Discussing the latest FHFA House Price Index, how many homes have positive equity now and what that means, property tax revenues increase, the desire for affordable housing and much more…
U.S. house prices rose in April, up 0.7% from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). From April 2016 to April 2017, house prices were up 6.8%.
While a little dated, the FHFA House Price Index is a good way to keep track of US home prices. For those that rode the storm out when the housing market crashed, they have probably regained any lost value. Look at the compound growth rate since 2000…
Home prices went down when the housing market crashed but have recovered nicely in many areas. This means that home owners now have positive equity!
Positive equity is when the home is worth more than is owed on the mortgage.
The most recent CoreLogic Equity Report said that 91,000 properties had recovered their equity in the first quarter of 2017. This is fantastic news because now 48.2 million of all mortgaged properties have positive equity.
Frank Nothaft, Chief Economist at CoreLogic, said:
One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.
Frank Martell, CoreLogic President and CEO, said:
Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.
This really is excellent news for home owners! However, do they really understand that home prices have improved this much?
An increasing number of homeowners are starting to understand that they might have more equity compared to what they initially believed. According to the latest Fannie Mae Home Purchase Sentiment Index:
This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.
Almost 80% of homeowners have significant equity in their homes today! Consequently quite a few home owners could reap the benefits of today’s seller’s market. Lots of home owners could easily sell their current home and buy a larger home or downsize.
Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist, said:
High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market…
It is sad that some may be missing out on this great opportunity to sell! If you are wondering if you could benefit from the seller’s market in the Anderson area, contact us!
NAHB analysis of the Census Bureau’s quarterly tax data shows that $541 billion in taxes were paid by property owners over the four quarters ending in Q4 2016. This represents a $23 billion—or 4.5%—increase over the previous trailing four quarters. Although this growth rate declined for the first time in a year and a half, it remains robust relative to other sources of state and local government revenue.
Property taxes accounted for 40.0% of state and local tax receipts, the largest share among major sources over the past four quarters, followed by individual income taxes (28.4%), sales taxes (27.7%), and corporate taxes (3.9%).
Sometime people think the tax value or market value on their property taxes are close to the actual market value. Sometimes it is high and sometimes it is.
Because property taxes make up such a big chunk of the local government’s revenue, they really want to get all that they can sometimes.
A majority of Americans and Canadians have made it clear: we are not paying enough attention to affordable housing needs and solutions, according to Habitat for Humanity’s Affordable Housing Survey.
I wonder if any of our elected officials feel the same? Or do they care that the majority feels this way? Have you heard of any big pushes to do something about affordable housing coming out of Washington?
No because sadly, the lack of affordable housing isn’t affecting the rich. Yet…
The Conference Board Leading Economic Index for the U.S. increased 0.3 percent in May, following a 0.2 percent increase in April, and a 0.4 percent increase in March.
Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board said:
The U.S. LEI continued on its upward trend in May, suggesting the economy is likely to remain on, or perhaps even moderately above, its long-term trend of about 2 percent growth for the remainder of the year. The improvement was widespread among the majority of the leading indicators except for housing permits, which declined again. And, the average workweek in manufacturing has recently shown no sign of improvement.
Nice other than the weak stuff that Ozyildirim mentioned. Maybe the strong section of the economy will help to pull the weak portions up?
I sure hope so!
One reason home prices continue to soar is the scarce inventory of homes for sale – and that situation is only getting worse. In May, the number of homes hitting the market dropped at its fastest pace in almost four years. Homes stayed on the market for just 77 days in April, the most recent count available – and the fewest days Zillow has ever reported.
Home shoppers nationally had 9.4 percent fewer homes to choose from in May, compared to the same month a year ago. Declining inventory isn’t a new story. It’s fallen year-over-year in each of the past 28 months. What’s noteworthy is that inventory – already very low — could still fall at such a precipitous rate. The last time the market saw an annual drop like that was in August 2013, when inventory fell 10.2 percent.
First, this report is coming from Zillow so we have to take it with a grain of salt. But that being said, if you are thinking this means you shouldn’t even attempt to buy a home, I say think again.
You just need to be properly prepared by having a Pre-Approval Letter and working with a Buyers Agent. Being prepared is almost like an unfair advantage against other buyers that are not as well informed/educated.
The nation’s top consumer regulatory agency is seeking to hold a South Carolina housing finance company in contempt for moving too slowly to respond to a judge’s order that it turn over documents and audio recordings.
A federal judge on Tuesday referred the matter to a United States magistrate judge for a hearing.
The unusual legal maneuver by the agency, the Consumer Financial Protection Bureau, to hold National Asset Advisors and a related company in contempt shows that the agency is proceeding with an investigation into businesses associated with the sale of homes to lower-income borrowers with seller financing.
If you are not ready to buy a home by getting a mortgage from a bank, these “creative” companies are always ready to screw you over…
If you are a bad swimmer, you shouldn’t attempt to swim across Hartwell Lake right away. You need to improve your swimming skills first. Your ego could cause you to drown…
It’s the same with buying a home. If your credit is bad, work on improving your credit. Read all you can about the home buying process. Be an informed consumer not a victim!
The U.S. economy will continue to expand through next year with support from fiscal stimulus, according to the Economic Advisory Committee of the American Bankers Association.
Consumer spending has supported a prolonged expansion that is expected to continue, according to the consensus view of 15 chief economists from among the largest North American banks. The group’s base forecast for continued growth is also driven by a pickup in business capital spending. The bank economists see inflation-adjusted GDP growth at a little over 2 percent this year. The outlook for 2018 is for a slight acceleration, reflecting some fiscal stimulus that will add around 0.3 percentage point to GDP growth.
According to the group’s economic forecast, the eight-year span of economic growth will stretch to a tenth year, tying the longest expansion on record. The group generally sees the risks to the forecast as balanced.
Pretty optimistic and I hope they are correct. They do talk about the Fed raising rates but they think it can be dome without hurting the economy.
Separate studies issued this week share the same conclusion that demand for rental apartments and other housing options will stay at elevated levels largely due to continued robust household formation and limited affordable housing options, especially for detached single-family houses.
Excellent opportunities are out there for those looking to buy rentals. But you have to buy the right property at the right price in the right location.
That is all I had time for today but check back tomorrow as I will be writing about the new home sales report!