National Homeownership Month kicks off this month, and President Donald Trump is pledging to strengthen the middle class by reducing rules and regulations and cutting taxes that he believes will help them become homeowners.
Read about NAR's take on this: Impact of Tax Reform Options on Owner-Occupied Housing
This year’s theme for National Homeownership Month is “Find Your Place in a New Era of Homeownership.”
"For generations of Americans, owning a home has been an essential element in achieving the American dream," Trump wrote in a proclamation. "Homeownership is often the foundation of security and prosperity for families and communities and an enduring symbol of American freedom. These policies will unshackle our economy and create and sustain high-paying jobs so that more Americans have the resources and freedom they deserve to fulfill their American dream.”
Trump acknowledged many of the roadblocks young families and minorities are facing in saving up for a down payment and their struggle to access to credit. HUD Secretary Ben Carson at a recent forum on U.S. homeownership also addressed the challenges millennials are facing when trying to attain homeownership.
"We recognize the abiding value of owning a home, and rededicate ourselves toward ensuring that every hardworking and creditworthy American enjoys a fair chance at becoming a homeowner," Carson said in a statement.
The nation’s homeownership rate fell to 63.6 percent in the first quarter of 2017, down from 69.1 percent at the market’s peak in 2005, according to U.S. Census data.
Some housing experts are skeptical that Trump’s policies will lead to more Americans being able to purchase homes. For example, Ken Johnson, a real estate economist at Florida Atlantic University in Boca Raton, Fla., pointed to Trump’s proposal to double the standard deduction that taxpayers can use to lower the tax burden. He believes this could diminish the value of the mortgage interest deduction that homeowners use to lower their costs.
“The larger standard deduction should noticeably minimize the demand for homeownership,” Johnson says.
Source: “President Trump to Americans: Happy National Homeownership Month,” realtor.com® (June 1, 2017)
The Federal Reserve says that an increase in interest rates is coming soon, and quarterly hikes are likely in the future—a fundamental shift of its policy over the last few years, The New York Times reports. While the Fed has been very cautious regarding signs of economic weakness, the bank is “now willing to shrug off at least a little bad data,” according to the article.
Federal Reserve board member Lael Brainard, who advocates caution when it comes to increasing rates, according to the Times, told an economic group on Tuesday that its benchmark interest rate is likely to increase soon. It’s a sign that there is little opposition on the Fed’s board to the increase. The Fed raised rates in December and March.
While the June increase seems likely, John Williams, president of the Federal Reserve Bank of San Francisco, said this week that he considers three rate hikes this year a sensible plan, suggesting the Federal Reserve will continue to consider each increase on its own merits rather than automatically increasing the rate every quarter.
Source: "Despite Weak Inflation, Fed Is Likely to Raise Interest Rates in June," The New York Times
The U.S. boasts 95,471 miles of shoreline, and owning a small portion of that doesn’t have to necessarily set you back millions to own. Home buyers can still fetch bargains in plenty of U.S. beach towns, snagging a home for $250,000 or less.
Realtor.com®’s research team analyzed the median home prices in beach towns with populations of from 1,000 to 100,000. Towns must have had at least 30 properties on the market to be considered in the rankings. Researchers also limited ranking to only two towns per state in order to provide geographic diversity.
The following are most affordable beach towns for 2017, according to realtor.com® (listed along with the median home price):
Source: “America’s Most – and Least – Affordable Beach Towns, 2017 Edition,” realtor.com® (May 31, 2017)
Mortgage rates dipped to their lowest averages of the year this week, Freddie Mac repots. “As we predicted, the 30-year mortgage rate fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields,” says Sean Becketti, Freddie Mac’s chief economist. “The survey rate stands at 3.95 percent today, a new low for the year.”
Freddie Mac reported the following national averages with mortgage rates for the week ending May 25:
Source: Freddie Mac
Some sellers have a house full of belongings that they need to dispose of before putting their home on the market. In these cases, an estate sale may be necessary to get rid of the items quickly while also putting some extra cash in your client’s pocket.
Read more: How to Hold a Successful Garage Sale
Here are a few tips you can pass along to sellers to make their experience working with an estate sale company smooth and profitable.
—By Gail Williamson, owner of LoveVintageStuff Estate Sale Services
Several states are offering homeownership assistance programs to recent college grads that may help them receive thousands of dollars toward the purchase of a home. In New York, Gov. Andrew Cuomo recently announced the "Graduate to Homeownership" program, which provides assistance to first-time buyers who have graduated in the past two years from an accredited college or university with an associate's, bachelor's, master's, or doctorate degree. Program participants may be eligible for up to $15,000 in down-payment assistance or a reduced-rate mortgage—but they have to agree to live in one of eight upstate New York communities in order to be eligible.
"Upstate colleges and universities have world-class programs that produce highly skilled graduates, who then leave for opportunities elsewhere," Cuomo said in a statement. "This program will incentivize recent graduates to put down roots."
Nearly half of states offer some form of housing assistance to student-loan borrowers, according to an analysis by Credible.com. Ohio offers Grants for Grads, which, like the New York program, offers down-payment assistance or lower-rate mortgages to people who have graduated from college in the past four years. Rhode Island's Ocean State Grad Grant program offers up to $7,000 in down-payment assistance to college graduates who earned a degree in the past three years.
Many of these state programs, however, require college grads to live in certain cities within the state, similar to New York's program. "It can certainly help people who are dealing with high student debt burdens," says David Reiss, research director for the Center for Urban Business Entrepreneurship at Brooklyn Law School. "But programs like this have to deal with a fundamental issue: Do these communities have enough jobs for recent college graduates? Time will tell."
Source: “College Grads Can Get Home Grants – But There’s a Catch,” realtor.com® (May 5, 2017)
The Federal Reserve voted Wednesday to leave its benchmark interest rate alone, citing signs of a slowing economy between the January-to-March quarter. The benchmark rate will stay low, near 1 percent. However, the Fed cautions that it expects that a strengthening economy and job market in the coming months will justify a higher rate later this year.
Read more: Rising Rates, Rising Sales
Mortgage rates aren’t directly tied to the Fed’s benchmark rate but are often influenced by them.
The Fed’s pause to raising rates at Wednesday’s meeting comes after it increased its benchmark short-term rate in December and March. Many economists predict that the Fed will raise rates at its next meeting in mid-June.
“Today’s FOMC decision is only a short-term, temporary pause,” says Lawrence Yun, the chief economist for the National Association of REALTORS®. “With no change in monetary policy, mortgage rates look to remain within the narrow band of 4 percent to 4.5 percent for the foreseeable future. However, the future path of rate hikes and changes in bond purchase levels will depend upon inflationary pressures. Without adequate increases in new housing production, both rents and home prices will accelerate, and therefore complicate the Fed’s desire for full employment and price stability.”
Source: “Fed Leaves Rates Unchanged But Signals Further Hikes Ahead,” ABC News (May 3, 2017)
Total mortgage activity—which includes applications for refinancings and home purchases—rose 2.7 percent on a seasonally adjusted basis as homeowners rushed to take advantage of lower mortgage rates.
The refinance market was what drove last week’s increase, rising 7 percent week over week as mortgage rates dropped to the lowest level since November 2016. Still, refinance activity remains about 34 percent below where it was a year ago, the Mortgage Bankers Association reported Wednesday.
Also in today's news: Learn how buyer urgency is expected to ramp up this year.
The average 30-year fixed-rate mortgage was at 4.2 percent last week, decreasing from 4.22 percent the week prior, the MBA reports. Applications for home purchases dropped 1 percent for the week and are now just 0.4 percent higher than the same week a year ago. A shortage of homes for sale, amid strong buyer demand, continues to hamper sales.
Source: “Lowest Mortgage Rates Since Election Push Refinances Up 7%,” CNBC (April 26, 2017)
More buyers moved to lock in rates last week, as mortgage costs dipped to their lowest average of the year. Total mortgage application activity—which includes loans for home buying and refinancing—increased 1.5 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. Purchase applications made up most of that increase, rising 5 percent week-over-week and now sitting 3 percent higher than the same week a year ago.
Read NAR Chief Economist Lawrence Yun's latest column.
"The spring housing market is off to a solid start," says Michael Fratantoni, MBA's chief economist. "Despite the relatively weak job report for March, job growth is averaging almost 180,000 [a month] so far this year, providing a strong support for the home purchase market."
Lower mortgage rates were also an incentive last week for buyers to lock in rates. Interest rates dropped for the third consecutive week, with the 30-year fixed-rate mortgage averaging 4.28 percent, a new low for 2017, MBA reports.
Still, mortgage rates are higher than they were in the fall, which has left fewer borrowers with reason to refinance. Therefore, applications for refinancings last week were 40 percent lower than the same week a year ago.
Source: “Mortgage Applications Rise 1.5 Percent as Interest Rates Fall to 2017 Low,” CNBC (April 12, 2017)
If your sellers need to repaint before putting their home on the market but don't want to pay for professionals to come in and do the work, they can always do it themselves. But to avoid crooked lines and speckled floors and ceramics, HouseLogic has some tips you can share with clients for making a DIY paint job look more professional.
Read more: How Paint Primer Can Preserve the Color You Want
Source: "7 Painting Hacks to Get the Look of a Pro—Without the Pro Price," HouseLogic