive home than they wanted, 33% purchased a smaller home than desired, 36% purchased a home further from school/work than wished, and 30% purchased in an area where schools were of lesser quality. Hand-out California Home buyer Compromises by Generation "Well-qualified home buyers understand that buying a home can be challenging in a competitive housing market environment and they may not be able to buy the ideal home they want," said 2019 C.A.R. President Jared Martin. "Instead of finding a home that's a perfect ...

Freddie Mac has expanded its GreenCHOICE Mortgages program to include more financing options for families with lower incomes that are looking to make green and/or energy-saving home repairs and improvements. “Older homes tend to be more energy inefficient, which may raise the cost of homeownership and may make them more difficult to maintain,” said Mike Dawson, vice president of Single-Family Affordable Lending Strategy and Policy at Freddie Mac. “GreenCHOICE Mortgages is part of a multiyear initiative to facilitate energy-saving improvements that could help families better sustain homeownership. Freddie Mac is committed to making mortgage lenders and real estate agents aware of these products and the value they bring to the housing market.” At present, many traditional mortgage underwriting methods do not usually consider utility expenses and energy-efficient construction. The GreenCHOICE Mortgages program and the data it collects will help Freddie Mac develop and design valuat...

While it’s no secret that building professionals such as plumbers, framers, and electricians are in short supply across the U.S., another type of construction-related labor shortage is just as pressing but often overlooked: the lack of young people who are interested in building science. As the average age of code officials and other performance-driven construction pros rises, the need for young building scientists has become more serious. A recent National Institute of Building Sciences study for the  International Code Council  revealed a “mass exodus” of building safety professionals from the industry, with 80% of respondents saying they plan to retire within the next decade. Organizations are working to spark interest in building performance–related careers.  RESNET ’s two-year-old Emerging Leadership Council recruits and mentors pros who are passionate about home energy use, codes, and energy policy. The group has developed a  toolkit for rating providers ...

For those who serve avocado toast on Thanksgiving, here's some news on how to cater to the millennial palate, via  Bloomberg . Small birds are having a big moment. Tiny turkeys will increasingly grace Thanksgiving tables, thanks to the millennial generation’s ongoing campaign to remake American gastronomy. The  holiday  depicted by Norman Rockwell—Grandma showing off a cooked bird so plump it weighs down a banquet plate—is still common. But smaller families, growing guilt over wasteful leftovers and a preference for free-range fowl have all played roles in the emergence of petite poultry as a holiday dinner centerpiece. “People are starting to understand it’s not natural to grow turkeys up to 30 pounds,” said Ariane Daguin, co-founder and owner of D’Artagnan LLC, a wholesale and e-commerce food company in Union,  New Jersey . “In general, that means they were penned up with no room to move around, and that’s why they’re fat like that.”

Pollution levels in the immediate area of the Camp Fire in Paradise, Calif. are among the dirtiest in the world, according to data from the U.S. Environmental Protection Agency. Local officials report that respiratory hospitalizations have surged in the communities around Paradise, and elevated pollution levels have prompted school closures in  San Francisco  and air quality warnings in  Los Angeles , both hundreds of miles to the south. On top of the immediate dangers of smoke inhalation, medical researchers fear that the prolonged inhalation of wood fire particles can wreak lifelong havoc on the human immune system. The body creates zealous responses to what it sees as an alien presence, and those effects can last for years by priming the body to overreact when it encounters subsequent lung irritation, said Dr. Kari Nadeau, a pediatric allergy and asthma specialist at Stanford. In short, researchers like Dr. Nadeau believe that a person’s short-term exposure to...

ATTOM Data Solutions , Irvine, today released an analysis of the best days of the year to buy a home, which shows that only 10 days of the year offer discounts below estimated market value — seven in December, and one each in October, November and February. According to the analysis, buyers willing to close on a home purchase the day after Christmas realize the biggest discounts below full market of any day in the year. This analysis of more than 18 million single family home and condo sales over the past five years is evidence of the hot sellers' market of the past five years. "People closing on a home purchase December 26 were submitting offers around Thanksgiving and starting their home search around Halloween — likely not a common path to home purchase for most buyers and exactly why it's the best time to buy," said Daren Blomquist, senior vice president with ATTOM Data Solutions. "Buyers and investors willing to start their home search right about when ...

According to a recent report from the California Association of Realtors more Californians could afford to buy a home in the third quarter of this year. The group's Traditional Housing Affordability Index shows that 27% of  California  households could afford to purchase the $588,530 median-priced home in the third quarter of 2018, up from 26% in second-quarter 2018 and down from 28% a year ago. Considered the most fundamental measure of housing well-being for home buyers in the state, the index has been below 30 percent for five of the past eight quarters. The housing affordability index hit a peak of 56 percent in the first quarter of 2012. During the third quarter of 2018, the most affordable counties in California were Lassen (67 percent), Kern and Kings (51 percent), Tehama (49 percent) and Yuba (48 percent). Mono (11 percent),  Santa Cruz  (12 percent), San Mateo (14 percent),  San Francisco  (15 percent), and Santa Clara (17 percent) counties we...

The forecast for windows in the coming year and beyond is big units with an unobstructed viewing field, set in minimal frames of a dark hue. The aesthetic is unabashedly modern, and shapes are square and rectilinear. “I actually think the move towards modern—I use the term to mean clean and unfussy—is here to stay,” says Greenwich, Conn.-based designer and builder Sabine Schoenberg, host of  Sabine’s New House . To achieve the large window units that home buyers want, architects are mulling windows together, sometimes mixing shapes. Corner windows are a trend, says JELD-WEN’s Jennifer Matson. “For larger windows, like in living areas, fixed windows are just fine. We can make an inoperable window larger than one that operates. It just comes down to the weight of the glass.” “Everybody wants more glass and less frame,” says Joe LeFlore,  South Florida Millwork vice president. “Bigger is better. I got five plans today and every one is floor-to-ceiling windows.” LeFlore n...

Carrying student debt limits potential home buyers' budgets by $92,440, leaving fewer homes on the market they can afford, Zillow reported Thursday. The average monthly student debt payment for renters who plan to buy a home in the next year is $388, according to the Zillow® Housing Aspirations Report. The maximum priced home a buyer with student debt could afford is $269,400, if they spend no more than 30% of their income on combined housing and student debt. At this price point, they could buy 52.3% of homes currently listed for sale. For a buyer with no student debt seeking to spend the same share of income, the buying limit would increase to $361,800, and they could afford to buy 66.4% of available homes nationwide. Student debt reached record levels this year, with the total amount at $1.56 trillion in the third quarter of 2018. Paying off student loans also makes it harder to set aside money for a down payment, which is one of the top barriers to hom...

Despite BlueTarp Financial’s Building Supply Index reaching an all-time high in the third quarter, contractor sentiment is showing significant signs of deterioration, according to the Maine-based credit management company. The index—based on public data such as consumer sentiment, building permits, and construction spending, along with proprietary data—hit an unadjusted high of 141.83. The seasonally adjusted, 12-month trailing average was also at an all-time high of 134.05,  up nearly two points from the second quarter reading. The index value of 100 is benchmarked to April 2013, and values above 100 reflect healthy economic activity. BlueTarp bases its proprietary data on accounts with more than 120,000 pro customers that it manages for more than 2,000 building material suppliers nationwide. Macroeconomic data is one of the main drivers for the elevated index reading, according to BlueTarp. Consumer confidence, another strong dirver, reached a reading of 135.3, the highes...

CoreLogic ®  (NYSE: CLGX) has come up with an analysis showing 48,390 homes with a total reconstruction cost value (RCV) of approximately $18 billion are at high or extreme risk of wildfire damage from the Camp and Woolsey fires in Northern and Southern  California . While other hazards may cause partial destruction but rarely eliminate an entire property, wildfire events are more likely to cause total loss to structures affected.

Are baby boomers to blame for the lack of affordable housing?  CityLab  contributor Mimi Kirk presents an argument from Randy Shaw, homeless advocate and director of San Francisco’s  Tenderloin Housing Clinic , who posits in a new book,  Generation Priced Out: Who Gets to Live in the New Urban America ,  that "urban Boomer homeowners, in their quest to fend off “density” (and apartment renters) in their neighborhoods, have consistently—and incredibly successfully—blocked the construction of affordable housing." CityLab  spoke with Shaw about the theory. Here are some highlights from the Q+A: Why aren’t these supposedly progressive, left-leaning cities supplying enough affordable housing? The bottom line is they’re not building enough. Though it’s often said that “we can’t build our way of the housing crisis,” if you don’t build the units, there’s no possible way to address affordability. If you look at  Seattle , which builds double the housing ...

With the announcement that Amazon may be splitting its HQ2 expansion across two locations, purportedly Queens in  New York City  and Crystal City in Arlington, Va.,  Zillow  has updated its April 2018 projections of the new headquarters’ potential impact on these metro markets. The latest news that Amazon may be splitting its HQ2 across two locations dilutes its impact on the selected markets. Some finalist cities had concerns about the impact that HQ2 would have on housing affordability, a top concern across most of the country, but the smaller scale of the new headquarters likewise would shrink its effects on affordability. It will be an easier undertaking to meet a smaller influx of housing demand, and separating its HQ2 locations also gives Amazon the chance to create a broader national footprint. Based on Zillow’s April estimates on the impact of the entire HQ2 project, the arrival of an estimated 50,000 new Amazon employees would add a projected 0.6 percen...

According to the  San Francisco Chronicle , Proposition C which was passed by a wide margin will collect taxes but won't be able to spend up to $300 million to combat homelessness due to a lawsuit that challenges the constitutionality of the measure. The Howard Jarvis Taxpayers Association and a coalition of commercial property owners are suing the city and stopping the flow of funds For more than two decades, since voters approved Proposition 218, passing a new tax measure where the proceeds are used for specific purposes has required a two-thirds majority. But last year, a memo from the city attorney’s office interpreting a recent state Supreme Court rulingargued that proposed tax measures put on the ballot by citizens — and not government officials — required only a simple majority to pass. On Tuesday’s ballot, Prop. C required 50 percent plus one vote to pass. The  San Francisco  Department of Elections had about 139,000 ballots left to count as of Wednesday morn...

Affordable Housing Finance 's Christine Serlin says that while Republicans held the majority in the Senate and Democrats took the House during the mid-term elections, one big winner for both parties at the polls was affordable housing. From propositions to bond measures on the state and local levels, voters said yes to addressing the affordability crisis. "Yesterday's landmark elections included several big ballot wins that will help make homes more affordable. In states, counties, and local communities, impacted voters chose to make the American home a priority," says Ali Solis, president and CEO of Make Room, a nonprofit organization working to end the national rental housing crisis. "We hope that policy leaders at all levels of government will take notice and join our efforts to make all homes affordable." With sky-high housing costs one of the California’s biggest issues, state voters passed two propositions to fund needed housing programs for low-i...

New home design is always changing. Today, families are busier than ever with work, school, and extracurricular activities. They need floor plans that will function with a fast-paced lifestyle. Open floor plans aren’t the only thing parents are looking for though, larger pantries, “mom offices,” and upstairs laundry rooms are becoming necessities.  The change is obvious when you’re standing in a large kitchen that opens to the family room. But there are changes behind the scenes, too. Behind the pantry door, for example, you may find a caterer’s kitchen, also known as a scullery or a prep kitchen. Behind another door off the kitchen you’ll find what’s called the “mom office.” It has grown larger even as the traditional formal home office has gotten smaller. “The mom office used to be a 'me space' in the kitchen. Now it’s the nerve center of the family — school calendars, the soccer schedule, all the chaos that has to be organized,” said Argo. Upstairs laundry rooms — n...

 study by NAHB and the National Multifamily Housing Council that details how regulations make up 32% of the cost of developing new multifamily properties  has caught Congress’ attention. The regulatory costs investigated in the study include a broad range of fees, standards, and other requirements imposed at different stages of the development and construction process. According to the study, 7% of regulatory costs come from building-code changes over the past 10 years, 5.9% is attributable to development requirements (such as streets, sidewalks, parking, landscaping, and architectural design) that go beyond what the developer would ordinarily provide, and 4.2% of the costs come from nonrefundable fees charged when site work begins. Over 90% of developers surveyed in the research typically incur hard costs of paying fees to local jurisdictions, both when applying for zoning approval and again when local jurisdictions authorize the construction of buildings. The typical pr...

CNN Business  reports the demand for living small is getting bigger. According to a National Association of Home Builders survey, more than half of Americans would consider living in a home with square footage less than 600 square feet with millennial interest increasing to 63%. Architects and prefab manufacturers have run into a couple problems with financing and zoning regulations, but they believe “tiny is inevitable” and wider acceptance will be coming soon. The first architect that Klein asked to design a tiny house that could be mass-produced was Denmark's Bjarke Ingels. The A45 house he and his firm, Bjarke Ingels Group, designed is an enhanced A-frame style in a prismatic shape with a square footprint. If you imagine taking a cube and pushing two opposite corners down to the ground, that is the shape of the house. The shape gives the interior a more grandiose feel, with full 16-foot height on both sides of the structure. The 150-square-foot home is a low-impact, off-th...