Showing posts from December, 2019

Scammers ordered to pay $18.5 million for preying on struggling homeowners

The owners and operators of a number of mortgage relief companies are now banned from offering debt relief services after being accused to running a mortgage fraud scheme that preyed on distressed homeowners. The  Federal Trade Commission  announced Monday that the U.S. District Court for the District of Nevada ruled in favor of the FTC in a  case  against the masterminds of the scheme that took advantage of struggling borrowers. According to the FTC, the scam was led by Jonathan Hanley and Sandra Hanley, and involved numerous companies, including:  Preferred Law ;  Consumer Defense ;  Consumer Link .;  American Home Loan Counselors ;  American Home Loans ;  Consumer Defense Group , formerly known as  Modification Review Board ;  Brown Legal ;  AM Property Management ;  FMG Partners ; and  Zinly . In the scheme, the scammers promised homeowners that they would help make their mortgages more affordable. The scammers charged consumers illegal advance fees and unlawfully told them

Amount of home showings rose significantly in November

Recent analysis from   suggested  that spring homebuying season now actually starts in the middle of winter, but perhaps it’s starting even earlier than that this year. According to a monthly survey from  ShowingTime  Showing Index, November was the fourth consecutive month that home showings increased. This is the longest run of increasing showing activity since October 2017 through January 2018. The November showing index had a 12.6% year-over-year increase in traffic, nationwide. also said that  in the fall , homebuyers would see 26% less competition and 6.1% more homes on the market, making fall months prime ones for homebuying. During this time, 6% of homes on the market would go through price reductions and become 2.4% cheaper. The supply of homes for sale fell 12.1% year over year, which is the biggest decline since April 2013, and the fifth straight month of declines. Now, home sale prices are at a median of $311,600, the largest increase s

USMCA trade deal may ease housing shortage

The U.S.-Mexico-Canada Agreement passed by the  House of Representatives  will help to ease the nation’s housing shortage by stabilizing the prices of materials used in construction, according to the  National Association of Home Builders . The new trade pact was approved on Dec. 19 with a 385 to 41 bipartisan vote. This was after the three nations agreed to revisions House Speaker Nancy Pelosi said would protect American workers and the environment. The trade pact is now pending in the Senate. The U.S. is Canada’s biggest export market for softwood lumber, primarily used for home construction. “The U.S. residential construction and remodeling industries rely on tens of billions of dollars in building materials sourced from Mexico and Canada annually because America cannot produce enough steel, aluminum and other materials and equipment to meet the needs of the domestic housing industry,” NAHB said in a statement. The U.S. housing market is struggling with an inventory shortage

House narrowly passes temporary repeal of SALT deduction cap

The U.S. House of Representatives on Thursday narrowly passed a temporary two-year repeal of the $10,000 cap imposed on state and local tax deductions (SALT), one of the changes to the tax code imposed by President Donald Trump’s 2017 tax reform.    The real estate community praised the passing of the bill, saying the cap hurt both taxpayers and the industry. “We are pleased that the House has passed a bill to temporarily eliminate the cap on the amount of state and local tax that taxpayers can deduct on their federal tax returns,” California Association of Realtors President Jeanne Radsick said in a statement. “The combined hit of a reduction in the mortgage interest deduction and current $10,000 SALT cap in the tax law has disproportionately hurt taxpayers and real estate in California.”

Freddie Mac's December forecast hints at market stability in 2020

As U.S. home sales are projected to climb in 2020,  Freddie Mac ’s December Forecast indicates the housing market will continue to stand firm moving into the new year. According to the government-sponsored enterprise, home sales are expected to increase from 6 million in 2019 to 6.2 million in 2020 and, as much as 6.3 million in 2021. “A more accommodative monetary policy stance and  robust labor  market helped the U.S. housing market regain its footing in 2019,” said Sam Khater, Freddie Mac’s chief economist. “ Improved sentiment , lower financial market volatility, and  trade headwinds  are setting up a  favorable economic environment  for continued real  estate market growth  in 2020.” Freddie Mac expects annual mortgage origination levels of $2 trillion in 2020 and $1.9 trillion in the year following. This year, the  U.S. homeownership rate , which climbed to a four-year high, was championed by America’s relatively low mortgage rates. In 2020, the GSE expects this growth t

U.S. new-home sales rise in November

Sales of new homes rose in November to an annualized rate of 719,000, according to the  Census Bureau  and the  Department of Housing and Urban Development . According to the Census data, the November pace moved forward from  October’s pace , which was downwardly revised from 738,000 to 710,000. November’s total, which is 1.3% above October’s pace, was 16.9% higher than November 2018, when new home sales sat an annualized rate of 615,000. “In a year that’s been choppy at times, new home sales more than pulled their weight in the back half of 2019,”  Zillow  Economist Matthew Speakman said. “Even though some of the starch from prior months’ strong initial data has been washed out through downward revisions, 2019 will go down as the best year for new home sales since before the Great Recession.” During November, the seasonally adjusted estimate of new homes for sale by the end of the month was 323,000. This represents a supply of 5.4 months at the current sales rate, rising from

The housing markets that changed the most this decade

This decade saw a recovery from the greatest downturn in history, but closed with a  housing shortage  coupled with low  mortgage rates . As the calendar turns to 2020, home values recovered for nearly all of the U.S., and many parts of the country are now seeing higher home prices and a lack of homes available for sale. But there are few markets that stand out above the rest in terms of how much they changed in the last 10 years. The highest percent increase in home prices over the last decade, according to  Redfin , was in Fort Lauderdale, Florida. Per Redfin’s report, Fort Lauderdale was impacted severely by the foreclosure crisis, and saw one of the biggest declines in home value in 2010. But from there, home prices more than doubled over the next 10 years. Median home prices in Fort Lauderdale increased 161% from $106,000 at the beginning of 2010 to $278,000 at the end of 2019. Redfin says the biggest contrast between an increase in home prices and decline in incomes

What to expect if you plan to buy a home in 2020

If you’re planning to buy a home next year, you’ll have plenty of company. More millennials are expected to jump in the market in 2020 as mortgage rates remain low. But some problems that plagued homebuyers in 2019 – namely a scarcity of homes for sale  – may be alleviated, at least a little, next year. Here are five key trends experts expect for the upcoming year and how they could affect your home-buying plans.  More competition The number of new mortgages going to first-time homebuyers is forecast to increase to 8.3 million over the next three years, starting in 2020. That’s a 700,000 jump from the previous three-year period, a ccording to a recent analysis by TransUnion .  “We think there will be growth in spite of limited starter home supply,” said Joe Mellman, senior vice president at TransUnion “We’re actually anticipating interest rates will stay low, unemployment at an all time low, and real wage growth over inflation will be positive.”  The number of new mortg

Home sale prices increased over 5% in the last month

Home sale prices increased 5.2% year over year in November, according to a new report from  Redfin . Now,  home sale prices  are at a median of $311,600, the largest increase since July 2018, when home prices were up from 5.6% from 2018. “Given that inventory is falling quickly, we’d expect to see even stronger price growth, especially when compared to last year’s soft market,” said Redfin Chief Economist Daryl Fairweather. “The fact that homes are selling faster indicates that there are buyers ready to pull the trigger and take advantage of low interest rates,” Fairweather added. “If lack of inventory and high demand continues, buyers who take a wait-and-see approach could face less favorable conditions in the spring season like bidding wars and faster price growth.” Home price gains were the biggest in affordable metro areas. There were nine metro areas that saw the biggest gains below the national median for the fifth month in a row. Homes that were sold in November also

Number of U.S. renters surpasses 100 million

In the wake of the Great Recession, the housing market significantly weakened as home values were slashed, origination volumes slowed, and prospective buyers refrained from entering the market. Now, ten years following the collapse, the nation’s economic landscape has changed dramatically, and with it so has the relationship between consumer and housing market. As the decade comes to a close,  RentcafĂ© , a nationwide internet listing service,   claims renter rates have climbed across the country as more and more Americans are now choosing to rent instead of own. According to the company’s  decade report , the renter population has become more than 100 million strong after a decade of sustained growth, as the number of American renters reached 108.5 million in 2018, up from 99.4 million in 2010. Although the percentage of renters in the general population has fluctuated throughout the years, RentcafĂ© says its growth has been consistent since the beginning of the millennium. I

Recession probability is dropping

Depending on who you talk to, a 2020 recession ranges anywhere from  somewhat likely  to  imminent . Buildfax , a housing data and analytics company, has been tracking the probability of a recession throughout 2019. Some of the indicators the company uses to measure the likelihood of an economic downturn can be found in its monthly Housing Health  Report . Namely, Buildfax views housing activity, from single-family housing authorizations to maintenance and remodeling as a barometer for how the economy is doing.  “We first started tracking the probability of a recession in November 2018 after key housing indicators, including single-family housing authorizations, maintenance, and remodeling, declined across the board,” Buildfax said in its November Housing Health Report. “This was notable, in part, because BuildFax research shows single-family housing authorizations alone were one of the most predictive factors in historical recessions between 1961 and 2008.” In the report, Build

U.S. housing starts rise 3.2% in November, permits rise to new high

Housing starts were up last month and it appears that increased construction could be on the horizon for 2020. Housing starts grew 3.2% in November to a seasonally adjusted annual rate of 1.365 million and the pace for October was revised upward, according to the  Department of Housing and Urban Development  and the  Department of Commerce . Despite October’s increase, Lawrence Yun, the  National Association of Realtor’s  chief economist, warns homebuilders still need to construct more homes in order to meet long term demand. “The latest housing starts numbers are good and rising, but still short by 135,000 compared to the long-term average — and well short of the 5 to 6 million that is now needed to fully end the housing shortage,” Yun said. However, yesterday’s  Housing Market Index , which revealed that homebuilder confidence reached a 10-year high, indicates more home construction could be on the horizon. “More home construction appears to be on the way as we move into 2

Housing is in the middle of an inventory crisis

It’s no surprise to anyone in the real estate or mortgage industry that there’s a  critical shortage  of homes for sale – the four-month supply of homes for sale today is between 30-40% lower than the number of homes for sale in a normal, healthy market. It’s also no surprise that a big part of this shortage is due to builders staying on the sidelines instead of gearing up production to meet demand. But what might be surprising are some of the other factors contributing to this lack of supply, and the impact these factors are having on prices, sales, and the housing market in general. Supply and demand are two of the most basic components of economic theory. Too much supply, and products become commodities with falling prices. Too much demand, and scarcity creates bidding wars which drive prices higher. This, in an overly simplistic way, describes what’s happened over the last decade in the housing market. The combination of an over-supply of new construction along with millions

Home flipping is flopping

Despite what some HGTV shows would have you believe, home-flipping activity is not at its most profitable right now. According to  ATTOM Data Solutions ’ third-quarter 2019 U.S. Home Flipping Report, the latest returns on home flips stood at the second-lowest point since 2011. “After a  springtime selling binge  earlier this year, the home-flipping business settled way down over the summer amid a continuing scenario of languishing profits,” said Todd Teta, chief product officer at ATTOM Data Solutions. “The retreat back to more normal levels of sales comes amid broader market forces that are making it harder and harder for investors to complete the kinds of deals they were getting as recently as last year,” Teta added. “Those forces are keeping profits way down from post-Recession highs and show no signs of easing.” According to the report, 56,566 U.S. single family homes and condos were flipped in the third quarter of 2019, down 12.9% from the previous quarter and down 6.8% f

9 Paint Colors That Could Take Over Homes in 2020

Pantone, the color management company, recently announced its pick for  2020 Color of the Year ; most of the major paint companies also pick colors they think will dominate homes in the year ahead. As usual the selections are a mix, but there are some clear trends this time around, and the colors lean rather cool. Let’s see how these nine colors might work in your home. Jennifer Ott Design Greens and blues are continuing their run as on-trend hues. But compared with the  2019 Colors of the Year , these colors are fresher and less moody. In fact, with a couple of exceptions, they convey a rather hopeful vibe. It’s important to point out that you should always decorate with colors you love, regardless of what is considered trendy. As you can see here, there’s really no solid consensus on what is going to be the “it” color in 2020. So rather than feeling like you  have to  bring one of these hues into your home, think of this as a source for inspiration if you are looking for a

Borrowers gained nearly $457 billion in home equity in the last year

Homeowner equity continued to increase in the third quarter of the year, according to the Q3 2019 home equity analysis from  CoreLogic , a property information, analytics and data-enabled solutions provider. Homeowners with a mortgage – about 64% of all homeowners – saw their equity increase by 5.1%, a total of nearly $457 billion, since the third quarter of last year. This means the average homeowner gained about $5,300 in equity in the last year. Of all the nation’s housing markets, homeowners in Idaho experienced the largest gain in home equity. In this state, homeowners gained an average of $25,800. This was followed by Wyoming, where homeowners gained an average of $24,000 and Utah, where homeowners gained an average of $21,000. Across the country, the total number of mortgaged residential properties with negative equity decreased by 4% from the second quarter to 2 million homes or 3.7% of all mortgaged properties. This is a decline of 10% from 2.2 million homes in the

Renters paid $4.5 trillion in rent in the last 10 years

During the 2010s, U.S. renters  paid  about $4.5 trillion in rent, according to  Zillow . That’s more than the 2018 GDP of the world’s fourth-largest economy, Germany. In 2019 alone, renters paid out $512 billion in rent. The total amount of rent paid in 2019 is also higher than the entire 2018 GDP of Thailand, which was $505 billion, and a little less than Argentina’s $518 billion. The renters who spent the most, to no surprise, were located in New York, at $56.6 billion. Los Angeles renters paid the second-highest amount in rent, $39.2 billion, while San Francisco renters were the third-highest, at $16.4 billion. Those three markets are where the cost of living is the highest, and where there is a lack of affordable housing. The total amount of rent paid in 2019 was 2.9% higher than in 2018, with 43.6 million people renting across the U.S. Phoenix  saw the fastest growth in rent over the past year, up 7.5% this year compared to 2018. Las Vegas had a 5.6% increase while C

Caps Removed for VA Loan Limits

Veterans may be eligible to buy larger homes in pricier communities—still without a down payment—starting next year. Those taking out Veteran Affairs–backed mortgages will find caps removed on what they can spend in 2020. The Blue Water Navy Veterans Act of 2019 removed the caps for the new year. But military members on active duty and veterans will still need to qualify for the mortgage and verify they can afford the monthly payments. “It gives the veterans the opportunity to buy homes in the areas they want to buy in,” Kyle Reed, a real estate pro with Pauly Presley Realty in Austin, Texas, told®. “It opens up some areas in cities to VA loans … that maybe veterans didn’t have access to before without putting a bunch of money down.” VA loans have been capped at different amounts nationwide. Borrowers could take out more on a VA loan in a high-priced area like San Francisco, for example, than they could in Detroit, where homes tend to cost less. If they exceeded the

Building permits reach 12-year high in October

For a housing market desperately in need of some good news on the  inventory front , there may finally be some. New  Census Bureau  data, analyzed by  RealPage , shows that residential building permits hit a 12-year high in October. Permits are a solid leading indicator of looming housing construction, as obtaining the permit is one of significant hurdles that must be cleared in the construction process. And according to RealPage’s analysis, total residential building permits hit a 12-year high of a seasonally adjusted annual rate of 1.46 million units in October. Of those, 909,000 were for single-family houses, while 505,000 were multifamily units. Per RealPage’s report, the 505,000 multifamily units permitted in the past year is only the fifth time in the past decade that the permitting level exceeded 500,00 units. According to the report, with the higher annual rates of the past few months, total residential permitting levels have now exceeded 1.3 million units in seven o