Foreclosure Inventory Rate Lowest Since 1999
BY BRAD BECKETT ON JUNE 17, 2019
According to the latest CoreLogic monthly Loan Insights Report, 4% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in March, 2019. These loans represent a 0.3-percentage-point decline in the overall delinquency rate compared with March 2018 and was the lowest for the month of March in 13 years. In addition, they report that the foreclosure inventory rate (measuring the share of mortgages in some stage of the foreclosure process) was 0.4% and was the lowest for any month since January, 1999.
“The increase in the overall delinquency rate in 42% of states most likely indicates many Americans were caught off guard by their expenses in early 2019,” said Dr. Frank Nothaft, chief economist at CoreLogic. “A strong economy, labor market and record levels of home equity should limit delinquencies from progressing to later stages.”
Are Record low Birth Rates Suppressing Housing Demand?
BY BRAD BECKETT ON JUNE 13, 2019
The NAHB’s Eye on Housing is reporting that with declining birthrates, there will be lower demand for rental housing two decades from now when those born in recent years will be entering the rental market. Citing data from the Center for Disease Control and Prevention, they say the effects will spread to the single-family market in the following years and will persist for many years to come.
“The effects of declining birth rates on housing demand are not limited to the distant future. As fewer and fewer females get married and have children before they turn 35, the socio-demographic incentives to start their own household are weakening. This, in turn, suppresses housing demand for both for-sale and for-rent single-family housing, the preferred choices of families with children under 18 years.”
Click here to read the full report at the NAHB’s Eye on Housing.
Yardi: Rents Up Slightly in May
BY BRAD BECKETT ON JUNE 12, 2019
According to the latest Yardi Matrix, U.S. multifamily rents rose slightly in May, coming in at $1,442 with year-over-year growth dropping slightly to 2.5%. Yardi says that Q1 has shown decent performance but is far short of the levels of recent years.
“…2019 is shaping up to be weaker than the last few, much more robust, years. Year-over-year rent growth has dropped 80 basis points over two months and 110 basis points over three months.”
Federal Court Rules Against EPA on "Waters of the United States" Rule Challenge
BY BRAD BECKETT ON JUNE 12, 2019
Late last month, a federal court in Texas issued a strongly worded ruling stating that the Environmental Protection Agency broke the law in issuing the landmark regulation governing waterways promulgated by the Obama Administration. According to the Washington Examiner, the court said that the EPA did not allow for appropriate notice for public comment on changes it made to the final regulations and ordered the EPA to open a new public comment period on reports and analyses used in developing the final 2015 regulation. Meanwhile, the Trump Administration has been attempting to repeal them.
“The Waters of the U.S. rule, sometimes referred to by critics as the “puddle rule,” extended EPA’s Clean Water Act authority to include drainage ditches and watering holes by broadening the definition of a “waterway.” States, ranchers, farmers, and other interests have opposed the rule in courts for nearly four years. They argue the EPA overreached in its federal authority to enforce the Clean Water Act.”
Click here to read the full article at the Washington Examiner.
Salary Needed to Buy a Home in the Largest US Metros
BY BRAD BECKETT ON JUNE 11, 2019
Is it cheaper to rent or buy? That’s an ongoing question that really varies by location. However, a recent report from howmuch.net took a look a look data from several sources to determine the annual salary it takes to buy a home (including principal, interest, property tax, homeowner’s insurance and a 20% down payment) in the nation’s 50 largest metros.
“In general, metro areas in the Midwest and the South require lower salaries than metro areas on the West Coast and the East Coast. The most expensive metros are located in California, especially near Silicon Valley…”
Frannie & Freddie Backing More Mortgages of Those Deeply in Debt
BY BRAD BECKETT ON JUNE 11, 2019
A recent article by the Wall Street Journal (reposted on Realtor.com) says that Fannie & Freddie are increasingly backing loans to borrowers who have heavy debt loads, bringing up concerns about mortgage risk as to policy makers debate ways to make changes to the system. According to the WSJ, nearly 30% of loans packaged into bonds last year by Fannie Mae and Freddie Mac were from home buyers whose total debt payments amounted to more than 43% of their income.
“The backing of these loans opens up a debate about the government’s role in the housing market. Some say cheap, federally backed financing has made credit available for millions of borrowers who otherwise might not have had a shot at homeownership. Others say that more-indebted borrowers are riskier, and that their purchases may be accentuating a rise in home prices that in many areas has outstripped median incomes.“
WSJ.com
Click here to read the full story on Realtor.com.
Click here to read the full story at the Wall Street Journal.
Florida City Forecloses on Retiree for not Mowing Lawn
BY BRAD BECKETT ON JUNE 10, 2019
If you own rentals you may have received at some point a ticket from your city about high weeds or grass. More often than not, the tenant that was supposed to mow the lawn failed to do so, but since you’re the property owner you get the ticket. That being said, Realtor.com is reporting that a Florida retiree has racked up nearly $30k in fines for not keeping his home’s lawn under 10 inches. The fines, going back to 2007, have also been compounded by a $500/day penalty! He was classified as a repeat offender (and wasn’t given any time to correct the offense by mowing his grass) and now the city has begun foreclosure proceedings on his home, which by the way is worth about $142,800.
“A $30,000 fine and the loss of your home is not proportional to the offense of having tall grass,” says Ficken’s attorney, Ari Bargil. His nonprofit law firm, the Institute for Justice, agreed to take on the case at no cost to Ficken.
Flood Insurance Program Extended Through September
BY BRAD BECKETT ON JUNE 13, 2019
The National Flood Insurance Program (NFIP) recently received another “kick-down-the-road,” so to speak, as part of the $19 billion disaster relief bill that was passed by Congress and signed by the President the first week of June. The measure, tacked into the disaster relief bill, extended the National Flood Insurance Program until the end of September, 2019.
Flipping Rates Reaches Nine-Year High in Q1
BY BRAD BECKETT ON JUNE 10, 2019
In their latest U.S. Home Flipping Report, ATTOM Data is reporting that 49,059 homes were flipped in the first quarter of 2019 representing 7.2% of all home sales – which is the highest home flipping rate since Q1 of 2010. Homes during Q1 2019 sold at an average gross profit of $60k, which translates into an average 38.7% return on investment compared to the original acquisition price. Flipped homes took an average of 180 days to complete in Q1.
“…While the home flipping rate is increasing, gross profits and ROI are starting to weaken and the number of investors that are flipping is down 11 percent from last year. Therefore, if investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.” Said Todd Teta, chief product officer at ATTOM Data Solutions.
Less than Half of Buyers Said Tax Reform Affected Their Home Search
BY BRAD BECKETT ON JUNE 6, 2019
A recent survey by Redfin revealed that less than half of home buyers said 2017’s Tax Reform affected their home searches. The survey was conducted in March of over 2k U.S. residents who planned to buy or sell a primary residence in the next year.
“Last year more homebuyers were worried that tax reform would hurt their homebuying budgets, but it turns out tax reform wasn’t all bad or all good for homebuyers,” said Redfin chief economist Daryl Fairweather. “Some homebuyers, especially in low-tax states, are now paying less in taxes overall, which has left them with more cash for a more expensive home. For others, not being able to deduct as much of their property taxes or mortgage interest from their taxable income was the other shoe that needed to drop to make them pick up and move to a more affordable area.
