Wednesday, December 7, 2011
Twenty Metros Join List of Improving Housing Markets Index in December
The number of improving housing markets continued to expand for a fourth consecutive month in December, rising from 30 to 41 on the latest National Association of Home Builders/First American Improving Markets Index (IMI), released today. The December list featured 20 new additions, including several major markets such as Washington, D.C.; San Jose, Calif.; and Toledo, Ohio. Meanwhile, nine smaller markets dropped off the list, primarily due to softer house prices.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months.
New entrants to the list in December include the following:
Ann Arbor, MI
Athens, GA
Boulder, CO
Burlington, VT
Canton, OH
Charleston, WV
Danville, VA
Fort Wayne, IN
Grand Forks, ND
Jackson, MS
Kingsport, TN
Laredo, TX
Lincoln, NE
Muncie, IN
Muskegon, MI
San Jose, CA
Scranton, PA
Toledo, OH
Washington, DC
Winchester, VA
"The increases we continue to see in the number and geographic diversity of improving metros are quite encouraging, and evidence of the fact that all housing markets are dependent on uniquely local factors," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. He noted that as of December, a total of 21 states and the District of Columbia are represented on the improving markets list -- up from14 states represented in November.
"The December IMI results are very much in keeping with the latest government housing data and our own builder surveys, which have shown modest signs of improvement in certain individual markets where employment is gaining and distressed properties are not as numerous," said NAHB Chief Economist David Crowe. "These gradual improvements are now becoming evident not just in small, energy-producing metros that have previously dominated the IMI, but also in several larger markets and areas with more diverse economies."
The nine markets that dropped off the IMI in December include Alexandria, La.; Fairbanks, Alaska; Hinesville, Ga.; Houma, La.; Jonesboro, Ark.; Lima, Ohio; Pine Bluff, Ark.; Sumter, S.C. and Waco, Tex. All but two of these metros fell from the list due to softening house prices. The exceptions to the rule were Jonesboro and Waco, where declines were registered in employment and single-family housing permits, respectively.
The total list of improving housing markets in December, as defined by the IMI, includes the following 41 entries (listed alphabetically by state):
Anchorage, AK
San Jose, CA
Boulder, CO
Fort Collins, CO
Washington, DC
Athens, GA
Davenport, IA
Waterloo, IA
Kankakee, IL
Fort Wayne, IN
Muncie, IN
Monroe, LA
New Orleans, LA
Ann Arbor, MI
Muskegon, MI
Jackson, MS
Fayetteville, NC
Winston-Salem, NC
Bismarck, ND
Grand Forks, ND
Lincoln, NE
Canton, OH
Toledo, OH
Pittsburgh, PA
Scranton, PA
Williamsport, PA
Kingsport, TN
Amarillo, TX
Corpus Christi, TX
Laredo, TX
McAllen, TX
Midland, TX
Odessa, TX
Sherman, TX
Tyler, TX
Danville, VA
Winchester, VA
Burlington, VT
Charleston, WV
Casper, WY
Cheyenne, WY
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months.
New entrants to the list in December include the following:
Ann Arbor, MI
Athens, GA
Boulder, CO
Burlington, VT
Canton, OH
Charleston, WV
Danville, VA
Fort Wayne, IN
Grand Forks, ND
Jackson, MS
Kingsport, TN
Laredo, TX
Lincoln, NE
Muncie, IN
Muskegon, MI
San Jose, CA
Scranton, PA
Toledo, OH
Washington, DC
Winchester, VA
"The increases we continue to see in the number and geographic diversity of improving metros are quite encouraging, and evidence of the fact that all housing markets are dependent on uniquely local factors," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. He noted that as of December, a total of 21 states and the District of Columbia are represented on the improving markets list -- up from14 states represented in November.
"The December IMI results are very much in keeping with the latest government housing data and our own builder surveys, which have shown modest signs of improvement in certain individual markets where employment is gaining and distressed properties are not as numerous," said NAHB Chief Economist David Crowe. "These gradual improvements are now becoming evident not just in small, energy-producing metros that have previously dominated the IMI, but also in several larger markets and areas with more diverse economies."
The nine markets that dropped off the IMI in December include Alexandria, La.; Fairbanks, Alaska; Hinesville, Ga.; Houma, La.; Jonesboro, Ark.; Lima, Ohio; Pine Bluff, Ark.; Sumter, S.C. and Waco, Tex. All but two of these metros fell from the list due to softening house prices. The exceptions to the rule were Jonesboro and Waco, where declines were registered in employment and single-family housing permits, respectively.
The total list of improving housing markets in December, as defined by the IMI, includes the following 41 entries (listed alphabetically by state):
Anchorage, AK
San Jose, CA
Boulder, CO
Fort Collins, CO
Washington, DC
Athens, GA
Davenport, IA
Waterloo, IA
Kankakee, IL
Fort Wayne, IN
Muncie, IN
Monroe, LA
New Orleans, LA
Ann Arbor, MI
Muskegon, MI
Jackson, MS
Fayetteville, NC
Winston-Salem, NC
Bismarck, ND
Grand Forks, ND
Lincoln, NE
Canton, OH
Toledo, OH
Pittsburgh, PA
Scranton, PA
Williamsport, PA
Kingsport, TN
Amarillo, TX
Corpus Christi, TX
Laredo, TX
McAllen, TX
Midland, TX
Odessa, TX
Sherman, TX
Tyler, TX
Danville, VA
Winchester, VA
Burlington, VT
Charleston, WV
Casper, WY
Cheyenne, WY
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Friday, November 18, 2011
Realtors® Applaud Congress for Reinstating FHA Loan Limits
The National Association of Realtors® commends Congress for reinstating the loan limit formula and maximum cap for Federal Housing Administration-insured loans for two years.
“As the nation’s leading advocate for homeownership, we applaud members of Congress for restoring FHA’s previous loan limits, which will help reduce consumer cost burdens, stabilize local housing markets and allow qualified, creditworthy borrowers to access affordable mortgage financing,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “The reinstated loan limits will help provide much needed liquidity and stability to communities nationwide as tight credit restrictions continue to prevent some qualified buyers from becoming home owners and the housing market recovery remains fragile.”
The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets. The floor will remain at $271,050.The loan limits for Fannie Mae- and Freddie Mac-backed mortgages will remain at 115 percent of local area median home prices, up to $625,500.
NAR believes thereinstated loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families throughout the country, not just wealthy individuals or those in costly markets. Nearly two-thirds of buyers who will be helped by the loan limits provision have incomes below $100,000.
“It’s a misconception that only wealthy borrowers benefit from the maximum cost loan limits; middle-class homebuyers living in all areas of the country deserve the same access to affordable mortgage financing and the same opportunity to achieve homeownership that homebuyers enjoy in the most affordable regions of the country,” said Veissi.The legislative action will have an impact even in communities with loan limits well below the maximum cap;the reset last month impacted 669 counties in 42 states and territories, with an average loan limit reduction of more than $68,000.
The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR strongly urges Congress to use the additional time to complete work on a five-year reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.
“As the nation’s leading advocate for homeownership, we applaud members of Congress for restoring FHA’s previous loan limits, which will help reduce consumer cost burdens, stabilize local housing markets and allow qualified, creditworthy borrowers to access affordable mortgage financing,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “The reinstated loan limits will help provide much needed liquidity and stability to communities nationwide as tight credit restrictions continue to prevent some qualified buyers from becoming home owners and the housing market recovery remains fragile.”
The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets. The floor will remain at $271,050.The loan limits for Fannie Mae- and Freddie Mac-backed mortgages will remain at 115 percent of local area median home prices, up to $625,500.
NAR believes thereinstated loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families throughout the country, not just wealthy individuals or those in costly markets. Nearly two-thirds of buyers who will be helped by the loan limits provision have incomes below $100,000.
“It’s a misconception that only wealthy borrowers benefit from the maximum cost loan limits; middle-class homebuyers living in all areas of the country deserve the same access to affordable mortgage financing and the same opportunity to achieve homeownership that homebuyers enjoy in the most affordable regions of the country,” said Veissi.The legislative action will have an impact even in communities with loan limits well below the maximum cap;the reset last month impacted 669 counties in 42 states and territories, with an average loan limit reduction of more than $68,000.
The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR strongly urges Congress to use the additional time to complete work on a five-year reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.
Saturday, November 12, 2011
A 3.8 Percent “Sales Tax” on Your Home?
Q: Does the new health care law impose a 3.8 percent tax on profits from selling your home?
A: No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won’t be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few — those with high incomes from other sources.
We’ve been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false.
The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.
We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on "net gain … attributable to the disposition of property." That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is "taken into account in computing taxable income" under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.)
The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 135 of its report on the bill. The note states: "Gross income does not include … excluded gain from the sale of a principal residence."
And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. "Some home sales would see a tax increase under this bill," Ahern told us, "but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple)."
So there you have it. The sort of people who would have to pay the tax might include, for example:
A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
An "empty nester" couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy. However, a typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors. Obviously, none of those sales could possibly generate a $250,000 profit, and so none would be subject to the tax.
Thus, for the vast majority, the 3.8 percent tax won’t apply. The Tax Foundation, in a report released April 15, said the new tax on investment income (including real estate) "will hit approximately the top-earning two percent of families" when it takes effect in 2013.
Footnote: Some of the chain e-mails that claim ordinary home sales will be taxed include a copy of an article written by Paul Guppy, a policy analyst with the conservative Washington Policy Institute (that’s Washington state, not Washington, D.C.). The article appeared March 28 as an op-ed in the Spokane, Wash., Spokesman-Review, and Guppy claimed that "[m]iddle-income people must pay the full tax even if they are ‘rich’ for only one day." That brought a quick rebuttal from Sara Orrange, the government affairs director of the local Realtors association. She wrote a letter to the newspaper calling Guppy’s article "inaccurate" and saying, "Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made." In a news article the next day, business reporter Bert Caldwell confirmed that only "a very few" home sellers would pay the 3.8 percent tax.
The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller’s "main home" for at least two years out of the five years prior to the sale.
Sources
Joint Committee on Taxation. "Technical Explanation of the Revenue Provisions of the ‘Reconciliation Act of 2010,’ As Amended, In Combination with the ‘Patient Protection and Affordable Care Act.’" 21 Mar 2010.
Ahern, William. E-mail to FactCheck.org, 22 Apr 2010.
National Association of Realtors. "Existing-Home Sales Rise on Home Buyer Tax Credit and Favorable Market Conditions." Press release. 22 Apr 2010.
Fleenor, Patrick and Gerald Prante. "Health Care Reform: How Much Does It Redistribute Income?" The Tax Foundation. 15 Apr 2010.
Guppy, Paul. "Health Law’s Heavy Impact." Spokesman-Review. 28 Mar 2010.
Orrange, Sara. "Home sales tax clarified." Letter. Spokesman-Review. 1 Apr 2010.
Caldwell, Bert. "Realtors take aim at health care tax claim." Spokesman-Review. 4 Apr 2010.
A: No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won’t be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few — those with high incomes from other sources.
We’ve been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false.
The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.
We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on "net gain … attributable to the disposition of property." That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is "taken into account in computing taxable income" under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.)
The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 135 of its report on the bill. The note states: "Gross income does not include … excluded gain from the sale of a principal residence."
And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. "Some home sales would see a tax increase under this bill," Ahern told us, "but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple)."
So there you have it. The sort of people who would have to pay the tax might include, for example:
A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
An "empty nester" couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy. However, a typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors. Obviously, none of those sales could possibly generate a $250,000 profit, and so none would be subject to the tax.
Thus, for the vast majority, the 3.8 percent tax won’t apply. The Tax Foundation, in a report released April 15, said the new tax on investment income (including real estate) "will hit approximately the top-earning two percent of families" when it takes effect in 2013.
Footnote: Some of the chain e-mails that claim ordinary home sales will be taxed include a copy of an article written by Paul Guppy, a policy analyst with the conservative Washington Policy Institute (that’s Washington state, not Washington, D.C.). The article appeared March 28 as an op-ed in the Spokane, Wash., Spokesman-Review, and Guppy claimed that "[m]iddle-income people must pay the full tax even if they are ‘rich’ for only one day." That brought a quick rebuttal from Sara Orrange, the government affairs director of the local Realtors association. She wrote a letter to the newspaper calling Guppy’s article "inaccurate" and saying, "Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made." In a news article the next day, business reporter Bert Caldwell confirmed that only "a very few" home sellers would pay the 3.8 percent tax.
The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller’s "main home" for at least two years out of the five years prior to the sale.
Sources
Joint Committee on Taxation. "Technical Explanation of the Revenue Provisions of the ‘Reconciliation Act of 2010,’ As Amended, In Combination with the ‘Patient Protection and Affordable Care Act.’" 21 Mar 2010.
Ahern, William. E-mail to FactCheck.org, 22 Apr 2010.
National Association of Realtors. "Existing-Home Sales Rise on Home Buyer Tax Credit and Favorable Market Conditions." Press release. 22 Apr 2010.
Fleenor, Patrick and Gerald Prante. "Health Care Reform: How Much Does It Redistribute Income?" The Tax Foundation. 15 Apr 2010.
Guppy, Paul. "Health Law’s Heavy Impact." Spokesman-Review. 28 Mar 2010.
Orrange, Sara. "Home sales tax clarified." Letter. Spokesman-Review. 1 Apr 2010.
Caldwell, Bert. "Realtors take aim at health care tax claim." Spokesman-Review. 4 Apr 2010.
Friday, November 11, 2011
Veterans Day!
It is with great pride that we in the Coldwell Banker family honor our veterans on this day. Not only is it a chance for us to reflect upon those who have served our great nation in the past, but also an opportunity to express our deepest gratitude to the men and women currently serving in our armed forces in locations around the world.
Our appreciation for the bravery and sacrifices of our service members is constant, yet we pay special tribute on this historic day each year. Veterans Day symbolizes the identity of our country – one founded on courage, determination and an enduring desire for personal freedom.
Whether the veteran you know is a family member, friend, neighbor or co-worker, we encourage you to show them your appreciation for all they have done and continue to do on our behalf.
Our appreciation for the bravery and sacrifices of our service members is constant, yet we pay special tribute on this historic day each year. Veterans Day symbolizes the identity of our country – one founded on courage, determination and an enduring desire for personal freedom.
Whether the veteran you know is a family member, friend, neighbor or co-worker, we encourage you to show them your appreciation for all they have done and continue to do on our behalf.
Wednesday, October 26, 2011
New-Home Sales Rise 5.7 Percent in September
Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 313,000 units in September, according to newly released data from the U.S. Commerce Department. This marks the fastest pace of new-home sales in the past five months.
"Today's report highlights the gradual improvement in housing market conditions that is becoming evident in certain pockets of the country, as consumers who can surmount very restrictive lending standards to qualify for a favorable mortgage rate seize on this opportunity to buy," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "The latest numbers also reveal that first-time buyers are driving the new-homes market right now, as evidenced by the volume of lower-priced, entry-level homes under contract. It's worth noting that these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-downpayment mortgage options that have been threatened by recent government proposals."
"The improved rate of new-home sales in September is on par with NAHB's forecast for the overall number of sales this year and in keeping with the spotty improvements that our latest builder surveys have highlighted in select markets," said NAHB Chief Economist David Crowe. "While 313,000 is still an exceptionally low rate of new-home sales by historic standards, it is an encouraging sign of an anticipated broader recovery over the course of next year, and builders have helped the situation by keeping their inventories of homes for sale very lean in areas where there is an oversupply of existing units."
Regionally, new-home sales were mixed in September, with gains of 11.2 percent and 9.7 percent registered in the South and West, respectively, and declines of 4.2 percent and 12.2 percent registered in the Northeast and Midwest, respectively.
The inventory of new homes for sale held at an all-time record low of 163,000 units in September. This represents a modest 6.2 -month supply at the current sales pace.
"Today's report highlights the gradual improvement in housing market conditions that is becoming evident in certain pockets of the country, as consumers who can surmount very restrictive lending standards to qualify for a favorable mortgage rate seize on this opportunity to buy," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "The latest numbers also reveal that first-time buyers are driving the new-homes market right now, as evidenced by the volume of lower-priced, entry-level homes under contract. It's worth noting that these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-downpayment mortgage options that have been threatened by recent government proposals."
"The improved rate of new-home sales in September is on par with NAHB's forecast for the overall number of sales this year and in keeping with the spotty improvements that our latest builder surveys have highlighted in select markets," said NAHB Chief Economist David Crowe. "While 313,000 is still an exceptionally low rate of new-home sales by historic standards, it is an encouraging sign of an anticipated broader recovery over the course of next year, and builders have helped the situation by keeping their inventories of homes for sale very lean in areas where there is an oversupply of existing units."
Regionally, new-home sales were mixed in September, with gains of 11.2 percent and 9.7 percent registered in the South and West, respectively, and declines of 4.2 percent and 12.2 percent registered in the Northeast and Midwest, respectively.
The inventory of new homes for sale held at an all-time record low of 163,000 units in September. This represents a modest 6.2 -month supply at the current sales pace.
Wednesday, October 12, 2011
Number of Improving Housing Markets Nearly Doubles in October
The second edition of the National Association of Home Builders/ First American Improving Markets Index (IMI), released today, shows 23 individual housing markets now qualifying as "improving" under the new gauge's parameters. This is nearly double the 12 housing markets that made the list last month.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in October:
•Alexandria, LA
•Amarillo, TX
•Anchorage, AK
•Bismarck, ND
•Casper, WY
•Fairbanks, AK
•Fayetteville, NC
•Houma, LA
•Iowa City, IA
•Jonesboro, AR
•Kankakee, IL
•McAllen, TX
•Midland, TX
•New Orleans, LA
•Odessa, TX
•Pine Bluff, AR
•Pittsburgh, PA
•Sherman, TX
•Sumter, SC
•Waco, TX
•Waterloo, IA
•Wichita Falls, TX
•Winston-Salem, NC
"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."
"While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced," said NAHB Chief Economist David Crowe. "In particular, Texas stands out for its seven entries on the improving markets list."
Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in October:
•Alexandria, LA
•Amarillo, TX
•Anchorage, AK
•Bismarck, ND
•Casper, WY
•Fairbanks, AK
•Fayetteville, NC
•Houma, LA
•Iowa City, IA
•Jonesboro, AR
•Kankakee, IL
•McAllen, TX
•Midland, TX
•New Orleans, LA
•Odessa, TX
•Pine Bluff, AR
•Pittsburgh, PA
•Sherman, TX
•Sumter, SC
•Waco, TX
•Waterloo, IA
•Wichita Falls, TX
•Winston-Salem, NC
"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."
"While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced," said NAHB Chief Economist David Crowe. "In particular, Texas stands out for its seven entries on the improving markets list."
Bangor, Maine, was the only area to drop off of the improving markets list in October, due to a decline in local building permits.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.
Friday, October 7, 2011
Feelin' Hot.. Hot.. Hot!
The summer may be over, but some parts of the economy are just starting to heat up. One economic indicator that has come in hotter lately is inflation. At the end of September, the final reading of GDP in the 2nd Quarter showed inflation at 2.5%, which was up from the previous reading of 2.4%.
That elevated inflation reading was released on the heels of a hot Core Consumer Price Index (CPI), which has risen steadily and jumped to the upper-end of the Fed’s comfort level in the latest release.
Although Fed Chair Ben Bernanke stated a couple weeks ago that inflation has "moderated" of late and should continue to do so, there are still some reasons for concern. For example, we are experiencing an unprecedented amount of stimulus and low rates, which is something never seen before in history.
So why is this significant?
The concept is simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
Once inflation starts to emerge it can manifest rather quickly. Future inflation readings will be closely watched to see if a trend higher is emerging, and last month’s elevated number will certainly heat up the debate surrounding more stimulus, as more money into the system fuels inflation further.
If inflation heats up even more, the Fed will likely back off their "low rates until mid-2013" mandate. Inflation really does change everything, so the markets will continue to follow this story closely.
That elevated inflation reading was released on the heels of a hot Core Consumer Price Index (CPI), which has risen steadily and jumped to the upper-end of the Fed’s comfort level in the latest release.
Although Fed Chair Ben Bernanke stated a couple weeks ago that inflation has "moderated" of late and should continue to do so, there are still some reasons for concern. For example, we are experiencing an unprecedented amount of stimulus and low rates, which is something never seen before in history.
So why is this significant?
The concept is simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
Once inflation starts to emerge it can manifest rather quickly. Future inflation readings will be closely watched to see if a trend higher is emerging, and last month’s elevated number will certainly heat up the debate surrounding more stimulus, as more money into the system fuels inflation further.
If inflation heats up even more, the Fed will likely back off their "low rates until mid-2013" mandate. Inflation really does change everything, so the markets will continue to follow this story closely.
Saturday, October 1, 2011
Home prices post fourth month of gains
U.S. home prices inched up for the fourth month in a row, rising 0.9 percent from June to July, according to the latest Standard & Poor's/Case-Shiller Home Price Indices.
Only two of the 20 metro areas tracked by the Case-Shiller 20-City Composite saw month-to-month price declines: Las Vegas (-0.2 percent) and Phoenix (-0.1 percent). The index showed prices in Las Vegas down 59.3 percent from their August 2006 peak, hitting a new low.
Looking back a year, 18 out of 20 metro areas saw annual price declines, with the price index for Minneapolis falling 9.1 percent, Phoenix down 8.8 percent, and Portland, Ore., dropping 8.4 percent.
Detroit (up 1.2 percent) and Washington D.C. (up 0.3 percent) were the only cities to post annual gains in July, leaving the 20-City Composite down 4.1 percent.
But a dozen other cities -- Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Las Vegas, Miami, Minneapolis, Phoenix, Portland, and Tampa -- posted improvements in annual price declines compared to June.
Standard & Poor's said the report included some "unusually large revisions" across some metro areas. Detroit was the most affected, with additional sales in May and June showing "a much healthier market than previously thought."
Only two of the 20 metro areas tracked by the Case-Shiller 20-City Composite saw month-to-month price declines: Las Vegas (-0.2 percent) and Phoenix (-0.1 percent). The index showed prices in Las Vegas down 59.3 percent from their August 2006 peak, hitting a new low.
Looking back a year, 18 out of 20 metro areas saw annual price declines, with the price index for Minneapolis falling 9.1 percent, Phoenix down 8.8 percent, and Portland, Ore., dropping 8.4 percent.
Detroit (up 1.2 percent) and Washington D.C. (up 0.3 percent) were the only cities to post annual gains in July, leaving the 20-City Composite down 4.1 percent.
But a dozen other cities -- Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Las Vegas, Miami, Minneapolis, Phoenix, Portland, and Tampa -- posted improvements in annual price declines compared to June.
Standard & Poor's said the report included some "unusually large revisions" across some metro areas. Detroit was the most affected, with additional sales in May and June showing "a much healthier market than previously thought."
Friday, September 23, 2011
Housing Starts Decline, Permits Rise in August
Nationwide housing starts declined 5.0 percent to a seasonally adjusted annual rate of 571,000 units in August, according to figures released by the U.S. Commerce Department today. The decline was primarily on the more volatile multifamily side, with single-family housing production edging down just 1.4 percent. Meanwhile, permits for new construction posted modest gains in both sectors.
"At this point, most builders are only looking to replenish their depleted inventories of new homes for sale, but otherwise holding off on new projects," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "While we would like to get more crews back on the job, we need to see solid improvement in consumer demand, greater access to credit for both builders and buyers, and a reduction in the number of foreclosed properties on the market before we can ramp up new production."
"Today's numbers are completely consistent with NAHB's forecast for the quarter, and are in keeping with the anemic economic and job growth we are seeing across most of the country," said NAHB Senior Economist Robert Denk. "That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide."
Single-family housing starts declined 1.4 percent to a seasonally adjusted annual rate of 417,000 units in August, while multifamily production – which tends to display greater volatility on a month to month basis – declined 13.5 percent to a 154,000-unit rate. Regionally, combined starts activity was mixed in August, with the Midwest and West posting gains of 2.6 percent and 2.2 percent, respectively, and the Northeast and South posting declines of 29.1 percent and 3.3 percent, respectively.
Building permits, which can be an indicator of future building activity, rose 3.2 percent to a seasonally adjusted annual rate of 620,000 units in August, their highest level since last December. Single-family permits gained 2.5 percent to 413,000 units, while multifamily permits gained 4.5 percent to 207,000 units.
"At this point, most builders are only looking to replenish their depleted inventories of new homes for sale, but otherwise holding off on new projects," said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. "While we would like to get more crews back on the job, we need to see solid improvement in consumer demand, greater access to credit for both builders and buyers, and a reduction in the number of foreclosed properties on the market before we can ramp up new production."
"Today's numbers are completely consistent with NAHB's forecast for the quarter, and are in keeping with the anemic economic and job growth we are seeing across most of the country," said NAHB Senior Economist Robert Denk. "That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide."
Single-family housing starts declined 1.4 percent to a seasonally adjusted annual rate of 417,000 units in August, while multifamily production – which tends to display greater volatility on a month to month basis – declined 13.5 percent to a 154,000-unit rate. Regionally, combined starts activity was mixed in August, with the Midwest and West posting gains of 2.6 percent and 2.2 percent, respectively, and the Northeast and South posting declines of 29.1 percent and 3.3 percent, respectively.
Building permits, which can be an indicator of future building activity, rose 3.2 percent to a seasonally adjusted annual rate of 620,000 units in August, their highest level since last December. Single-family permits gained 2.5 percent to 413,000 units, while multifamily permits gained 4.5 percent to 207,000 units.
Tuesday, September 13, 2011
New index tracks metros with growth in real estate prices, permits and jobs
After enduring what has seemed like an endless string of dismal numbers reports, the housing industry is about to get some good news. Tuesday, the National Association of Home Builders (NAHB) launched the NAHB/First American Improving Markets Index (IMI), dedicated entirely to tracking metropolitan areas that have consistently shown signs of improvement.
To make the list, a metro area must have shown at least six months of improvement from its trough in three areas the NAHB sees as key to determining the pulse of the housing market: housing permits, employment, and home prices.
To be released monthly, the index will draw its data from the Bureau of Labor Statistics for employment growth numbers, house-price appreciation data from Freddie Mac, and single-family permit numbers from the U.S. Census Bureau.
"Housing conditions are local and do not always reflect the national picture," said Bob Nielsen, NAHB chairman, in a release. "We created this new index to shine a light on those housing markets across the country that have stabilized and have begun to show signs of recovery."
This month, 12 metro areas made the cut: Alexandria, La.; Anchorage, Alaska.; Bangor, Maine; Bismarck, N.D.; Casper, Wyo.; Fairbanks, Alaska.; Fayetteville, N.C.; Houma, La.; Midland, Texas; New Orleans; Pittsburgh; and Waco, Texas.
"It’s not surprising that many of the states represented are energy-rich areas," observed David Crowe, the NAHB’s chief economist. Still, he points out, "last year at this time, there was not a single market that showed improvement using these criteria."
To make the list, a metro area must have shown at least six months of improvement from its trough in three areas the NAHB sees as key to determining the pulse of the housing market: housing permits, employment, and home prices.
To be released monthly, the index will draw its data from the Bureau of Labor Statistics for employment growth numbers, house-price appreciation data from Freddie Mac, and single-family permit numbers from the U.S. Census Bureau.
"Housing conditions are local and do not always reflect the national picture," said Bob Nielsen, NAHB chairman, in a release. "We created this new index to shine a light on those housing markets across the country that have stabilized and have begun to show signs of recovery."
This month, 12 metro areas made the cut: Alexandria, La.; Anchorage, Alaska.; Bangor, Maine; Bismarck, N.D.; Casper, Wyo.; Fairbanks, Alaska.; Fayetteville, N.C.; Houma, La.; Midland, Texas; New Orleans; Pittsburgh; and Waco, Texas.
"It’s not surprising that many of the states represented are energy-rich areas," observed David Crowe, the NAHB’s chief economist. Still, he points out, "last year at this time, there was not a single market that showed improvement using these criteria."
Wednesday, August 31, 2011
Is Your Loan Modification Application Stuck?
If you’re on the verge of losing your home, or you know someone who is, then you also know about the long, bureaucratic process involved in applying for a loan modification from a lender. The most common approach is to apply under the new Home Affordability Mortgage Program (HAMP), but lenders also accept modifications from mortgage holders because lenders really don’t want to take the house—they just want their money.
In many cases, however, the approval process takes longer than many homeowners can afford. But one expert believes it doesn’t have to be that way, and that there are solutions for homeowners whose applications seem stuck in the mud.
“Applying for a loan modification can be an extremely stressful process,” says Stephfan Nurse, CEO of Consumer Education—the makers of Mortgage Reduction software designed to help people through the modification process.
“Even if you send in your documents and your lender tells you everything is okay, you may still have a great amount of anxiety because you have no idea what the lender is doing with your file. You may not know what the next step is and how long it takes to move through each step in the process. Your lender may tell you what the next step is, but you may not understand why it will take so long. There are reasons, however, why the process can get stuck, and there are ways to move that process along, if you understand what goes on behind the scenes.”
Nurse’s tips for making the process smoother include:
• Account Numbers – It often happens that when you fax your paperwork to your lender, the lender either says they lost your paperwork or they just didn’t receive it all. This isn’t because they are incompetent. It’s because they receive thousands of faxes each day, and they use an image scanning technology to capture them all and place them in the appropriate file. In that system, a cover sheet that has your account number on it will get placed correctly, but the following sheets that lack your account number can be easily misplaced. The solution is to put your account number on every page of your paperwork, so they have a better chance of placing all your paperwork in your file.
• Complete the Paperwork – When your file gets assigned to a document manager, typically about 30 days after you first applied for the modification, the document manager’s job is to check to make sure all your required documents are ready to be submitted to the negotiator/specialist for review. If you have an incomplete file, even if you’re missing just one single required document, the document manager will note your account as having an incomplete file and move on to the next file to review. At this point, a generic letter is automatically mailed to your home requesting the additional information your file lacks. This letter can take up to two weeks to get to you, and then another two to four weeks before they look at your updated information. The key is to never send an incomplete package to your lender. It can lead to a delay or even a flat out denial.
• Follow Up – Finally, follow up every week with your lender to make sure all the documents they have are up to date. Don’t worry about being a pest. After all, it’s your house on the line if things get stuck in neutral. If you do this consistently, you will avoid getting caught in the delay cycle.
“The process is like any other, and it can be rife with mistakes and bureaucratic snafus,” Nurse adds. “But if you take the steps to reduce the opportunities for error, your application can move through the process much faster and you’ll have a much better chance at being approved.”
In many cases, however, the approval process takes longer than many homeowners can afford. But one expert believes it doesn’t have to be that way, and that there are solutions for homeowners whose applications seem stuck in the mud.
“Applying for a loan modification can be an extremely stressful process,” says Stephfan Nurse, CEO of Consumer Education—the makers of Mortgage Reduction software designed to help people through the modification process.
“Even if you send in your documents and your lender tells you everything is okay, you may still have a great amount of anxiety because you have no idea what the lender is doing with your file. You may not know what the next step is and how long it takes to move through each step in the process. Your lender may tell you what the next step is, but you may not understand why it will take so long. There are reasons, however, why the process can get stuck, and there are ways to move that process along, if you understand what goes on behind the scenes.”
Nurse’s tips for making the process smoother include:
• Account Numbers – It often happens that when you fax your paperwork to your lender, the lender either says they lost your paperwork or they just didn’t receive it all. This isn’t because they are incompetent. It’s because they receive thousands of faxes each day, and they use an image scanning technology to capture them all and place them in the appropriate file. In that system, a cover sheet that has your account number on it will get placed correctly, but the following sheets that lack your account number can be easily misplaced. The solution is to put your account number on every page of your paperwork, so they have a better chance of placing all your paperwork in your file.
• Complete the Paperwork – When your file gets assigned to a document manager, typically about 30 days after you first applied for the modification, the document manager’s job is to check to make sure all your required documents are ready to be submitted to the negotiator/specialist for review. If you have an incomplete file, even if you’re missing just one single required document, the document manager will note your account as having an incomplete file and move on to the next file to review. At this point, a generic letter is automatically mailed to your home requesting the additional information your file lacks. This letter can take up to two weeks to get to you, and then another two to four weeks before they look at your updated information. The key is to never send an incomplete package to your lender. It can lead to a delay or even a flat out denial.
• Follow Up – Finally, follow up every week with your lender to make sure all the documents they have are up to date. Don’t worry about being a pest. After all, it’s your house on the line if things get stuck in neutral. If you do this consistently, you will avoid getting caught in the delay cycle.
“The process is like any other, and it can be rife with mistakes and bureaucratic snafus,” Nurse adds. “But if you take the steps to reduce the opportunities for error, your application can move through the process much faster and you’ll have a much better chance at being approved.”
Tuesday, August 30, 2011
Pending Home Sales Slip in July but up Strongly from One Year Ago
Pending home sales declined in July but remain well above year-ago levels, according to the National Association of REALTOES®. All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, says sales activity is underperforming. “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he says. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”
The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.
“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun says. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”
The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, says sales activity is underperforming. “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he says. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”
The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.
“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun says. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”
Wednesday, August 17, 2011
IRS's top 10 tax tips for home sellers
From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful.
Last week the agency released "Ten Tax Tips for Individuals Selling Their Home," (IRS Summertime Tax Tip 2011-15).
Here are the IRS's top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.
Last week the agency released "Ten Tax Tips for Individuals Selling Their Home," (IRS Summertime Tax Tip 2011-15).
Here are the IRS's top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.
Monday, August 15, 2011
TransUnion: Mortgage Delinquencies Plummeted in Second Quarter
The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) decreased for the sixth consecutive quarter, dropping to 5.82 percent at the end of the second quarter in 2011 according to a quarterly analysis of credit-active U.S. consumers by TransUnion.
Although mortgage delinquencies were expected to continue to drop, the Q2 2011 TransUnion data released recently shows mortgage delinquency rates improved on a quarterly basis by 5.98 percent, more than any time since the recession officially ended two years ago.
“While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores,” says Tim Martin, group vice president of the U.S. Housing Market in TransUnion’s financial services business unit. “Not only are these consumers less likely to default if house prices continue to edge downward throughout the year, but their willingness to repay their debt obligations in the face of high unemployment rates is greater. It is because of these dynamics that lenders today take a much closer look at the borrower’s income history and overall debt situation than before the recession began in 2007.”
Between the first and second quarters of 2011, 49 states and the District of Columbia experienced declines in their mortgage delinquency rates with Vermont being the only state to experience an increase. On a more granular level, 79 percent of metropolitan areas saw declines in their mortgage delinquency rates in Q2 2011. This is an improvement compared to Q1 2011 when 68 percent of metropolitan statistical areas (MSA) experienced a decline their mortgage delinquency rates. In Q4 2010, only 44 percent of MSAs experienced such a decline.
TransUnion forecasts that mortgage borrower delinquency rates will continue to drift downward for the remainder of 2011, as economic conditions begin to slowly recover and tighter lending standards offset the impact of falling home prices.
“Mortgage delinquencies have shown six straight quarters of improvement and the pace of the improvement seems to be picking up speed. This is encouraging news. However, at their current level, nearly three times the pre-recession ‘norm,’ and the current pace of improvement, we may not see ‘normal’ delinquency rates until the end of 2015,” says Martin.
Although mortgage delinquencies were expected to continue to drop, the Q2 2011 TransUnion data released recently shows mortgage delinquency rates improved on a quarterly basis by 5.98 percent, more than any time since the recession officially ended two years ago.
“While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores,” says Tim Martin, group vice president of the U.S. Housing Market in TransUnion’s financial services business unit. “Not only are these consumers less likely to default if house prices continue to edge downward throughout the year, but their willingness to repay their debt obligations in the face of high unemployment rates is greater. It is because of these dynamics that lenders today take a much closer look at the borrower’s income history and overall debt situation than before the recession began in 2007.”
Between the first and second quarters of 2011, 49 states and the District of Columbia experienced declines in their mortgage delinquency rates with Vermont being the only state to experience an increase. On a more granular level, 79 percent of metropolitan areas saw declines in their mortgage delinquency rates in Q2 2011. This is an improvement compared to Q1 2011 when 68 percent of metropolitan statistical areas (MSA) experienced a decline their mortgage delinquency rates. In Q4 2010, only 44 percent of MSAs experienced such a decline.
TransUnion forecasts that mortgage borrower delinquency rates will continue to drift downward for the remainder of 2011, as economic conditions begin to slowly recover and tighter lending standards offset the impact of falling home prices.
“Mortgage delinquencies have shown six straight quarters of improvement and the pace of the improvement seems to be picking up speed. This is encouraging news. However, at their current level, nearly three times the pre-recession ‘norm,’ and the current pace of improvement, we may not see ‘normal’ delinquency rates until the end of 2015,” says Martin.
Friday, July 29, 2011
Normal’ Home Prices Are Stabilizing
Prices of “normal” homes—those that aren’t foreclosures or short sales—are stabilizing and the numbers of future foreclosures are falling. That “sliver of good news for consumer spending” was included in CoreLogic’s July report on housing and market trends.
In May 2011, the firm’s Home Price Index excluding distressed sales only dropped 0.4 percent from a year ago, compared to a decline of 7.4 percent for the all transactions measured by the HPI. Even while including distressed sales, the HPI increased between March and April —the first time in more than six months—and was up again between April and May.
“These increases represent the resumption of seasonality in home prices and are a positive sign for the market. When disaggregating median prices by type of sale for the first complete month of the spring home buying season, it is clear that despite the whipsaw impact of the federal homebuyer tax credit, state homebuyer tax credits and increases in FHA premiums, non-distressed median existing and new prices are back to 2009 levels,” the report said.
Although the distressed sales share remains high, the geographical sources of distress are shifting and becoming more dispersed. As of December 2008, four of the top five largest distressed sales markets were all located in California, and the top five markets averaged a distressed sale share of 68 percent. As of April 2011, only two of the top five markets are in California and, more importantly, the top five average distressed share was 56 percent — a 12 percentage point decline relative to top markets in late 2008.
In May 2011, the firm’s Home Price Index excluding distressed sales only dropped 0.4 percent from a year ago, compared to a decline of 7.4 percent for the all transactions measured by the HPI. Even while including distressed sales, the HPI increased between March and April —the first time in more than six months—and was up again between April and May.
“These increases represent the resumption of seasonality in home prices and are a positive sign for the market. When disaggregating median prices by type of sale for the first complete month of the spring home buying season, it is clear that despite the whipsaw impact of the federal homebuyer tax credit, state homebuyer tax credits and increases in FHA premiums, non-distressed median existing and new prices are back to 2009 levels,” the report said.
Although the distressed sales share remains high, the geographical sources of distress are shifting and becoming more dispersed. As of December 2008, four of the top five largest distressed sales markets were all located in California, and the top five markets averaged a distressed sale share of 68 percent. As of April 2011, only two of the top five markets are in California and, more importantly, the top five average distressed share was 56 percent — a 12 percentage point decline relative to top markets in late 2008.
Wednesday, July 20, 2011
NAHB Applauds EPA Rejection of Renovation Clearance Testing Requirements
The National Association of Home Builders commends the U.S. Environmental Protection Agency for rejecting a proposal to add third-party clearance testing to the Lead: Renovation, Repair and Painting Rule (RRP).
“We’re pleased that the EPA listened to the concerns of remodelers about the extreme costs the proposed clearance testing would have imposed,” says Bob Peterson, NAHB Remodelers chair and a remodeler from Fort Collins, Colo. “Home owners are saved from spending a great deal of money on lead testing. If remodeling is more affordable, home owners will be able to hire an EPA-certified renovator to keep them safe from lead dust hazards during renovation.”
At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review (Improving Regulation and Regulatory Review, 76 FR 3821 issued on Jan. 21) concerning the impact of federal rules on small businesses and job creation.
The lead rule applies to homes built before 1978 and requires renovator training and certification, following lead-safe work practices, containing and cleaning dust, and record keeping.
Under the lead paint rule contractors have been required to wipe down the project area after completing remodeling or renovation work and match the result to an EPA-approved card to determine whether lead paint dust is still present—a process that EPA says is “effective at reducing dust lead levels below the dust-lead hazard standard.”
The proposal would have required contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing. Because of the cost of this as well as the waiting period for test results and the limited number of accredited labs nationwide, professional remodelers were very concerned about home owners’ willingness to undergo the process.
“The EPA has maintained its common sense approach to keeping families safe during renovation,” says Peterson. “Hiring trained professional remodelers to contain dust, use lead-safe work practices, and clean up has been shown to successfully minimize lead hazards and protect individuals from lead exposure.”
Several problems with the rule still remain. The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation. And last year the agency removed a key consumer choice measure—the opt-out provision—which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement. In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.
For more information, visit www.nahb.org.
“We’re pleased that the EPA listened to the concerns of remodelers about the extreme costs the proposed clearance testing would have imposed,” says Bob Peterson, NAHB Remodelers chair and a remodeler from Fort Collins, Colo. “Home owners are saved from spending a great deal of money on lead testing. If remodeling is more affordable, home owners will be able to hire an EPA-certified renovator to keep them safe from lead dust hazards during renovation.”
At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review (Improving Regulation and Regulatory Review, 76 FR 3821 issued on Jan. 21) concerning the impact of federal rules on small businesses and job creation.
The lead rule applies to homes built before 1978 and requires renovator training and certification, following lead-safe work practices, containing and cleaning dust, and record keeping.
Under the lead paint rule contractors have been required to wipe down the project area after completing remodeling or renovation work and match the result to an EPA-approved card to determine whether lead paint dust is still present—a process that EPA says is “effective at reducing dust lead levels below the dust-lead hazard standard.”
The proposal would have required contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing. Because of the cost of this as well as the waiting period for test results and the limited number of accredited labs nationwide, professional remodelers were very concerned about home owners’ willingness to undergo the process.
“The EPA has maintained its common sense approach to keeping families safe during renovation,” says Peterson. “Hiring trained professional remodelers to contain dust, use lead-safe work practices, and clean up has been shown to successfully minimize lead hazards and protect individuals from lead exposure.”
Several problems with the rule still remain. The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation. And last year the agency removed a key consumer choice measure—the opt-out provision—which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement. In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.
For more information, visit www.nahb.org.
Friday, July 15, 2011
Coldwell Banker Real Estate Issues International Housing Report
Coldwell Banker Real Estate LLC recently released a report on international housing markets, which compares similar four-bedroom, two-bathroom homes in 30 countries and more than 60 markets outside the United States and Canada.
Among the more affluent markets in the report is Neuilly-sur-Seine, France, located just four miles from the center of Paris and is the hometown of Nicolas Sarkozy, the current President of the French Republic. The city also serves as the headquarters for the global edition of The New York Times newspaper and The International Herald Tribune. A continent away in the opposite hemisphere, the tourist city of Salinas, Ecuador, is one of the many markets offering great affordability. It is also known for its proximity to the Pacific Ocean and year-round temperatures averaging 80 degrees Fahrenheit.
“As one of the world’s premier international real estate companies, Coldwell Banker has the pulse on what is happening in various global markets,” says Budge Huskey, president and chief operating officer, Coldwell Banker Real Estate LLC. “Increasingly we have seen that buyers are expanding their horizons when it comes to the number of countries under consideration for their investment.”
In addition to Salinas and Neuilly-sur-Seine, the Coldwell Banker report highlights some of the world’s most prominent cities, full of fun trivia and charming local facts:
• Paris, France, has been ranked as one of the top three European cities of the future by The Financial Times and produces more than one fourth of France’s total gross domestic product.
• Madrid, Spain, is the third largest city in the European Union and is considered the major financial center of Southern Europe.
• Rome is the capital and most populated city of Italy and has been ranked as one of the world’s 15 most important cities.
• Amsterdam is the financial and cultural capital of the Netherlands and home to seven Fortune 500 companies including ING Group and Royal Philips Electronics.
• Dublin houses more than one-quarter of the entire population of Ireland and is ranked 29th in the Global Financial Centres Index.
• Aruba is renowned for its white, sandy beaches, temperate waters and warm climate moderated by the trade winds of the Atlantic Ocean.
• Istanbul is the cultural, economic, and financial center of Turkey and at one time served as the capital of the Roman and Ottoman Empires.
• Mexico City, Mexico, is the country’s most important political, cultural, educational and financial center and boasts one of the world’s fastest growing economies with a gross domestic product expected to double by 2020.
The release of this international data follows the recent Coldwell Banker Home Listing Report, a comprehensive analysis of real estate markets throughout the U.S. and Canada. Additional information on the North American report can be found on the Coldwell Banker Home Listing Report website.
Among the more affluent markets in the report is Neuilly-sur-Seine, France, located just four miles from the center of Paris and is the hometown of Nicolas Sarkozy, the current President of the French Republic. The city also serves as the headquarters for the global edition of The New York Times newspaper and The International Herald Tribune. A continent away in the opposite hemisphere, the tourist city of Salinas, Ecuador, is one of the many markets offering great affordability. It is also known for its proximity to the Pacific Ocean and year-round temperatures averaging 80 degrees Fahrenheit.
“As one of the world’s premier international real estate companies, Coldwell Banker has the pulse on what is happening in various global markets,” says Budge Huskey, president and chief operating officer, Coldwell Banker Real Estate LLC. “Increasingly we have seen that buyers are expanding their horizons when it comes to the number of countries under consideration for their investment.”
In addition to Salinas and Neuilly-sur-Seine, the Coldwell Banker report highlights some of the world’s most prominent cities, full of fun trivia and charming local facts:
• Paris, France, has been ranked as one of the top three European cities of the future by The Financial Times and produces more than one fourth of France’s total gross domestic product.
• Madrid, Spain, is the third largest city in the European Union and is considered the major financial center of Southern Europe.
• Rome is the capital and most populated city of Italy and has been ranked as one of the world’s 15 most important cities.
• Amsterdam is the financial and cultural capital of the Netherlands and home to seven Fortune 500 companies including ING Group and Royal Philips Electronics.
• Dublin houses more than one-quarter of the entire population of Ireland and is ranked 29th in the Global Financial Centres Index.
• Aruba is renowned for its white, sandy beaches, temperate waters and warm climate moderated by the trade winds of the Atlantic Ocean.
• Istanbul is the cultural, economic, and financial center of Turkey and at one time served as the capital of the Roman and Ottoman Empires.
• Mexico City, Mexico, is the country’s most important political, cultural, educational and financial center and boasts one of the world’s fastest growing economies with a gross domestic product expected to double by 2020.
The release of this international data follows the recent Coldwell Banker Home Listing Report, a comprehensive analysis of real estate markets throughout the U.S. and Canada. Additional information on the North American report can be found on the Coldwell Banker Home Listing Report website.
Thursday, July 7, 2011
Mortgage Marvel Rate Trends Shows Jump in 30-Year Fixed Rates
Mortgage Marvel Rate Trends™, a daily survey of over 950 lenders, shows 30-year, fixed rates bouncing up 0.15% to 4.78% after setting a new six-month low last week.
With the increase in rates over the past week, 30-year fixed rates are 0.44% lower than the 6-month high of 5.22% achieved on February 10, 2011 and 0.58% above the ever-to-date low of 4.20% reached October 12, 2010.
Fifteen-year fixed rates also jumped, but to a lesser degree than the 30-year fixed, ending the week at 3.93% as compared to last week’s 3.85%. The increase in 5/1 ARM rates matched that of the 30-year fixed rate, jumping 0.16% to end the week at 3.80%. The rates for 30-year, fixed rate jumbo loans (typically loans over $417,000) increased just 0.03% to 5.48% this week from 5.45% last week.
With the increase in rates over the past week, 30-year fixed rates are 0.44% lower than the 6-month high of 5.22% achieved on February 10, 2011 and 0.58% above the ever-to-date low of 4.20% reached October 12, 2010.
Fifteen-year fixed rates also jumped, but to a lesser degree than the 30-year fixed, ending the week at 3.93% as compared to last week’s 3.85%. The increase in 5/1 ARM rates matched that of the 30-year fixed rate, jumping 0.16% to end the week at 3.80%. The rates for 30-year, fixed rate jumbo loans (typically loans over $417,000) increased just 0.03% to 5.48% this week from 5.45% last week.
Thursday, June 30, 2011
Pending Home Sales Turn Around in May
Pending home sales rose strongly in May with all regions experiencing gains from a year ago, pointing to higher housing activity in the second half of the year, according to the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 8.2 percent to 88.8 in May from an upwardly revised 82.1 in April and is 13.4 percent higher than the 78.3 reading in May 2010. The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
This is the first time since April 2010 that contract activity was above year-ago levels, and the monthly gain was the strongest increase since last November when the index rose 10.6 percent.
Lawrence Yun, NAR chief economist, said the improvement bodes well for home prices. “Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” he said. “Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago, including areas such as Hartford, Conn.; Indianapolis; Minneapolis; Houston; and Seattle.”
Pending home sales have trended up unevenly since bottoming last June, rising in seven of the past 11 months. “Home sales still could be 15 to 20 percent higher,” Yun said. “If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”
“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.
Yun cautioned that healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. “The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country,” he said.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 8.2 percent to 88.8 in May from an upwardly revised 82.1 in April and is 13.4 percent higher than the 78.3 reading in May 2010. The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
This is the first time since April 2010 that contract activity was above year-ago levels, and the monthly gain was the strongest increase since last November when the index rose 10.6 percent.
Lawrence Yun, NAR chief economist, said the improvement bodes well for home prices. “Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” he said. “Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago, including areas such as Hartford, Conn.; Indianapolis; Minneapolis; Houston; and Seattle.”
Pending home sales have trended up unevenly since bottoming last June, rising in seven of the past 11 months. “Home sales still could be 15 to 20 percent higher,” Yun said. “If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”
“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.
Yun cautioned that healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. “The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country,” he said.
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