November 22, 2016
- According to Realtor.com, New York City is one of the least affordable cities in the U.S. Due to the vast affordable housing shortage, the city will receive 300 million to aid in its efforts to make the city more affordable.
- Trump’s win as the next president of the United States is quickly affecting the real estate market. One day after the election, the interest rate for mortgages increased from 3.38% to 3.8%.
November 21, 2016
The Christian Science Monitor quoted me in What Does President Trump Really Mean for Mortgage Rates? It opens,
In the week following the election, mortgage rates soared nearly half a percentage point. Average weekly 30-year fixed home loan rates are back above 4% for the first time since July 2015.
Here’s a three-minute read on the Trump Effect — past, present and future — on mortgage rates.
What happened to mortgage rates right after the election
Investors sold bonds on President-elect Donald Trump’s stated goals to lower taxes, boost deregulation and make massive infrastructure investments. A growing economy fueled by government spending could trigger higher inflation, which is a concern for the bond market.
As bond prices fell from the sell-off, yields rose. Higher bond yields equal higher mortgage rates. is happening with mortgage rates now
What is happening with mortgage rates now
Rates are already taking a breath. After a quick run-up following the election, 30-year mortgage rates are generally holding steady, near 4%.
What will happen to mortgage rates in 2017
The Federal Reserve this week reaffirmed its intention to begin raising short-term interest rates, most likely beginning in December. Following that hike, if it happens, the U.S. central bank’s policy-setting Federal Open Market Committee is looking to manage a slow climb in rates.
“The FOMC continues to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability,” Fed Chair Janet Yellen told Congress on Nov. 17. Those moves will influence longer-term rates such as on mortgages to rise as well.
And there’s another potential trigger for mortgage rates to move higher.
While Trump hasn’t taken a stance yet, Republican party leaders have been vocal about getting the government out of the mortgage business. That could mean redefining the role of the Federal Housing Administration and moving Fannie Mae and Freddie Mac to the private sector.
David Reiss, a professor at Brooklyn Law School, concentrates on real estate finance and community development. He sees the Republican agenda to “reduce the government’s footprint in the mortgage market” as a possible catalyst to higher mortgage rates in the future.
“You put the government’s stamp of approval on companies like Fannie and Freddie, and it lowers interest rates because they can borrow at a lower rate — but then the taxpayers are on the hook if things go south, and that was the case in 2008,” Reiss tells NerdWallet. “If you reduce the federal government’s role in the housing markets, you’re going to reduce the likelihood of future bailouts by taxpayers. That’s the trade-off.”
- Passaic, New Jersey developers are ensuring justice happens with a past mayor. Developers paid the past mayor “mandatory” funds in order to secure the progression of their project within the city.
- Residents of Southern Illinois surpassed yet another attempt to dismiss their case against the city’s treasurer and his practices during auctions regarding property taxes.
- Wells Fargo agreed to settle a California class action suit for a total of $880,000. The plaintiffs in this case argue that the banking giant did not disclose insurance proceeds that could have aided homeowners in paying off their mortgage.
November 18, 2016
TheStreet.com quoted me in Home Loan Down Payments Are in Decline: Will Uncle Sam Ride to the Rescue? It opens,
President-elect Donald Trump has enough problems on his hands as his administration takes shape, with the economy, health care, geopolitical strife and a divided country all on his plate.
“U.S. homebuyers are putting less down to purchase homes due to the wide availability of low- and no-down payment loans such as FHA loans, Fannie Mae’s HomeReady program, a resurgence of ‘piggy-back mortgages’ and other programs,” says Erin Sheckler, president of NexTitle, a full-service title and escrow company located in Belleview, Wash. “Meanwhile, USDA and VA loans also do not require any down payment whatsoever.”
Sheckler also notes that lending requirements have begun to ease nationwide, thus giving homebuyers more wiggle room with home down payments. “According to Ellie Mae’s Origination Insight Report, in August, home buyer down payments varied by loan program but, in nearly all cases, down-payments were near minimums,” says Sheckler.
Sheckler also doesn’t expect the low down payment trend to end anytime soon.
“How much money a person decides to put down on the purchase of a new home is a combination of risk and personal tolerance as well as the loan programs available to them,” she says. “As long as mortgage guidelines remain relaxed and with first-time homebuyers being an increasing segment of the market, we will likely see down-payments hover around the minimums into the near-term future.”
The risk with lower home down payments is real, however. “No one wants to find themselves house-poor,” Sheckler adds. “Being house-poor means that the majority of your wealth and monthly income is tied up in your residence. This can be a catastrophic situation if you find yourself suddenly faced with a loss of income or unexpected expenses.”
Homebuyers looking for more help from Uncle Sam, though, may come away disappointed in the next four years. “While Trump has been pretty silent on the housing market, (vice president-elect Mike) Pence and the Republican party platform have made it clear that they want to reduce the federal government’s footprint in the housing market,” says David Reiss, professor of law at Brooklyn Law School. “This is likely to mean fewer low down payment loan options being offered by Fannie Mae, Freddie Mac and the FHA.”
- Rates for home loans rose for a second straight week just before the end of the presidential election, mortgage provider Freddie Mac said Thursday. The 30-year fixed-rate mortgage averaged 3.57%, up three basis points during the week. The 15-year fixed-rate mortgage averaged 2.88%, up from 2.84% the prior week.
- Prospective homebuyers faced a challenging housing market during the third quarter, mostly due to ongoing inventory shortages that are resulting in a faster rate of home price appreciation, according to a quarterly report from the National Association of Realtors (NAR) covering the third quarter.
- More renters claim they are concerned about high utility costs than about rising rent prices, according to a new survey from Freddie Mac. The only thing rising faster than home prices may just be rent prices. Home prices are rising across the nation to levels not seen since before the housing crisis and yet, it’s still cheaper to buy than rent, according to a study by online real estate listing service Trulia.
November 17, 2016
Trulia quoted me in 6 Things Home Sellers Are Legally Required To Disclose. It opens,
When it comes to selling your home, heed your mother’s advice: Honesty is always the best policy.
Denise Supplee and her husband, Jerry, had been in their new home in Horsham, PA, for just three months when they started to notice something strange in their bathroom. “You could see mold starting to seep through the paint,” says Denise, a co-founder and director of operations of SparkRental.com. “We had a contractor come in and he told us we were lucky,” she says. “It seemed to be an issue kept to the bathroom and occurred most likely because there was no exhaust fan.” The problem: The seller had blatantly painted over existing mold without ever disclosing it to the Supplees. Although the seller made good and paid for the mold removal — a $1,500 cost — the Supplees could have taken them to court for not disclosing the problem before the sale.
It’s a question that plagues many residential sales: As a seller, what do you — and don’t you — need to tell the buyer about your home? “My rule of thumb is this: If you’re not sure if you should disclose something, you probably should,” says Sam Pawlitzki, a real estate agent with Beach Cities Real Estate in Los Angeles, CA. “Think of seller disclosures like a Carfax report.” Plus, the harm in not disclosing something can result in some serious legal and financial woes. Here’s a list of what you legally need to include in your sellers’ disclosure to keep yourself out of hot water.
1. Lead paint
One item is a must when it comes to being upfront with potential buyers: the use of lead-based paint in your home. “If the home was built before 1978, each party in a transaction needs to sign a lead paint disclosure,” says Pawlitzki. “This is a federal law and applies to every state. No matter if you think the lead paint has been removed or not, it still needs to be disclosed.” However, David Reiss, a professor at Brooklyn Law School in Brooklyn, NY, explains, “If you are not aware of a lead-based paint issue in the house, you are not required by the act to investigate whether there is any.”
- A blog post in the City Observatory examines neighborhood change and shifting community demographics as they relate to economic and racial integration.
- What a Trump administration means for real estate and other major investment sectors.
- Fifty years ago, Robert Moses, the legendary “power broker” who reshaped New York City in the mid 20th century, gave a lunchtime talk at the Joint Center for Urban Studies of MIT and Harvard. Thanks to Adam Tanaka, a 2015 Joint Center Meyer Doctoral Fellow who was doing research for his thesis on the construction of large-scale, middle-income housing in New York City, the Joint Center recently received a copy of his speech.