- National Association of Realtors reports April Pending home sales, up 1.3% – the strongest in 9 years.
- A joint study by the NYU Furman Center and Capital One Renting in America’s Largest Cities: National Affordable Rental Housing Landscape reveals a trend in all 11 of the largest metro areas in the U.S., which the study focused on, of rent increases outpacing inflation, tending to not keep up with the increase in number of renters and an increase in severely rent burdened low income renters.
- Zillow’s recent research concludes that the rent affordability crisis leads to lower homeownership rates because renters cannot afford to save for a downpayment in high rent metros like Los Angeles.
Tag Archives: National Association of Realtors
Thursday’s Advocacy & Think Tank Round-Up
- City lab’s analyzes why Billionaires Don’t Pay Taxes in New York, concludes that recent housing boom has been in the “ultralux” market and that the owners pay a fraction of their share due to a tax code that shifts the burden from owners to renters and from the wealthy to the poor.
- The Center on Budget and Policy Priorities released an analysis of federal housing subsidy programs and their effectiveness
- Corelogic’s National Foreclosure Report for March 2015 finds that while delinquency rates are down to 3.9% the percentage of mortgagees struggling to make their payments is still above pre-recession levels.
- National Association of Realtors released data showing decreased homeownership rates across regional metro areas of the U.S., analysis of this data lead to the conclusion that continued decline in homeownership means the gains are going to fewer people and likely leading to worsening inequality in the U.S.
- The Roosevelt Institute’s Rewriting the Rules of the American Economy: An Agenda for Growth and Prosperity by Joseph Stieglitz, seeks to completely revamp the rules and regulations that shape our economy, corporate behavior and the financial sector – with a view toward creating shared prosperity. Proposals related to real estate finance include, providing §11 bankruptcy protection for homeowners and creating a public option for the supply of mortgages.
- The Urban Institute released Welding a Heavy Enforcement Hammer has Unintended Consequences for FHA Mortgage Market concludes that the significant, easily triggered liability of both the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act have had a chilling effect, causing some lenders to do less origination to reduce their litigation risk.
Thursday’s Advocacy & Think Tank Round-Up
- Enterprise Community Partners and the National Low Income Housing Coalition and 45 other affordable housing advocates signed a letter to the appropriations committees of the house and senate urging them to pride at least $1.2 billion for the HOME Investment Partnerships Program (HOME). a block grant that provides states and localities critical resources to help them respond to affordable housing challenges.
- A recent study by the National Association of Realtors finds that formerly distressed homeowners with restored credit are re-entering the housing market, nearly a million of these former owners have likely already purchased a home again, and an additional 1.5 million are likely to become eligible and purchase over the next five years, representing an additional source of buyer demand for the housing market.
- National Association of Realtors also released it’s March Realtor Confidence Index which finds gains in home sales and prices but noted concern over lender delays and tight inventory, especially for affordable units.
Thursday’s Advocacy & Think Tank Round-Up
- Harvard’s Joint Center for Houses Studies released its Leading Indicator of Remodeling Activity (LIRA) which predicts a deceleration in remodeling activity due to sluggish home sales, the LIRA also projects annual spending for home improvements will increase a more modest 2.9% in 2015.
- National Association of Realtors’ testimony before the United States Senate Committee on Banking, Housing and Urban Affairs, Hearing titled Regulatory Burdens to Obtaining Mortgage Credit, argues that unnecessary burdens prevent qualified buyers from obtaining mortgages in today’s market.
Thursday’s Advocacy & Think Tank Round-up
- Brookings Institution Spring 2015 Brookings Panel on Economic Activity Research Paper: Risk Management for Monetary Policy Near the Zero Lower Bound Concludes that It Is Better if Interest Rates Stay Low Rather than be Raised Too Soon.
- Center on Budget and Policy Priorities Report: Highlights How President Obama’s Budget Will Restore 67,000 Housing Vouchers lost During the 2013 Sequestration
- Federal Reserve Board’s Division of Research & Statistics and Monetary Affairs, Report: Crowding out Effects of Refinancing on New Purchase Mortgages, Concludes that High Credit Risk Borrowers Get Approved for Mortgage Loans Nire often When Interest Rates are High.
- The Federal Reserve Board’s Consumer and Community Development Research Team evaluated the success of Neighborhood Stabilization Program in, Have Distressed Neighborhoods Recovered?
- New Climate Economy Report: Provides Comprehensive Estimates of the Costs of Sprawl and Potential Benefits of Smart Growth, Describes Planning and Market Distortions that Foster Sprawl, and Smart Growth policies that can help correct these distortions.
- National Association of Realtors Letter to Senators Delany (D-MD) and Others Thanking them for Re-Introducing the Partnership to Strengthen Home Ownership Act, which would Reform the Housing Finance System
Thursday’s Advocacy & Think Tank Round-up
- ACLU: “Here We Go Again: Communities of Color, The Foreclosure Crisis, and Loan Servicing Failures”
- Federal Housing Finance Agency – HPI Calculator – projects what a given house purchased at a point in time would be worth today if it appreciated at the average appreciation rate of all homes in the area.
- Federal Reserve Bank of New York Interactive Home Price Index – Maps changes in home prices each month compared with prices one year earlier, by county, based on CoreLogic overall house price indexes.
- Joint Center for Housing Studies Harvard University: “Racialized Recovery: Post-Forclosure Pathways in Distressed Neighborhoods in Boston”
- National Association of Realtors – Realtors Confidence Index Reflects on Positive Trends in Home Sales for January
- Urban Institute’s Housing Finance Policy Brief “The U.S. Treasury’s Credit Rating Agency Exercise: First Steps Out of the Private Label Securities Desert”
Salary Needed for a House in 27 Cities
HSH.com has posted a study to answer the question — How much salary do you need to earn in order to afford the principal, interest, taxes and insurance payments on a median-priced home in your metro area? The study opens,
HSH.com took the National Association of Realtors’ fourth-quarter data for median-home prices and HSH.com’s fourth-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home — the principal, interest, taxes and insurance — in 27 metro areas.
We used standard 28 percent “front-end” debt ratios and a 20 percent down payment subtracted from the NAR’s median-home-price data to arrive at our figures. We’ve incorporated available information on property taxes and homeowner’s insurance costs to more accurately reflect the income needed in a given market. Read more about the methodology and inputs on the final slide of this slideshow.
The theme during the fourth quarter was increased affordability.
Home prices declined from the third to the fourth quarter in all of the metro areas on our list but one. But on a year-over-year basis, home prices have continued to trend upward.
“Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average,” said Lawrence Yun, NAR chief economist.
Along with affordable home prices, mortgage rates fell across the board which caused the required salaries for our metro areas to decline (again, except for one).
“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” said Yun.
On a national scale, with 20 percent down, a buyer would need to earn a salary of $48,603.82 to afford the median-priced home. However, it’s possible to buy a home with less than a 20 percent down payment. Of course, the larger loan amount when financing 90 percent of the property price, plus the need for Private Mortgage Insurance (PMI), raises the income needed considerably. In the national example above, a purchase of a median-priced home with only 10 percent down (and including the cost of PMI) increases the income needed to $56,140.44 – just over $7,500 more.
This sounds like a pretty reasonable methodology, but there are a lot of assumptions built into the ultimate conclusions. They are generally conservative assumptions — buyers will get a 30 year fixed rate mortgage instead of an ARM, buyers will have 28% debt ratios. I would have liked to see some accounting for location affordability, because transportation costs can vary quite a bit among metro areas, but you can’t have everything.
As always, I am particularly interested in NYC, the 24th most expensive of the 27 cities. NYC requires an income of $87,535.60 to buy a median home for $390,000. By way of of contrast, the cheapest metro is Pittsburgh, which requires an income of $31,716.32 to buy a median home for $135,000 and the most expensive was San Francisco, which requires an income of $142,448.33 to buy a median home for $742,900.
