Construction, Premiums and Unfortunate EventsJanuary 23, 2017
This week in housing news you can use, construction booms, interest premiums stay put, and real estate agents find a home in an unfortunate series.
New home construction’s best year
Starts for US housing projects in 2016 hit their highest level since 2009. The Commerce Department reported that starts rose 11.3 percent in December to an annual rate of 1.23 million (seasonally adjusted). Single-family starts dropped 4 percent, while multifamily units went up a whopping 53.9 percent from November to December. Although permits were down .2 percent, which may see a slight slowdown in future construction, economists are optimistic that 2017 may see larger gains in new home construction.
Source: Wall Street Journal
Housing shortage highest in the West
A study by realtor.com of the 150 largest US housing markets looked at the number of homes available in each city. Half of the top 10 were West Coast markets; the remaining top offenders were mid-sized cities in the Midwest and northeast. Those most affected are first-timers and low-income buyers. “More than two-thirds of the markets are seeing less inventory now compared to a year ago,” says Jonathan Smoke, our chief economist. “Tight credit and limited new construction are clearly at play.”
Mortgage premium cuts on hold
The US Department of Housing and Urban Development (HUD) suspended a plan that would have cut the insurance premiums for some federally-backed mortgages. The last-minute controversial plan inked by the previous administration, which had come under fire as putting taxpayers at risk for another FHA bailout, was suspended only two hours after the new president’s inauguration. Although the plan could have saved some homeowners money in the short run, a HUD spokesman said the reversal was necessary for more long-term analysis and research.
Proposed tax plan could impact real estate
The Better Way tax reform plan, if passed, could impact homeowners, says Business Insider. First, the doubled standard deduction to $24,000 (married filing jointly) could have fewer people itemizing mortgage insurance, however, although a popular benefit, only 20 percent of Americans take advantage of the deduction. If the deduction were completely eliminated (unlikely says BI), there is some speculation that home prices could drop as much as 7 percent. Despite the possible loss of the deduction, Trulia’s Chief Economist Ralph McLoughlin says it’s still cheaper to buy than rent for most.
Source: Business Insider
An unfortunate fear
Netflix’ new show A Series of Unfortunate Events (based on the darkly humorous Lemony Snicket books) has an unusual “villain”: real estate agents. In episode 3, the latest guardian of the unfortunate children lives in a decrepit property hanging by a thread on a cliff. The eccentric lady (played by Alfre Woodard) has a great many irrational fears, from telephones to doorknobs. But her biggest irrational fear that keeps her from selling the wreck? Real estate agents. Perhaps it was the yellow blazers…
Don’t worry, our agents don’t work for Count Olaf!
Source: RIS Media
Redefy Real Estate is a full service brokerage for buyers and sellers. No, we don’t wear yellow jackets. Yes, we will save you thousands with flat fee listings and full service from start to finish (because paying a listing commission is really scary!).