Weekly Mortgage and Real Estate Report – Week of November 19, 2017

Long Road to Travel 

The tax reform proposal is now in print. For a year we have been hearing about the concept of tax reform. But now that there is ink on paper — Can we still use that expression today? — the stark reality has hit. When talking about changing the tax system, it is not a zero-sum game. There will be winners and losers in the end. And if you look at the reaction of industry groups such as the National Associations of Realtors® and Home Builders, as well as the Mortgage Bankers Association, they certainly feel that the initial proposals will make real estate less attractive.

Certainly, further limiting the mortgage interest and state/local tax deductions, as well as increasing the standard deduction, are proposals in the package which have these industry associations concerned. And as always, we are not here to predict the future with regard to what final impact these proposals would have upon homeownership in the United States. Our purpose today is to say that the process still has a long distance to travel still.  Adding the Senate alternatives to the mix is just one extra step.

Right now, these associations and thousands of additional lobbyists have descended upon Washington, and they will represent their special interests. The proposal is likely to undergo several reiterations before it is finished. The finished product may or may not resemble what is being proposed initially. And even after these changes are made, the final proposal may or may not pass. Thus, while we don’t like trying to predict the future, we are certain about one result — the lobbyists in Washington will be making a lot of money this holiday season.

 More Americans are actively seeking to improve their credit scores to help achieve their financial goals including home ownership. Chase Slate’s 2017 Credit Outlook reveals that 72% of survey respondents have taken steps to improve their score in the last year with 88% having checked their score, including 52% doing so in the last 6 months. “Americans are more ambitious and action-oriented toward their credit health,” said Mical Jeanlys, General Manager of the Chase Slate card. “They are not only expressing a desire to improve their scores, but also are creating and carrying out specific strategies to achieve their goals.” A third of consumers say they check their credit score every month. More than half of respondents said they want to improve their credit score and 45% say they have a plan to do so. Data from FICO shows that the average US consumer has a credit score of 700, 14 points above the level at the end of the financial crisis in 2009. Meanwhile the share of those with scores below 600 has fallen to 20% of the population, down from 25% in 2009. “Credit plays a critical role in nearly all facets of one’s finances, but strong credit health isn’t achieved overnight,” says Farnoosh Torabi, a personal finance expert and Chase Slate Financial Education Ambassador. Source: Mortgage Professional America — Want help in determining what you can do in order increase your score? Contact usThere’s a growing quest among homebuyers to live in sustainable, greener homes according to data from the National Association of Realtors®. More than half of its members say that consumers are interested in sustainable real estate issues and practices. As a result of demand, more MLS listings are including data on features such as renewable energy. Efficient use of lighting, smart/connected homes and bike lines and green spaces in neighborhoods were the top 3 green features that Realtors® say clients consider most important. “As consumers’ interest in sustainability grows, Realtors® understand the necessity of promoting sustainability in their real estate practice, such as marketing energy efficiency in property listings to homebuyers,” said NAR President William E. Brown. “The goal of the NAR Sustainability Program is to provide leadership and strategies on topics of sustainability to benefit members, consumers and communities.” 80 per cent of Realtors® say that solar panels are available in their market and 42 per cent say that solar panels increase the perceived value of a home. However, the market for green properties is at a relatively early stage with 70 per cent of Realtors® reporting that they had not worked with any properties with green features. Source: NAR

A cul-de-sac offers plenty of appeal to buyers: It may be quieter and safer for kids to play because of less traffic. Some home buyers are willing to pay more for a house on a cul-de-sac—but is it really the best option for your buyer? Because cul-de-sacs are attractive areas for children to play, says Fiona Tustian, GRI, a sales associate with Roy Wheeler Realty Company in Ruckersville, Va., the frenzy of activity has made some buyers regret their purchase. “My clients were seniors looking for peace and quiet,” she says. Parking in a cul-de-sac can also be an issue if the neighbors are hosting an event that attracts a large crowd. However, neighborhoods tend to be tightly knit, says Meg Colford, who lives in a cul-de-sac on Long Island, N.Y. “Our neighbors are really close. Everyone is friendly, but you definitely have to plan on seeing someone at least every day. … So, if you’re not into helping your neighbors do things like snow-blow or shovel the driveway, a cul-de-sac probably isn’t a great choice.” Buyers also may want to watch for any potential insurance issues. Since there’s only one way in and out of a cul-de-sac, large vehicles such as a fire truck can get jammed up. That can make it more difficult to get insurance, insurance broker Diane Beatty told MarketWatch. Source: MarketWatch


Weekly Mortgage and Real Estate Report – Week of November 6, 2017

Weathering the Storms 

The storms are over. The regions hit by the storms are recovering to various degrees. We all thought that the third quarter would see a pause because of the storms’ devastation. However, with a preliminary reading of 3.0% economic growth, a lot of forecasters were surprised. What this number tells us is one of two things. First, the national economy could be a lot stronger than we were thinking and should sprint in the fourth quarter. Or, since the hurricanes hit during the second half of the quarter, we may see a downward revision of this preliminary number.

We do know that the storms negatively affected the jobs numbers for September. We felt that October’s numbers would give us a better reading of the storms’ damage — with the revision of September’s numbers just as telling as the October results. It is hard to accomplish accurate surveys when people are in shelters and the power is out. So, how did the report come out? Indeed, the numbers for October were as expected, with an upward revision to September’s dismal numbers and a bounce back for October.

Looking at the two months together, we had approximately 140,000 jobs added each month, which is about 50,000 less than the previous year’s average. Wage growth for the month was dismal but the unemployment rate dropped one more time. Again, we expect additional recovery as the year ends, which is important because the latest meeting of the Federal Reserve indicated that they are still on track to raise rates one more time this year, and that means December, which is the only remaining meeting date. Add that to a new Fed Chairman nomination and haggling over the tax plan — especially the mortgage interest deduction — and it should be a very, very busy end of the year.

  In its most recent study, Zillow Group examined the newest generation to enter the housing market – Generation Z. Wait, what? Already? Are they even old enough to enter the housing market? As it turns out, yes, they are. Generation Z is considered to be those born from 1995 to 2010, meaning the oldest in the generation are now 22 years old. The Zillow Group Report on Consumer and Housing Trends 2017 shows this new generation now makes up more than 21% of the U.S. population, and is the most ethnically and racially diverse generation in our history. And they are beginning to enter the housing market as renters. However, this generation is just as likely as older generations to say owning a home is a key component of the American Dream. In fact, 57% responded that they already considered buying a home while looking for their last rental. “It’s encouraging to see that Generation Z is inheriting the same notion of what home means as their parents and Millennial siblings,” Zillow Chief Marketing Officer Jeremy Wacksman said. The 2017 Zillow Group Report is the second annual survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them and what frustrations and aspirations color their decisions. Source: HousingWireFinding and evaluating a home improvement contractor is a difficult process. Do it right, and you will be happy with the work. But do it wrong, and your project could be a nightmare. Unfortunately, most people don’t have a clue how to go about it. According to a survey of its members by the National Association of the Remodeling Industry, customers are asking the wrong questions. The most common ones: When can you start? When will you finish? What time will you start each morning? What time will you stop working for the day? Are you going to work every day? Can you finish by a certain date? How much will it cost per square foot? In other words, “How fast and how much?” Certainly, these are important questions, to which you will want answers. But there are far more important things you need to know. After all, you are not only going to be inviting a stranger into your home, you are asking the contractor to rip up your house and interrupt your life, perhaps for a long period of time. Here’s what you really need to ask. Ask for the contractor’s license number and confirm it is valid and current. Verify the experience of the contractor and how long they have been in business. Also confirm their insurance is up-to-date and obtain referrals. Source: Lew Sichelman, UExpress

A new study by Redfin has concluded it is more cost-effective for students at some public colleges to buy their own condo rather than rent an on-campus dorm room. According to Redfin, dorm rents range from $232 to $1,817 per month, with a median monthly rate of $705. Redfin compared the monthly dorm rate at 195 public colleges with the median monthly payment on a condo in each of those cities and found 47 locations where owning was a better financial option than renting. Redfin real estate broker Misty Hurley noted that this solution could ultimately benefit students in their post-college lives. “Homeownership can be a great way to build wealth,” said Hurley. “Students will build equity that they can one day use as a down payment on a move-up home or to pay off student loans. If they choose not to sell right away, they’ll have a piece of property that’s ripe for renting, as there are always new college students looking for rentals.” Source: National Mortgage Professional