AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Obama's Pick for Housing Agency Head Faces Big Headacheshttp://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/http://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/http://realestate.aol.com/blog/2013/05/03/mel-watt-fhfa/#commentsFiled under: ,

Mel Watt, FHFA nominee, applauded by Barack Obama By James O'Toole

The next head of the Federal Housing Finance Agency will have quite the task waiting. President Obama nominated Mel Watt, a Democratic congressman from North Carolina, this week to be the next head of the FHFA. Should Watt be confirmed by the Senate, he will play a critical role in shaping the future of the U.S. housing market.
Ever since the crisis hit in 2008, the FHFA has been in control of housing finance giants Fannie Mae and Freddie Mac, which own or guarantee more than half of all outstanding mortgages in the U.S., according to the Congressional Budget Office. "This position is far more than just a regulator," said Bartlett Naylor, a financial policy expert with the advocacy group Public Citizen. "Anyone with a mortgage intersects with Fannie and Freddie and therein with what Mel Watt will be responsible for at the FHFA."

At the top of the agenda for the FHFA is the question of whether it will reduce loan balances for struggling borrowers whose mortgages are backed by Fannie and Freddie. The outgoing head of the agency, Ed DeMarco, has opposed calls from the Obama administration and progressive groups to move ahead with such reductions. DeMarco has argued that principal reductions would shortchange taxpayers and could prompt borrowers who are current on their mortgages to deliberately fall behind.

Supporters of principal reductions say they could help stabilize the housing market and give the economy a boost. A study released this week by the CBO argued that the government could actually save money through an expanded principal reduction program because it would reduce the number of defaults and foreclosures. Some 1.2 million borrowers could be eligible for some form of principal forgiveness, the CBO said.

The Obama administration has tried to help underwater borrowers -- those who owe more than their homes are worth -- through the Home Affordable Modification Program, or HAMP. But that initiative has been limited in its effectiveness over the past few years, securing principal reductions for less than 120,000 borrowers as of the end of 2012. And it limits such reductions to mortgages that aren't controlled by Fannie and Freddie.

Some on the left have questioned Watt's independence in view of the substantial campaign donations he's received over the years from banks and other financial institutions. But he has also received large contributions from unions. And his nomination had drawn support from progressives -- including Massachusetts Senator Elizabeth Warren, AFL-CIO head Richard Trumka and advocacy group MoveOn.org -- who have praised his efforts in Congress to protect consumers.

Watt's confirmation process may still be contentious. Republican senators Bob Corker and Mike Crapo expressed concern about his nomination this week, calling on the Obama administration to articulate a plan for reducing government involvement in the housing market going forward.
That will be no easy task.

Back in 2006, just 30 percent of new mortgages were backed by the government, according to Inside Mortgage Finance. But as the housing sector cratered, private capital fled the market and the government's role expanded. In 2012, more than 86 percent of new mortgages had government backing. Fannie and Freddie -- known together as the GSEs, or Government Sponsored Enterprises -- sustained massive losses as the housing market went bust, requiring taxpayer bailouts that swelled to more than $187 billion. The companies have since paid the Treasury Department nearly $60 billion in dividends as they've returned to profitability, but it's unclear when they'll be completely free of their obligations and how they'll be managed in the future.

"What are the GSEs going to look like going forward and are we ever going to wean ourselves off of public money for mortgages and have a truly robust private mortgage market?" said Richard Green, director of the Luck Center for Real Estate at the University of Southern California. "Everybody agrees that we need to do something about it, but no one can come to agreement on it, so the new director faces a pretty large challenge as he tries to fix this."

See more on CNNMoney:
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Mel Watt To Run Federal Housing

 

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]]>Barack Obama housingFederal Housing Finance AgencyMel WattObama housing pickCNNMoney2013-05-03T11:30:00+00:00U.S. Pending Home Sales Rise In March, NAR Sayshttp://realestate.aol.com/blog/2013/04/29/pending-home-sales-march/http://realestate.aol.com/blog/2013/04/29/pending-home-sales-march/http://realestate.aol.com/blog/2013/04/29/pending-home-sales-march/#commentsFiled under: , ,

pending home sales rise in March

WASHINGTON -- Contracts to purchase previously owned U.S. homes rose in March, as the housing market continues to accelerate this year. The National Association of Realtors said Monday that its Pending Sales Index, based on contracts signed last month, rose 1.5 percent to 105.7. Activity in recent months has shown modest improvements, and contracts last month reached the highest level since April 2010.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 1.0 percent after a previously reported 0.4 percent slip in February. The housing upturn is expected to add support to the economy this year although there have been signs of weakness lately.

The inventory of homes for sale remains low, leading to a rise in home prices in most markets. The Realtors group said the market appears to be leveling off due to the supply shortage which has pushed up home values, putting a solid foundation under the housing recovery. "Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sale closings, but they should edge up modestly as the year progresses," said NAR chief economist Lawrence Yun in a statement.

Pending home sales were up 7.0 percent compared to March of 2012.

(Reporting by Margaret Chadbourn; editing by James Dalgleish.)

Stocks Turn Higher on Pending Home Sales



See more about pending home sales:
Spring Homebuying 'Stuck' Under Tight Inventory, NAR Says
Cities Where Housing Bubbles Could Be Starting to Form
The Home Bidding Wars Are Back!

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]]>housing marketnational association of realtorspending home salespending home sales march 2013sellers marketReuters2013-04-29T10:30:00+00:00How Climate Change Might Make Some Cities 'Uninhabitable'http://realestate.aol.com/blog/on/climate-change-impact-uninhabitable-cities/http://realestate.aol.com/blog/on/climate-change-impact-uninhabitable-cities/http://realestate.aol.com/blog/on/climate-change-impact-uninhabitable-cities/#commentsFiled under: , ,



House hunters are perpetually bombarded with lists of the next "hottest" neighborhoods: The next best areas to buy a home, where to invest in the future. But environmentally speaking, it can mean: Where not to live in the future, as a result of climate change. Environmentalists warn that some areas of the United States are not only especially vulnerable to the negative effects of climate change -- but are well on their way to becoming dangerous and downright uninhabitable.

As we observe Earth Day, it's important to note that climate change experts predict that in as early as the next 50 years, substantial portions of the United States could exceed the threshold for human survival. According to Frank Lowenstein, Climate Adaptation Strategy Leader at The Nature Conservancy, certain areas have already reached that point: many low-lying coastal areas are battered continuously by violent storms and floods, while desert communities are vulnerable to drought and unbearable heat. Lowenstein says that desert cities like Phoenix have already experienced an increase in average temperatures by three degrees (compared to around 1.5 degrees across the rest of the country). In 2011, Phoenix set a new record with an alarming 33 days of temperatures above 110 degrees Fahrenheit.

"The desert Southwest is, in many ways, the canary in the coal mine for the United States as a whole," Lowenstein told AOL Real Estate. "In the Southwest, extremes are taking the form of heat waves, drought and mega-fires. These impact people, nature, infrastructure and water availability."

Lowenstein predicts, on the basis of a recent scientific study, that there is even a 50/50 chance that Lake Mead -- the enormous reservoir of Colorado River water that hydrates the state of Arizona -- will go dry by the end of this decade. His thoughts are echoed by a recent article in Salon headlined "Phoenix May Not Survive Climate Change," which argues that the aptly-named Valley of the Sun already has exhausted all its local natural resources and is dependent on an "improbable infrastructure to suck water from a distant, dwindling Colorado River." Throw into the mix dropping water tables and increased water salinization, and Phoenix residents are merely "living on borrowed time," some experts have said.

While Phoenix pulls back the curtain on a shaky future for desert communities, Sandy and Katrina offer insights into how low-lying coastal cities can expect to fare from increasingly aggressive storms and steadily rising sea levels. Already, sea levels have risen 8 inches in the past century and are predicted to rise another 6.5 feet by the end of this century. (Some studies also suggest that global sea levels are rising 60 percent faster than the computer projections issued only a few years ago by the United Nations' Intergovernmental Panel on Climate Change.) According to a report by the Natural Resources Defense Council, climate change, coupled with local subsidence, could result in the waters of the Gulf of Mexico rising relative to land in New Orleans by as much as 4.6 feet in less than 100 years. In fact, if the impacts of the sea-level rise on wetlands remain unchecked, metropolitan New Orleans might become an island in the Gulf of Mexico.

And it's not just New Orleans that's threatened. "From Miami to Boston to San Francisco, sea level rise is a major threat to countless U.S. communities," Tara DePorte, the executive director of The Human Impacts Institute, told AOL Real Estate. Her thoughts are echoed by Carl Safina, marine biologist and host of the PBS Series "Saving the Ocean," who said that major coastal cities such as Los Angeles (depicted in the photo illustration above), Miami, Seattle and New York are at high risk. ("New York is just getting more frequent and severe storms that bring high water and flooding," said Safina. "Hurricane Sandy was climate change knocking -- and she has friends coming.") Safina said that cities are slowly beginning to realize the perils that they could face in the near future: Even cities that for years dismissed reports of climate change, or lagged in preparation for rising sea levels, are now making plans to fortify their beaches, harbors and waterfronts.

He is quick to add, however, that it's not just coastal or desert cities that need to worry: No city or neighborhood in the United States is truly safe from the effects of climate change.

"Warm places will get warmer, cool places will also get warmer, wet places will get wetter and dry places will get drier," Dr. Safina told AOL Real Estate. "In broad sweep that's what's happening and will likely happen. There is nowhere immune to climate change."

This story continues after the gallery below. Note: The gallery shows what coastal cities could look like if projections in sea level rises remain on track, according to Climate Central. Each set of photos shows what the area could look like in 2100, when sea levels are projected to be five feet higher than they are now, and in 2600, when they're projected to be 25 feet higher.

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What You Can Do

For residents of areas that are at high risk of becoming uninhabitable due to climate change, there are measures that can be taken to curb those effects. DePorte suggests that homeowners in "red flag" communities should incorporate sustainable features into their homes in the form of solar panels, greywater systems, waste composting, Energy Star appliances and rainwater catchment systems. Her thoughts are echoed by Safina, who added that the best thing residents, particularly in desert communities such as Phoenix, can do is to equip their homes with solar cells on roofs and make the most of geothermal energy.

On a wider scale, experts advise that all cities -- coastal or otherwise -- should be retrofitted for a low-carbon future through championing renewable energy sources in commercial buildings, ecologically responsible urban planning (fewer roads, more walking and bicycle routes), zero waste, water conservation measures and intensive urban agriculture. "Each city has different needs depending on the local impacts of climate change," admitted DePorte. "But a 'climate smart' city would incorporate those elements into their planning and retrofitting."

According to Safina, however, cities like Phoenix are simply in over their heads and require more drastic measures in order to survive the coming decades. "Depopulate," Safina advised residents of Sun Valley and other arid desert cities in America's Southwest. "There are too many people there for the water available." Instead, he and other experts suggest moving to areas that are "cool, high and have very abundant water."



See also:
Solar Power at Home Saves Money
Green Living for Renters
7 Green Home Trends: From Baby Steps to Extreme Updates

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Sandy, The Fingerprint Of Climate Change

 

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]]>cities vulnerable to floodclimate changeclimate change impacts citiesearth day 2013global warming solutionsphoenix azKrisanne Alcantara2013-04-22T07:00:00+00:00Lessons for Boston in New York City's Recovery From 9/11?http://realestate.aol.com/blog/on/lessons-boston-housing-from-911/http://realestate.aol.com/blog/on/lessons-boston-housing-from-911/http://realestate.aol.com/blog/on/lessons-boston-housing-from-911/#commentsFiled under: ,

Boston Marathon bomb explosion

By Colin Croughan and Graham Wood

Realtor Vickie Cox can't help but think about her native New York as Boston struggles to cope with the tragic bombings at Monday's Boston Marathon. She's an agent at the Rye, N.Y., office of Sotheby's International Realty -- a suburb just 20 minutes outside of New York City -- and she remembers 9/11 like it was yesterday. She also happened to be running in the Boston Marathon on Monday, and those terrible memories of the 2001 terrorist attacks came flooding back as she watched smoke pour over runners' heads.

"I was running down Boylston Street. ... I crossed the finish line and stopped with the other runners and started walking," Cox told AOL Real Estate. "It was no more than half a city block from the finish line, and suddenly there was a very, very loud, deafening boom from behind us.

"There was this mushroom cloud of white smoke. My first thought was that something had gone wrong with the marathon equipment or something by the finish line. Ten seconds later, the second explosion went off -- that was when everyone started running. It was very frightening, and being a New Yorker, I immediately looked to the sky. All of the sudden, it was fresh in my mind -- it reminded me very much of 9/11."

Cox was also reminded of something else: some of the lingering impact on that community immediately following 9/11. She remembers, for instance, how the Westchester County housing market took a dive in the months following the attacks. "The rental market completely fell off," Cox said. "There was a huge drop in the people being transferred [to our office], there was a great concern in Westchester for sure." (Of course, though many New York residents left the city after 9/11, any population dip has more than recovered since. The population in and around Lower Manhattan, where the Twin Towers fell, doubled between 2000 and 2010, according to Census data.)

Once the shock of Boston Marathon bombings wears off -- reports on Tuesday put the casualty count at three and the number of wounded at more than 170 -- one question might become: How will that city's neighborhoods be affected by the apparent terror attack? "It's really too soon to say," Cox said. "I'm unsure about what the effect will be. Boston is a beautiful place, a historic place, with a strong group of people and a strong community." Several big real estate firms with Boston branches declined to comment for this article, but Cox pointed out one thing: A lot of student housing is in the area where the blasts occurred. Might they be reluctant to come to the city's colleges. "Obviously, a drop in student enrollment means a drop in student housing," she said.

Many others doubt that the tragedy will have such an impact on Boston. One Facebook commenter responding to a question on AOL Real Estate as to whether the Boston Marathon bombings might scare people away from the city said: "A tragedy can happen anywhere at any time. Have people stopped moving to New York since 9/11? Have people stopped moving to Colorado since James Holmes?" Another added: "Wouldn't change my mind. ... Boston's a great city!"

Katerina Canyon, 37, a poet who was recently accepted to the Fletcher School at Tufts University in Boston, said that Monday's bombings won't stop her from moving there from Los Angeles. "The sad reality is that these bombings could have happened anywhere, and we cannot live our lives in perpetual fear of what may happen. Bad events aren't exclusive to one location. All you can do is try to live the best life you can while you have the chance."

Right now, Boston residents are reaching out to those displaced by the bombings. According to MainStreet.com, neighbors are using local websites to offer shelter, and Boston.com is hosting a forum where those affected by the bombings can reach out for help.

See also:
10 Most Diverse Neighborhoods in America
5 Cities Where Homes Are Still Cheap
Signs the Housing Recovery Has Moved Into Your Neighborhood

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Tragedy Hits Boston

 

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]]>911BostonBoston marathonboston marathon bombingBoston marathon explosionsBoston real estateNew YorkAOL Real Estate Editors2013-04-16T17:07:00+00:00U.S. Housing Starts Surpass 1 Million in Marchhttp://realestate.aol.com/blog/2013/04/16/housing-starts-march/http://realestate.aol.com/blog/2013/04/16/housing-starts-march/http://realestate.aol.com/blog/2013/04/16/housing-starts-march/#commentsFiled under: ,


By Martin Crutsinger

WASHINGTON -- U.S. builders broke ground in March on homes at a seasonally adjusted rate of 1.04 million, the fastest since June 2008. The gain was driven by a surge in apartment construction and showed continued strength in the housing market at the start of the spring buying season.

The Commerce Department says that builders increased their construction pace by 7 percent in March from February. Apartment construction jumped 31.1 percent to a seasonally adjusted rate of 392,000 -- the fastest pace since January 2006. Single-family home construction, which represents nearly two-thirds of the market, fell 4.8 percent to a seasonally adjusted 619,000. That was down from February's pace of 650,000, which was the fastest pace since May 2008.

Applications for building permits, considered a good barometer of future construction, declined 3.9 percent to an annual rate of 902,000, down from February's rate of 939,000 -- also nearly a five-year high.

Paul Ashworth, chief U.S. economist at Capital Economics, called the strong housing data "obviously good news." But he cautioned that the March surge was due to a big jump in the volatile area of apartment construction and it was likely that construction activity would drop in April.

Steady job growth, near record-low mortgage rates and rising home values have encouraged more people to buy. In response to higher demand and a low supply of available homes for sale, builders have stepped up construction. March's pace of homes started was nearly 46 percent higher than the same month in 2012. Housing construction fell 5.8 percent in the Northeast but showed gains in the rest of the country led by a 10.9 percent rise in the South. Housing construction was up 9.6 percent in the Midwest and 2.7 percent in the West.

Copyright 2013 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

See more on home construction:
U.S. Housing Starts Rise, Permits at 4 1/2-Year High
6 Cost-Saving Reasons to Buy New Construction
U.S. New-Home Sales Jump to Highest Since July 2008

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Pros and Cons of Buying a New Construction Home

 

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]]>economyhousing markethousing startsThe Associated Press2013-04-16T09:30:00+00:00Signs the Housing Recovery Has Moved Into Your Neighborhoodhttp://realestate.aol.com/blog/on/housing-recovery-signs-your-neighborhood/http://realestate.aol.com/blog/on/housing-recovery-signs-your-neighborhood/http://realestate.aol.com/blog/on/housing-recovery-signs-your-neighborhood/#commentsFiled under: , ,

Housing recovery signsJust because all the talking heads are saying "housing is back!" doesn't mean everyone is buying it. There's a high degree of skepticism surrounding the housing recovery, according to a recent survey by the MacArthur Foundation. According to the survey, 77 percent of homeowners don't believe the housing crisis is over, with some saying the worst is yet to come. That hasn't stopped the overwhelming chorus of economists and housing experts chanting about the real estate market being in a full-swing recovery. So how do you know if the housing recovery is real? Well, see for yourself.

There are a number of signs just outside your front door that can tell you whether your own neighborhood is experiencing a recovery. Housing is local, after all, and just because some parts of California are experiencing a housing frenzy doesn't mean people living on the opposite coast are. Click through the gallery below to see seven signs that can tell you whether your neighborhood is being nursed back to housing health.

Find homes for sale in your neighborhood.


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CEFs Banking on a Housing Recovery

 

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]]>housing markethousing recoveryhousing recovery neighborhoodssigns of housing recoveryGraham Wood2013-04-10T17:15:00+00:00Signed Contracts to Buy U.S. Homes Dips Slightlyhttp://realestate.aol.com/blog/2013/03/27/signed-contracts-buy-homes-down/http://realestate.aol.com/blog/2013/03/27/signed-contracts-buy-homes-down/http://realestate.aol.com/blog/2013/03/27/signed-contracts-buy-homes-down/#commentsFiled under: ,

Signed contracts to buy U.S. homes dips slightlyBy MARTIN CRUTSINGER

WASHINGTON (AP) - A measure of Americans who signed contracts to buy homes fell only slightly in February to the second-highest level in nearly three years. The report suggests sales of previously occupied homes will keep rising in the coming months.

The National Association of Realtors says its seasonally adjusted index for pending home sales fell to 104.8 in February. That's down from 105.2 in January, which was the highest reading since April 2010, when a homebuyer's tax credit was boosting sales.

There is generally a one- to two-month lag between a signed contract and a completed sale. In February, completed sales of previously occupied homes rose to the fastest pace in more than three years. The gains in both signed contracts and completed sales point to a housing recovery that is strengthening.

 

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]]>contractshome contract signingshome contractshome saleshousing markethousing market recoverypending home salesreal estate marketsigned contractsThe Associated Press2013-03-27T10:40:00+00:00New Home Sales Took a Tumble in Februaryhttp://realestate.aol.com/blog/2013/03/26/new-home-sales-fell-february/http://realestate.aol.com/blog/2013/03/26/new-home-sales-fell-february/http://realestate.aol.com/blog/2013/03/26/new-home-sales-fell-february/#commentsFiled under: , ,

new home sales: construction workers building a house

Sales of new U.S. single-family homes fell more than expected in February after hefty gains the previous month, but steady gains in home prices suggested the housing market recovery remains intact. The Commerce Department said on Tuesday sales dropped 4.6 percent to a seasonally adjusted annual rate of 411,000 units. Last month's decline followed a 13.1 percent jump in January.

Though January's sales pace was revised down to 431,000 units, it was still the highest level since September 2008. Economists polled by Reuters had expected sales to fall to 422,000-unit rate last month. Compared with February 2012, sales were up 12.3 percent, indicating the housing market recovery was on course. Sales are being hampered by a lack of supply of homes on the market in some major parts of the country.

While the inventory of new homes on the market rose 1.3 percent to 152,000 units, it was not far from record lows. According to recent government data, groundbreaking for single-family homes intended for sale continues to lag sales. Economists at Moody's Analytics warn that builders could struggle to keep up with demand, which could cause the new home market recovery to be uneven over the next several months.

The home resales market is also experiencing lean inventories. The recovery in the sector is being supported by record-low mortgage rates, which have been held down by the Federal Reserve's very accommodative monetary policy stance. New homes account for about 8 percent of the overall market.

At February's sales pace it would take 4.4 months to clear the houses on the market, up from 4.2 months in December. A supply of 6.0 months is normally considered as a healthy balance between supply and demand. The low months' supply should drive up new home prices.

The median sales price for a new home increased 3.0 percent to $246,800 and was up 2.9 percent from a year ago. Sales last month were dragged down by a 13.3 percent plunge in the Northeast and a 9.7 percent fall in the South. Sales only rose in the Midwest, touching the highest level since December 2011.

Reporting by Lucia Mutikani; editing by Neil Stempleman.


Pros and Cons of Buying a New Construction Home



See also:
6 Cost-Saving Reasons to Buy New Construction
U.S. New-Home Sales Jump to Highest Since July 2008

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]]>commerce departmentfebruaryhousing market recoveryNew Home Salesreal estate marketSingle-family home salessingle-family homesReuters2013-03-26T10:35:00+00:00Home Prices Post Best Yearly Increase Since 2006http://realestate.aol.com/blog/2013/03/26/home-prices-case-shiller-index/http://realestate.aol.com/blog/2013/03/26/home-prices-case-shiller-index/http://realestate.aol.com/blog/2013/03/26/home-prices-case-shiller-index/#commentsFiled under: ,

Home prices rise: home for sale sign

U.S. single-family home prices rose in January, starting the year with the biggest annual increase in 6½ years in a fresh sign that the housing market recovery remains on track, a closely watched survey showed on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas gained 1 percent month-on-month in January on a seasonally adjusted basis, topping expectations for 0.9 percent. Prices have been gaining since last February. On a non-seasonally adjusted basis, prices rose 0.1 percent.

Prices in the 20 cities climbed 8.1 percent year-over-year, also beating expectations for 7.9 percent. It was the biggest yearly increase since June 2006, when housing prices were on their way down as the market was starting to collapse. Average home prices were back to their autumn 2003 levels, though that still leaves them down about 30 percent from the 2006 peak.

All of the 20 cities showed gains on a yearly basis, with New York rising for the first time in over two years. Phoenix continued the strong rebound seen last year, rising 23.2 percent from the year before. Eight cities racked up double-digit gains, including San Francisco, up 17.5 percent, and Las Vegas, up 15.3 percent.

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The dollar slightly pared losses against the euro shortly after the data, while Treasures prices held steady at lower levels. U.S. stock index futures saw little reaction and Wall Street was poised to open higher. The housing market got back on its feet last year as prices rose, inventories tightened and sales improved. Stimulus efforts from the Federal Reserve are also keeping mortgage rates at historically low levels, which has helped spur demand. That momentum carried into 2013 and data last week showed home resales hit a three-year high in February.

Reporting by Leah Schnurr; editing by W Simon.

See also:
Buying a Home 44% Cheaper Than Renting, Despite Rising Prices
Another Housing Bubble? Recovery Shows Dangerous Signs, Reports Say
3 Reasons Your Home's Value Is Rising

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How to Evaluate a House's Asking Price

 

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]]>Case ShillerCase Shiller indexCase-ShillerCase-Shiller Indexhome priceshome prices risehousing markethousing market recoverysp case-shiller indexReuters2013-03-26T10:00:00+00:00U.S. Housing Starts Rise, Permits at 4 1/2-Year Highhttp://realestate.aol.com/blog/2013/03/19/u-s-housing-starts-rise-permits-at-4-5-year-high/http://realestate.aol.com/blog/2013/03/19/u-s-housing-starts-rise-permits-at-4-5-year-high/http://realestate.aol.com/blog/2013/03/19/u-s-housing-starts-rise-permits-at-4-5-year-high/#commentsFiled under: ,

By Christopher S. Rugaber

WASHINGTON -- U.S. builders started more houses and apartments in February and obtained permits for future construction at the fastest pace in 4½ years. The increases point to a housing recovery that is gaining strength.

The Commerce Department said Tuesday that builders broke ground on homes last month at a seasonally adjusted annual rate of 917,000. That's up from 910,000 in January. And it's the second-fastest pace since June 2008, behind December's rate of 982,000.

Single-family home construction increased to an annual rate of 618,000, the most in 4½ years. Apartment construction also ticked up, to 285,000. The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the Great Recession.

And the figures for January and December were also revised higher. Overall housing starts have risen 28 percent higher over the past 12 months. "The road ahead for housing is still, so far, looking promising," Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients.

Housing starts jumped in the Northeast and Midwest, while they fell in the South and West. Permits rose in the South, West and Midwest, falling only in the Northeast. The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

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In addition, more people are seeking their own homes after doubling up with friends and relatives in the recession. That's leading to greater demand for apartments and single-family homes to rent. Still, the supply of available homes for sale remains low. That has helped push up home prices. They rose nearly 10 percent in January compared with 12 months earlier, according to CoreLogic, the biggest increase in nearly seven years.

The number of previously occupied homes for sale has fallen to its lowest level in 13 years. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market. Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.

Homebuilders have become much more confident over the past year. But in March, a measure of homebuilder confidence fell for the second straight month over concerns that demand for new homes is exceeding supplies of land, building materials and workers. In the short term, that could slow sales. Still, the survey noted that the outlook for sales over the next six months rose to its highest level in more than six years.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.

Copyright 2013 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.


Pros and Cons of Buying a New Construction Home



See also:
6 Cost-Saving Reasons to Buy New Construction
U.S. New-Home Sales Jump to Highest Since July 2008

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]]>apartment buildingsbuilding permitshome constructionhome construction recoveryhousing markethousing market recoveryhousing startsThe Associated Press2013-03-19T09:58:00+00:00Happiest and Most Miserable Cities in Americahttp://realestate.aol.com/blog/2013/02/25/happiest-miserable-cities-america/http://realestate.aol.com/blog/2013/02/25/happiest-miserable-cities-america/http://realestate.aol.com/blog/2013/02/25/happiest-miserable-cities-america/#commentsFiled under: , ,

Miserable cities: Detroit

Need your morning coffee before you deal with chipper, happy-go-lucky people? Well, you might want to steer clear of California. Think life's too short to be a drag? Then Michigan isn't the place for you.

Forbes has released its annual list of the most miserable cities in the country, while at the same time, a study by the University of Vermont uncovered the happiest cities. For the downtrodden places, Forbes looked at factors including unemployment, violent crime, foreclosures and home prices (as well as less-serious indicators such as commute time and weather) to come up with its list of most miserable cities. The University of Vermont, on the other hand, analyzed more than 10 million geotagged tweets to find positive and negative terms. The cities that used the most positive terms in tweets, as you might guess, made the list of the happiest cities.

Cities in California make up the bulk of the happiest cities in America -- perhaps, in part, because the state's home price increases are among the most dramatic in the country. Cities in Michigan take the top two spots for the most miserable in the country -- and we all know why (because of depressing stories like this one). So is your town happy or sad? Click through the gallery below to see the top 10 most miserable and top 10 happiest cities in America.

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See also: Myths About the Real Estate Market
Where Decrepit Homes Fetch Top Dollar, When They Have Mountain Views
What Middle Class Living Looks Like Now

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]]>detroit most miserable cityhappiest citieshappiest cities in americamost miserable citiesmost miserable cities in americasaddest citiesGraham Wood2013-02-25T12:30:00+00:00Housing to Drive Economic Growth (Finally!)http://realestate.aol.com/blog/2013/01/28/housing-economic-growth/http://realestate.aol.com/blog/2013/01/28/housing-economic-growth/http://realestate.aol.com/blog/2013/01/28/housing-economic-growth/#commentsFiled under: , ,

housing recovery

By Chris Isidore

The bursting of the housing bubble plunged the economy into a recession from which it has yet to fully recover. But economists say this could finally be the year that housing lifts us out of the doldrums. Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. The rest were split fairly evenly between consumer spending, increased domestic energy production and stimulus from the Federal Reserve as major growth drivers.

"Homebuilding activity will likely remain the strongest growing component of the economy in 2013," said Keith Hembre, chief economist of Nuveen Asset Management. "After several years of excess supply, demand and supply conditions are now in much better balance."

Related: Find Homes for Sale in Your Area

Home sales rebounded to the strongest level in five years in 2012, as homebuilding bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market.

The economists surveyed also forecast that there will be just under 1 million housing starts this year -- roughly matching the 28 percent rise in homebuilding in 2012. Moody's Analytics is forecasting much stronger growth -- a 50 percent rise both this year and next year, which it estimates will create more than 1 million new jobs.

"There's a lot of pent-up demand for housing, and very little supply," said Celia Chen, housing economist for Moody's Analytics. "As demand continues to improve, homebuilders have nothing to sell. They'll have to build." She said that growth in building will mean adding not just construction jobs, but also manufacturing jobs building the appliances and furniture needed in the new homes, which in turn drives overall consumption higher.

Related: Mortgage Calculator: How Much Can You Afford?

And economists say the tight supply and renewed demand for housing should lead to higher home values -- about a 3.7 percent increase according to the survey.

"One of the most significant indirect effects from the housing recovery is the 'wealth effect' on consumers due to the recovery in home prices," said Joseph LaVorgna, chief U.S. economist of Deutsche Bank, who said better home values can affect both consumer psychology on spending as well as their actual finances.

"Even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets," he said.

Related: Housing Recovery in Full Swing, Data Shows

But even with the bullish outlook on housing, economists are still forecasting only a modest rise in the overall economy this year. The consensus estimate is for economic growth of about 2.4 percent in 2013, only a modest improvement from the 2012 growth rate of about 2 percent they're forecasting when the final numbers are in.

By far the biggest concern is a standoff on Capitol Hill. About three-quarters of those surveyed picked Congressional gridlock -- which could result in a cutback in federal spending -- as the biggest problem facing the U.S. economy. Other choices, such as the European sovereign debt crisis, continued high unemployment and increased government regulation, were much less of a concern.

"Washington is now the primary impediment to stronger economic growth," said Russell Price, senior economist of Ameriprise Financial.

See more on CNNMoney:
Most Dangerous U.S. Cities
Hardest-Hit Foreclosure Neighborhoods
America's Best Places to Live

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Johnson: Housing Recovery Has Legs

 

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]]>construction jobseconomic recoveryeconomyhousing economic recoveryhousing economyhousing recoveryhousing startsCNNMoney2013-01-28T08:30:00+00:00Pawn Mount Rushmore? Petition Calls for Mountain to Be Sold to Cover National Debthttp://realestate.aol.com/blog/2013/01/22/pawn-mount-rushmore/http://realestate.aol.com/blog/2013/01/22/pawn-mount-rushmore/http://realestate.aol.com/blog/2013/01/22/pawn-mount-rushmore/#commentsFiled under: ,

Mount Rushmore: Pawn it to pay off the national debt?

Any bright ideas on how to pay off the U.S. national debt? Sure, here's one: pawn Mount Rushmore. A petition submitted to the White House's official website calls for the mountain in Keystone, S.D., to be pawned off to the Federal Reserve if the Treasury is unable to cover the interest on the national debt when the debt ceiling is breached.

The petition is a response to the government's decision not to mint a $1 trillion coin to help pay off the national debt. Is pawning a historic monument a crazy idea? Maybe. But plenty of people on social media seem to interested in it. On Twitter, #pawnthemountain has been generating traffic -- and that's after #mintthecoin became a thing to push the $1 trillion coin idea forward.

The petition, created Jan. 14, states: "Now that #MintTheCoin is dead, our best option is clearly to sell Mount Rushmore to the Fed, and buy it back later once our cash flow problem is solved." Backers of the petition are aiming for 25,000 signatures by Feb. 13, but as of Tuesday morning, it only had 17.

So would pawning Mount Rushmore be a money fix for the government? Well, Mount Rushmore is one of six national parks in South Dakota that drew in $167,834,000 in tourism dollars in 2010, according to the National Park Service. Mount Rushmore features the faces of four former presidents, George Washington, Abraham Lincoln, Thomas Jefferson and Theodore Roosevelt, carved into the mountainside. It took took from 1927 to 1941 to complete the project.


UN Official Calls on US to Return Mount Rushmore to Native Americans



See also:
10 Best Housing Markets for Home Price Discounts
30% of U.S. Homeowners Are Mortgage-Free
New Mortgage Rule Lets Lenders Decide Who Can Afford Them

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]]>Mount RushmoreMount Rushmore salepawn Mount Rushmorepetition pawn mount rushmoreGraham Wood2013-01-22T13:37:00+00:00Housing Recovery: Halfway Back to Normalhttp://realestate.aol.com/blog/2012/12/21/housing-recover-halfway-normal/http://realestate.aol.com/blog/2012/12/21/housing-recover-halfway-normal/http://realestate.aol.com/blog/2012/12/21/housing-recover-halfway-normal/#commentsFiled under: , , , ,

Housing recoveryEach month, Trulia's Housing Barometer charts how quickly the housing market is moving back to "normal." We summarize three key housing market indicators: construction starts (Census), existing home sales (NAR), and the delinquency-plus-foreclosure rate (LPS First Look). For each indicator, we compare this month's data to (1) how bad the numbers got at their worst and (2) their pre-bubble "normal" levels.

In November 2012, home sales saw strong increases, and the delinquency-and-foreclosure rate held steady -- both signs of market improvement. However, new construction starts declined.

Hurricane Sandy appears to have lowered construction (and sales, to a lesser extent) in the Northeast. Average monthly construction starts were 14 percent higher nationally in October and November -- the months affected by Sandy -- than in the previous four months, but 5 percent lower in the Northeast. Average monthly home sales were 7 percent higher nationally in October and November than in the previous four months, but just 3 percent higher in the Northeast.

Construction starts dipped in November but remain strong. Starts in November were at an 861,000 annualized rate, down 3 percent month-over-month and up 22 percent year-over-year. For the past three months, construction starts have remained solidly above 800,000 -- the highest level since September 2008. Nationally, construction starts are 37 percent of the way back to normal.

Existing home sales rose once again in November. After climbing in October, existing home sales rose 6 percent month-over-month to 5.04 million in November-the highest level since November 2009. Sales are 73 percent back to normal. Even better, "distressed" sales (foreclosures and short sales) represent a declining share of overall sales, making way for more "conventional" home sales.

The delinquency-and-foreclosure rate maintained a new post-crisis low. In November, 10.63 percent of mortgages were delinquent or in foreclosure, down a hair from 10.64 percent in October. The combined delinquency-and-foreclosure rate is at its lowest level in four years and is 41 percent back to normal.

Averaging these three back-to-normal percentages together, the housing market is now 51 percent of the way back to normal, compared with 28 percent in November 2011. Trulia's Housing Barometer has jumped 5 points in each of the last two months. Does halfway back to normal mean the glass is half-full or half-empty? The half-empty view is that our three housing measures hit bottom (on average) in 2009, so it's taken the market a long time-three years-to get to the halfway mark. But the half-full view is that halfway back to normal is better than anyone -- myself included -- predicted for 2012 at the start of this year.




See more stories on Trulia Trends:
Housing in 2013: What's In, What's Out
2013's Top 10 Healthiest Housing Markets
"Renter Nation" Just A Myth: 93% of Millennial Renters Plan To Buy A Home Someday

 

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]]>construction startsdelinquencydelinquency-plus-foreclosure ratedelinquentexisting home salesforeclosureHousing BarometerHurricane SandyLPS First LookNARTruliaJed Kolko, Trulia Chief Economist2012-12-21T15:30:00+00:00Government Housing Help Benefits 1 Million Homeowners in 3rd Quarterhttp://realestate.aol.com/blog/2012/12/17/government-housing-help-benefits/http://realestate.aol.com/blog/2012/12/17/government-housing-help-benefits/http://realestate.aol.com/blog/2012/12/17/government-housing-help-benefits/#commentsFiled under: , ,

Government housing helpFor much of the last year, the housing market has generally been on a slow but steady path toward improvement, and that trend continued in November.

A number of federal initiatives to make consumers struggling in the housing market more financially capable seem to be working, according to the latest housing scorecard from the U.S. Department of Housing and Urban Development. For instance, in the month of November alone, federal initiatives such as the Home Affordable Modification Program helped 13,400 Americans obtain trial modifications for the terms of their home loans, which is down from the 15,200 who received them in the previous month. Another 16,000 received permanent modifications, though, and that was up from 13,800 the month before.

There were also 90,800 refinances through the Home Affordable Refinance Program, down from 98,900, the report said. But at the same time, mortgage modifications through the HOPE Now program increased slightly, to 60,600 from 59,500.

Related: See What Kind of Mortgage You Can Afford

In all, when accounting for all the above programs as well as the Federal Housing Authority's loss mitigation interventions, there were 972,300 counseled consumers in the latest quarter studied, up from just 420,400 in the prior three-month period, the report said. Since April 1, 2009, the total number of consumers helped through these programs stands at roughly 8.52 million.

"The Obama Administration's efforts to speed housing recovery are showing continued progress as the scorecard indicators highlight market momentum not seen since before the housing crisis - six consecutive months of rising home prices have bolstered homeowners equity, which is now $1.5 trillion higher than in April 2009," said HUD Acting Assistant Secretary for Policy Development and Research Erika Poethig.

Related: Refinancing? Here's How to Do It

However, Poethig also noted that despite the improvements, millions of Americans are still struggling under the weight of their mortgage obligations, particularly on homes that have not yet returned to being right-side-up after slipping underwater, the report said. For this reason, she urged Congress to accept President Barack Obama's latest proposal for rolling out more comprehensive refinancing tools for borrowers.

Experts say the housing recovery is still somewhat fragile, though home prices are still expected to appreciate at least through the end of next year. This might be a boon to struggling homeowners who owe more on their mortgage than their property is worth.

See more on Credit.com:
How Refinancing Can Affect Your Credit
Can You Really Get Your Credit Score for Free?
Why Refinance? Shorter Mortgages

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Rep. Campbell: Keep Government in Housing

 

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]]>government housing initiativesHAMPHARPmortgage modificationmortgage refinanceCredit.com2012-12-17T12:40:00+00:00Mortgage Interest Deduction Teetering on the 'Fiscal Cliff'http://realestate.aol.com/blog/2012/12/14/mortgage-interest-deduction-teetering-on-the-fiscal-cliff/http://realestate.aol.com/blog/2012/12/14/mortgage-interest-deduction-teetering-on-the-fiscal-cliff/http://realestate.aol.com/blog/2012/12/14/mortgage-interest-deduction-teetering-on-the-fiscal-cliff/#commentsFiled under: , ,

Mortgage interest deduction threatened by The impending fiscal cliff is causing lawmakers to consider many tough decisions and make every kind of consideration for getting the government back on budget. That has led to the proposed slashing of a popular tax break that helps homeowners save thousands every year.

The tax deduction that allows homeowners to write off the cost of their interest payments into their mortgages is now officially facing the chopping block as Democrats and Republicans work to sort out the nation's finances ahead of the "fiscal cliff" on Dec. 31, according to a report from Reuters. The tax cut costs the federal government about $100 billion a year, and is one of the largest being considered for elimination. Getting rid of it would reduce the nation's $1 trillion deficit by 10 percent, by itself.

"The mortgage interest deduction used to be a sacred cow that you couldn't touch; that's just not the case anymore," said Jaret Seiberg, senior policy analyst at Guggenheim Securities. "For the first time it's truly vulnerable. The difference now is that it is on the list of options that both liberals and conservatives are willing to consider."

Its size is the reason that it was once considered an untouchable tax break, the report said. The amount it saves homeowners every year is massive, and if that were to go away, it means thousands of dollars per family in additional costs every year. In all, about 35 million people are eligible for the deduction, which has been in the tax code, intact, for 26 years. Experts also say there are numerous loopholes in the deduction that allow it to be exploited.

Further, it's also worth noting that even if the deduction doesn't get axed as part of the fiscal cliff negotiations, it's still on very uncertain ground, the report said. If lawmakers decide to overhaul the nation's entire tax code next year -- which is believed to be a possibility -- the homeowner break could once again be up for consideration.

Of course, it's possible that not having the tax break could also endanger the housing recovery, as consumers might be less tempted to enter into homeownership because of the thousands of dollars in added costs they would have to take on to own a property over the course of many years.

Read more on Credit.com:
5 Things You Must Know to Understand the Fiscal Cliff
How a Mortgage Can Help (or Hurt) Your Credit
There's Another Fiscal Cliff & We're Heading Right For It

Hopes Fading for Pre-Christmas Fiscal Cliff Deal


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]]>fiscal cliff mortgage interestfiscal cliff negotiationsmortgage deduction fiscal cliffmortgage interest deductionmortgage interest deduction fiscal cliffmortgage interest deduction savingsCredit.com2012-12-14T14:12:00+00:00Mortgage Interest Deduction: Most Consumers Don't Use the Tax Break, Report Findshttp://realestate.aol.com/blog/2012/12/10/mortgage-interest-deduction-most-consumers-dont-use-the-tax-br/http://realestate.aol.com/blog/2012/12/10/mortgage-interest-deduction-most-consumers-dont-use-the-tax-br/http://realestate.aol.com/blog/2012/12/10/mortgage-interest-deduction-most-consumers-dont-use-the-tax-br/#commentsFiled under: , ,

Mortgage interest deductionDuring the arduous and acrimonious debate over the fiscal cliff, one potential part of the solution that has come up often is the elimination of the mortgage interest tax break. And while many lawmakers treat it as a sacred cow, it turns out the majority of consumers don't take advantage of it.

The average deduction taken as part of this tax break can save consumers more than $12,000 per year in some states, but shockingly, few people actually choose to take advantage of the deal, according to new research from USA Today based on data from the Internal Revenue Service. In 2010, only 26 percent of consumers across the country wrote off the interest that they paid on their mortgage over the course of the year as part of their taxes, and in many states, that rate is even lower.

In North Dakota and West Virginia, for example, just 15 percent of taxpayers take this deduction -- though it's important to note that not all taxpayers have a mortgage for which they can deduct interest, the report said. Other states in which fewer than 20 percent of consumers claim this tax break include Mississippi (17 percent), Louisiana (18), Arkansas (19), Florida (19) and South Dakota (16).

By contrast, other states, such as nearly all of New England and the Pacific Northwest, have rates of more than 30 percent of taxpayers claiming this deduction, the report said. However, Maryland, at 37 percent, is tops in the country by a good margin. The next closest is Connecticut at 34 percent.

Nonetheless, proponents of keeping the deduction in place say that the tax break, which is intended to encourage more consumers to take on homeownership by making it more affordable, is vital to the state of the entire housing market, the report said. On the other hand, those who think it's a prime target in the fiscal cliff debates point out that eliminating it could save the federal government $108 billion annually.

"This is going to have an impact on the real estate market, especially as we're just coming out of a recession," Mark Feinroth, a lobbyist for the Maryland Association of Realtors, told USA Today. "It's a particularly bad time to bloody the nose of the home industry again."

Consumers will have to keep a close eye on the fiscal cliff debates going forward because it will likely impact their finances in several ways in the new year.

See more on Credit.com:
The 5 Things You Must Know to Understand the Fiscal Cliff
How a Mortgage Can Help (or Hurt) Your Credit
5 Year-End Tax Tips for 2012

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Tax Moves to Make Now

 

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]]>fiscal cliff mortgage interestfiscal cliff negotiationsfiscal cliff talksmortgage interest deductionmortgage interest tax deductionmortgage tax breakmortgage tax deductionCredit.com2012-12-10T14:36:00+00:00Opinion: In Obama's Second Term, What Will Happen to the Housing Market?http://realestate.aol.com/blog/2012/11/07/obamas-second-term-housing-market-impact/http://realestate.aol.com/blog/2012/11/07/obamas-second-term-housing-market-impact/http://realestate.aol.com/blog/2012/11/07/obamas-second-term-housing-market-impact/#commentsFiled under: , ,



Mark Calabria (pictured at left) is the director of financial regulations studies at the Cato Institute, a public policy research organization.

The most glaring absence during the hard-fought campaign between President Barack Obama and Mitt Romney was any offer of substance regarding the housing market. It was, after all, a housing bubble-driven financial crisis that helped propel Obama to victory in 2008 and recent improvements in the housing market that perhaps helped secure his re-election Tuesday night. So housing policy was always there, even if only in the background. What does the next four years likely hold for the housing market?

Well, Obama's victory means that Federal Reserve Chairman Ben Bernanke will keep his job, at least until the end of his term in 2014. That means the Fed's policy to hold interest rates at record lows will continue. While mortgage spreads over Treasuries have been elevated, mortgages overall will likely hover near historic lows over the next year, providing some upward pressure on housing prices.

Regardless of who the election winner is, the primary driver of housing policy will be the housing market. With home prices recovering in many areas and foreclosures on a slow but steady decline -- due in part to rising prices and an improving labor market -- Obama is likely not to introduce new foreclosure prevention programs in his second term. With Republicans maintaining their control of the House, legislative efforts to force broad-based reductions in underwater mortgage balances are essentially dead. While re-tools of Obama's signature HAMP and HARP programs are likely, those will be modest. In many ways, I believe the White House is eager to put the foreclosure crisis behind them and move on.

With Obama's victory and modest Democrat gains in the Senate, the president will likely renew attempts to put in place key appointments. Among those are replacing Ed DeMarco, the Federal Housing Finance Agency's acting director. Not only will this appointment influence the modifications efforts (or lack thereof) of Fannie Mae and Freddie Mac, but it will also give the administration a larger voice in Congressional debates over the future of the government-backed mortgage giants. Given the significant differences between House Republicans, Senate Democrats and the White House on reform of Fannie and Freddie, both companies will likely still be in their conservatorship limbo at the end of Obama's second term.

The Senate is also likely to act on a permanent housing commissioner to administer the Federal Housing Administration. Such an appointment will become all the more critical, as, in my opinion, FHA will require some amount of taxpayer assistance in the years ahead. If such amounts exceed $10 billion, which I believe they will, then legislative reform of FHA becomes a strong possibility with a focus on reducing taxpayer losses.

Romney repeatedly spoke of tax reform with an emphasis on reducing deductions in order to lower rates. Despite a vocal minority within progressive circles calling for reducing the mortgage interest deduction and using the money for rental assistance, an Obama victory largely guarantees the continued existence of the mortgage interest deduction in its current form. One can almost hear the Realtors breathing a sigh of relief.

With Obama's re-election comes the likely permanence of the Dodd-Frank Act and its newly created Consumer Financial Protection Bureau. Once the battles over CFPB's existence die down, I believe bipartisan attention will shift to the agency's regulation of the mortgage market. Both Dodd-Frank's Qualified Residential Mortgage and Qualified Mortgage definitions have raised concern across the political spectrum. Whether it's a concern that low-income and minority families will be denied credit due to the restrictions of QRM/QM, or that the regulations will hold back the overall mortgage/housing market, a more substantial debate will begin, ultimately resulting in a softening of the provisions of QRM/QM.

Much of what I have discussed lies on the regulatory side of housing policy. To a large extent, the real action will remain there. Whoever was going to win was going to face some stark budget realties. With little chance of wholesale entitlement reform, discretionary spending will be squeezed. Federal assisted housing programs have their peak funding (in real terms) behind them. While the overall housing market will continue to gain momentum over the next four years, that momentum will be slow. The days of real double-digit house price appreciation are years away. Obama will not be riding a housing bubble nor will he be tasked with cleaning up another bust. That will have to wait for future administrations.

See also:
Obama's Housing Policy Wins and Losses
Is the Housing Market Better Off Than Four Years Ago? Survey Says No
Mortgage Lenders Get Boost From Obama's Housing Efforts

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Markets Reacting to Uncertainty, Not Obama

 

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]]>Barack ObamaCato InstituteObama housing marketObama housing policyObama second termObama second term housingMark Calabria2012-11-07T13:25:00+00:00Presidential Election 2012: Obama's Housing Policy Wins and Losseshttp://realestate.aol.com/blog/2012/11/02/presidential-election-2012-obama-housing-policy-wins-losses/http://realestate.aol.com/blog/2012/11/02/presidential-election-2012-obama-housing-policy-wins-losses/http://realestate.aol.com/blog/2012/11/02/presidential-election-2012-obama-housing-policy-wins-losses/#commentsFiled under: , ,

Obama housing policyBy John Kelly

In their platform, Democrats tell it this way: President Barack Obama's "swift action" stabilized a crisis-stricken housing market and helped millions of American families stave off foreclosure through restructured loans that shaved hundreds of dollars off their mortgage bills. The president "cracked down" on abusive lenders, held financial giants accountable and leveled the playing field for home buyers.

Mitt Romney paints a somewhat different picture.

"President Obama's only plan to address the housing crisis was the same plan he used to try to fix the economy: Spend more taxpayer money on big-government programs," Romney says on his campaign website. The Republican presidential candidate blames Obama for cooking up an "alphabet soup" of "big-government programs" that hindered the housing recovery, saddled taxpayers with a risky glut of government-backed mortgages and created a marketplace of uncertainty where credit-worthy borrowers too often left banks empty handed.

The housing market was on a calamitous trajectory when Obama took office. Perhaps the most common criticism is that Obama was over-cautious in trying to reverse its course. During his term, millions of homeowners have received foreclosure notices, and home values continued to erode through 2011, pushing the nation's borrowers deeper underwater. At a July 2011 town hall meeting, the president acknowledged misreading how long it would take for the housing market to bottom out. Despite having already revamped his housing programs, Obama admitted a need to again go "back to the drawing board."

A little over a year later, home values just saw their biggest quarterly gain in six years, and foreclosure filings hit a five-year low in September. Negative equity levels, while still distressing, are improving.

Zillow's chief economist, Dr. Stan Humphries, said the trajectory of the housing recession was fixed long before Obama took office. Home values relative to income levels had ballooned to 50 percent greater than historical norms. When markets felt the first tremors of home-value declines in 2006, Humphries said, a market correction was already inescapable.

"To suggest that something could have prevented this correction is like saying one can defy gravity," Humphries said. "I believe Obama's housing policies have been more about helping people caught up in the maw of this correction, and it was a mistake to perceive these initiatives as having the ability to change the overall trajectory of home prices."

"Simply put, these economic forces needed to play out," Humphries said.

Below are highlights of the Obama administration's housing initiatives:

March 2009

The Obama administration created the Home Affordable Modification Program (HAMP), designed to help as many as 4 million homeowners at risk of foreclosure reduce their monthly mortgage payment through modified loans. By offering financial incentives to lenders, the administration hoped participation would be swift and widespread. It wasn't. Three and a half years later, the number of homeowners to receive a permanent modification recently surpassed 1 million, according to the U.S. Treasury, which puts their median monthly savings at $539.

March 2009

The Home Affordable Refinance Program (HARP) was launched to help underwater -- or nearly underwater -- homeowners refinance into lower-rate loans without having to buy mortgage insurance. Only homeowners with government-backed loans are eligible. The program, roundly criticized early on, was initially limited to homeowners who owed at least 80 percent of the value of their home but no more than 105 percent. Participation was meager. In response, the administration raised the negative equity cap to 125 percent, then eliminated it altogether this year. As a result, HARP refis surged from 93,000 in the last quarter of 2011 to more than 180,000 in the first quarter of 2012, according to the Federal Housing Finance Agency.

November 2009

Obama extended an $8,000 tax credit to first-time home buyers, a program begun under the previous administration, giving home buyers until June 2010 to close on their purchase and still remain eligible. Humphries has referred to the program as a $30 billion "waste of taxpayer money."

July 2010

Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which included provisions meant to reform the mortgage lending industry and protect consumers from aggressive lending practices. For starters, lenders will soon face penalties if they fail to consider a borrower's ability to repay a loan. The law's effectiveness ultimately depends on a watchdog agency the law created, the Consumer Financial Protection Bureau. So far, the bureau has made strides to help home buyers more effectively shop for mortgages by requiring lenders to provide simplified disclosure forms that clearly spell out the cost and risks of a loan. And the bureau is soon expected to define criteria for "qualified mortgages," which will guide mortgage companies in deciding which borrowers are able to repay a loan.

January 2011

The U.S. Treasury rolled out its Second Lien Modification Program -- 2MP. Like HAMP, it offers incentives for lenders to reduce principal payments, but on second mortgages. To qualify, homeowners must have a HAMP modification on their first mortgage. To date, almost 94,000 homeowners have received second-mortgage modifications, saving a median $159 per month, according to government figures.

December 2011

HARP 2.0 took effect, expanding eligibility to deeply underwater homeowners and lowering, or eliminating, fees for some borrowers. Mortgage lenders were given protections against responsibility for any fraud committed on the original loan. Participation has increased.

January 2012

Obama announced in his State of the Union address that he was sending to Congress "a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates." The plan, nicknamed HARP 3.0, would expand the program to homeowners with privately held loans and be paid for through a new fee on large financial institutions. It has not passed.

The administration expanded HAMP eligibility to borrowers with higher debt loads and tripled incentives to banks for cutting principal on loans. Extending the program through 2013, the administration also pledged to offer incentives to Fannie Mae and Freddie Mac to make principal reductions on certain loans instead of continuing to limit the program to private mortgage lenders.

February 2012

The five largest mortgage lenders agreed to a $25 billion government settlement over alleged foreclosure abuses. The settlement called for the banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial -- to collectively set aside $20 billion in write-downs for underwater borrowers in danger of foreclosure. The remaining $5 billion would be paid to federal and state governments, with roughly $1.5 billion being redistributed in $2,000 checks to 750,000 homeowners who were wrongly foreclosed upon during the housing crisis. After four months, the banks had given $10.56 billion in relief to around 138,000 borrowers. A report found that the vast majority -- nearly $8.7 billion -- went to forgiven debt in short sales, while loan modifications accounted for roughly $750 million in principal reductions.

October 2012

The Justice Department sues Bank of America for $1 billion, the latest in a string of civil lawsuits brought against the country's largest financial firms. The case accuses Bank of America of running a reckless mortgage scheme called "hustle," in which it allegedly off-loaded "defective" loans to Fannie Mae and Freddie Mac, effectively saddling taxpayers with the risky loans.

See more on Zillow:
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Romney's Stance on Housing: 'Let it Run its Course'
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More on AOL Real Estate:
Find out how to calculate mortgage payments.
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]]>barack obamaelection 2012mitt romneyobama housing initiativesobama housing policyZillow2012-11-02T11:25:00+00:00Key to the Housing Recovery? It's Still Investorshttp://realestate.aol.com/blog/2012/10/26/the-key-to-the-housing-recovery-is-still-investors/http://realestate.aol.com/blog/2012/10/26/the-key-to-the-housing-recovery-is-still-investors/http://realestate.aol.com/blog/2012/10/26/the-key-to-the-housing-recovery-is-still-investors/#commentsFiled under: , ,

for-sale homes in housing recovery

By Nin-Hai Tseng

After witnessing one too many false starts in the recovery of America's housing market, it's hard not to be a little skeptical about what kind of recovery we should expect. Will it improve steadily, or experience choppy stops and starts?

One way to determine that is by looking at who is driving home sales: Is it investors buying up homes in bulk with hopes of turning a profit or individual buyers simply looking to live in the homes they purchase?

There isn't an easy answer, but the Federal Reserve Bank of Atlanta recently looked into it. The topic is especially timely, given that Wall Streeters are increasingly turning foreclosed properties into rentals as an investment. Whereas, in the past, smaller investors typically played landlord, big investors such as private equity firm Blackstone Group are betting that the homes they buy today will turn decent profits years from now.

Related: Want to Buy a Home? Check Out AOL Real Estate's Listings

If investors drive the housing recovery, sales could eventually drop off once prices rise to a point where it's not as worthwhile for them to buy. By contrast, we might see a longer and more sustainable rally if individual buyers dominate home sales.

Both investors and typical buyers have signaled bigger appetites to buy. In September, sales of existing homes, which investors tend to flock to, rose by 11 percent to a seasonally adjusted annual rate of 4.75 million from a year earlier, according to the National Association of Realtors. And for seven months in a row, the median price for existing homes rose -- it's now $183,900, up 11.3 percent from the previous year. Sales of new homes, which generally attract individual buyers, have risen as well. The median price for a new house rose to $242,400 in September, 11.5 percent higher than a year earlier, the Commerce Department reported Thursday.

For now, it's unclear who is driving the recovery. In the Southeast region, the Fed estimates that investors made up about 25 percent of home sales. This is roughly what others have estimated nationally, based on a survey of Realtors called the Multiple Listing Survey. To be sure, though, the share is likely higher because the survey doesn't reflect bulk sales to investors by banks or at auctions where there's usually no Realtor involved.

Nonetheless, investors' part in the recovery has steadily risen. And if trends continue, they could surely dominate home sales. In 2011, single-family and condo sales sold to investors rose by 65.3 percent to 1.23 million properties nationwide, compared with 749,000 the previous year. That reflects 30 percent of existing home sales, according to California-based real estate investment firm Norada Real Estate Investments. Many of these sales have occurred in markets that were burned the most, says Marco Santarelli, a broker at Norada. That includes Miami, Phoenix, Las Vegas, Sacramento and Riverdale, CA.

That's similar to the way Fed analyst Jessica Dill sees it. In her look across the Southeast, the share of home sales to investors markedly dropped to 20 percent from 25 percent when Florida - among the states hardest hit from the housing crash - was excluded. This suggests investors may be driving the recovery especially in markets that saw the worst of the housing bust. If that continues, sales could eventually decline unless individual buyers are able to pick up where investors leave off. Not to say that would be less than a genuine recovery, but at the end of the day, investors can move the market only so far.

The rest will depend on consumers and a host of uncertain factors, from an improving jobs market to being able to qualify for a home loan.

See more on CNNMoney:
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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

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]]>home saleshomebuyinghousing recoveryinvestorsinvestors buying homesreal estate investorsFortune Magazine2012-10-26T11:30:00+00:00