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Monthly Archives: September 2021

LendingHome, Which Serves Investors, Changing to Kiavi

The newly named company says it will focus on older housing stock and use AI-powered analytics to help real estate investors make decisions.

NEW YORK – One of the nation’s largest lenders to real estate investors – LendingHome – will change its name over the coming months to Kiavi. Along with the new name, the company says it’s set to expand its lending options to real estate investors based on expected demand surges.

LendingHome’s new name of Kiavi comes from the Italian word “chiave” meaning “key” in English.

The company says it plans to expand its support of real estate investors, especially by providing greater opportunities to invest in America’s aging housing stock. More than 65% of U.S. homes are 30 years old or older. With access to more funding resources, real estate investors can renovate and deliver move-in-ready homes and help alleviate some housing shortages occurring across the country, the company says.

The company plans to use AI-powered analytics to help real estate investors make investment decisions.

“We’re proud of the work we’ve done to build a technology platform designed specifically for today’s residential real estate investor and to have assembled an industry-leading team to serve our customers,” says Michael Bourque, CEO of Kiavi. “As the company transitions to Kiavi, management’s goal is to continue expanding the tools available to investors across the real estate investment life cycle. We believe there is a tremendous opportunity to bring technology and data-driven insights to the entire process.”

In 2019, as demand for single-family homes and rentals grew, the company expanded its offerings to include rental loans to assist investors with strategies to buy, renovate and rent out move-in-ready homes. The demand for single-family rental homes has only grown since the pandemic.

Established in 2013, LendingHome says it has funded more than $7.8 billion in loans across 35,000 projects nationwide.

Source: LendingHome

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Good Listing Visuals Stand Out Amid the Mediocre Ones

The pictures and virtual tours aren’t all that great in many listings – but that’s a benefit for those agents who take extra time to make sure their listing visuals “pop.”

NEW YORK – Poor visuals undermine most real estate listings. Those visuals run the gamut from amateur photography to a lack of virtual tours and no floor plan, according to a survey by Australian real estate image enhancement company BoxBrownie.

BoxBrownie general manager Peter Schravemade says poor quality could possibly be a lack of understanding among real estate professionals about good professional photos. According to Schravemade, best practices include working with sellers to make sure the home is photography-ready. In most cases, that means cleaning up, decluttering and other measures so the property looks its best.

Agents also need to understand the photographic principles of good composition to best highlight a home’s spaces, with an emphasis on various angles of the entire room instead of individual items.

If working with professional photographers, agents should make sure they understand and, if possible, specialize in home shoots. They also should ensure the photographer properly represents the property through enhanced editing, and consider stitching photos together into a virtual walkthrough.

Digital floor plans can help potential buyers understand a property’s layout in a way that is not always available via photos or video walkthroughs. According to a National Association of Realtors®’ report, over half of buyers find floor plans informative.

“When 3D tours and high-end photography are already in place, I think buyers are expecting floor plans,” says Inman columnist Craig C. Rowe.

Source: Inman (08/02/21) Murdock, Christy

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Can Most Pre-2020 Homebuyers Cancel Their PMI Insurance?

Buyers who put less than 20% down often need private-mortgage insurance – but with a 20% year-to-year uptick in home values, many owners may be able to cancel it now.

PASADENA, Calif. – Ali Elahi, one of my firm’s clients, doubled down and won big, saving $800 in monthly mortgage payments by twice lowering his mortgage rate and shedding his mortgage insurance.

Elahi paid $375,000 for his Laguna Hills condo in 2018. As rates were dropping and his equity was increasing, he was able to knock $400 off his monthly payment by refinancing in 2019. But he didn’t have quite enough equity to eliminate the mortgage insurance.

Rinse and repeat.

In June 2021, Elahi nailed it. Armed with a $440,000 property appraisal, he eliminated the $139 monthly mortgage insurance bill. And he knocked 1.25% off his interest rate, landing at 3.125%. Another $400 of overhead disappeared.

“Exhilarating,” said Elahi. “It’s a double whammy sigh of relief.”

What exactly is private mortgage insurance (PMI) and why do some borrowers have to pay it?

PMI is required for loans sold to mortgage giants Fannie Mae and Freddie Mac that do not have at least a 20% down payment or 20% equity in the case of refinance transactions. One way or the other, you must pay for a policy that protects Fannie Mae and Freddie Mac in the event you default on your home loan.

Most borrowers pay for this in a monthly premium added to your property tax and fire insurance escrow impound account. You may also pay this as a single upfront charge. Or your mortgage lender could pay – known as lender-paid premium. All that means is its baked into the rate. Never a free lunch.

Mortgage insurance is risk-based, meaning the better your middle FICO credit score, the lower the premium you pay. For example, assuming a 10% down payment on a $400,000 mortgage and a score of 740, your monthly premium would be roughly $97. For that same loan with a score of 620 (the lowest allowable for mortgage insurance), your monthly premium would be an astronomical $407.

The Homeowners Protection Act of 1998 mandates that mortgage servicers remove PMI on the date the mortgage balance is first scheduled to reach 80% of the original value.

A good payment history and no second liens are conditions for release. Or you can shed the payment with at least two years of on-time payments and 25% equity.

In this market of scorching appreciation, you have a faster path to eliminate the mortgage insurance. Either kill two birds with one stone by knocking your rate down and eliminating your PMI, or request your mortgage servicer remove the insurance premium.

Your servicer may or may not consider your request.

If the servicer entertains removing your PMI, it will likely require you to pay about $600 for an appraisal to support your assertion of 20% or more equity. If your servicer tells you to drop dead, mention you are considering going elsewhere to refinance. Your servicer does not want to lose the income from servicing your loan.

Refinancing may be the better option since mortgage rates have declined over the last several years.

Another one of my firm’s clients got lucky, but not quite lucky enough to ditch her PMI completely.

Sarah Ochwat paid $483,500 for a Laguna Niguel condo this past January, putting just 5% down. Her place has appreciated by a whopping $56,500 in eight short months. Now she has 15% equity. While that’s not enough to eliminate her PMI, she could cut her $84 premium almost in half by refinancing. She locked in a 2.75% rate the same week Freddie Mac announced its all-time lows. Her rate is better than she can get on a no-cost refinance.

“Seems frustrating, but at the same time I feel lucky,” said Ochwat. “You can’t plan any better.”

Nationally, about $1 trillion of conventional mortgages, or more than 10% of the U.S. mortgage market, is covered by PMI, according to Mike Zimmerman, senior vice president of MGIC, one of America’s largest mortgage insurance providers. The current crop of newly originated PMI business is about 85% purchase and 15% refinance.

About 13% of California mortgages purchased by Fannie Mae and Freddie Mac from January 2020 through this past June, or more than $106 billion, had mortgage insurance, according to Inside Mortgage Finance. Meanwhile, Southern California home prices increased 26% since the start of 2018, according to Attom Data Solutions.

Borrowers with a Federal Housing Administration mortgage have the same opportunity to chuck their mortgage insurance. If you have an FHA loan, eliminate the monthly premium by refinancing into a conventional mortgage.

Copyright © 2021 Pasadena Star-News

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NAR Finds Connection Between Housing and Food Insecurity

38% of homeowner households and 66% of renter households have difficulty paying for usual household expenses, including food, according to NAR’s study. “Housing affordability and food sufficiency are inseparable to families’ balance sheets,” says NAR VP Jessica Lautz.

WASHINGTON – Households burdened by housing costs are more likely to need food assistance, according to a new analysis by the National Association of Realtors®’ (NAR) Housing Affordability and Food Sufficiency report.

From June 23 to July 5, 2021, 38% of homeowner households (23.3 million) and 66% of renter households (17.8 million) reported difficulty paying for usual household expenses, including food, rent or mortgage, auto and student loans, medical expenses and utilities. Nearly six million households received free food offered by food pantries, churches or other charitable organizations.

“Housing affordability and food sufficiency are inseparable to families’ balance sheets,” says Jessica Lautz, NAR vice president of demographics and behavioral insights. “This report shows how critical it is for NAR to continue its work to increase the access to stable and affordable housing in America.”

Of those households that spent more than 50% of their income on housing in 2019 – including one in three renters – 25% received food stamps from the Supplemental Nutrition Assistance Program.

The percentage of gross monthly income spent on housing costs – a combination of mortgage or rent payments, utilities, insurance and property taxes – is considered an indicator of housing affordability. In general, households that spend more than 50% of their monthly income on housing are considered severely burdened by housing costs.

What are Realtors doing?

NAR is working with the federal, state and local governments to speed up distribution of nearly $50 billion in rental assistance. These funds can cover up to a year-and-a-half of back and future rent and utilities for struggling tenants, which will then provide relief to small housing providers. Nearly half of all rental housing in America is a mom-and-pop operation.

NAR has also partnered with the Food Recovery Network (FRN) since 2019 to fight hunger and food insecurity. FRN provides guidance and resources that ensure a number of NAR, state and local Realtor associations are Food Recovery Verified. That designation allows the groups to recover surplus food from various events and donate it to hunger-fighting non-profits. NAR and FRN extended the partnership this year as the association again began hosting in-person events. Since June, NAR has donated 500 pounds of surplus food from three national events.

NAR CEO Bob Goldberg and FRN’s Executive Director Regina Anderson spoke about the collaboration during the association’s Leadership Summit, an annual gathering of state and local Realtor® association presidents-elect and association executives.

“Last month alone, more than eight million households reported not having enough food to eat,” Goldberg said. “The need is great, but so are the philanthropic spirit and actions of Realtors.”

© 2021 Florida Realtors®

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Fla. Agencies Receiving 10 Fair Housing Grants Worth $2.4M

Of that money, almost $1.5M goes to four groups under HUD’s Private Enforcement Initiative to investigate and litigate complaints filed under the Fair Housing Act.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) awarded $47.4 million to fair housing organizations across the country under its Fair Housing Initiatives Program (FHIP), with $2,371,333 going to organizations in Florida.

The grants support 120 national and local fair housing organizations working to address violations of the Fair Housing Act, and part of the funding allows grantees to conduct fair-housing investigations, test to identify discrimination in the rental and sales markets, and if discrimination is found, file fair housing complaints with HUD.

“The fair housing groups’ HUD funds are a critical piece of combatting housing discrimination,” said Jeanine Worden, HUD’s acting assistant secretary for fair housing and equal opportunity.

HUD grant categories

  • Private Enforcement Initiative (PEI) – $34,556,620 is being awarded to organizations that conduct intake and testing, and that investigate and litigate fair housing complaints under the Fair Housing Act.
  • Education and Outreach Initiative (EOI) – $10,747,218 is being awarded to organizations that educate the public and housing providers about the Fair Housing Act. These grants will also support state and local organizations that enhance fair housing laws that are substantially equivalent to the Fair Housing Act.
  • Fair Housing Organizations Initiative (FHOI) – $2,156,183 is being awarded to help build the capacity and effectiveness of non-profit fair housing organizations, particularly organizations that focus on the rights and needs of underserved populations, including rural and immigrant populations.

Florida agencies funded to conduct fair housing investigations

  • Housing Opportunities Project for Excellence (HOPE) Inc.: $375,000
  • Jacksonville Area Legal Aid Inc.: $371,333
  • Community Legal Services of Mid-Florida Inc.: $375,000
  • Legal Aid Society of Palm Beach County Inc.: $375,000

Florida agencies funded to create education and outreach programs

  • Florida City of Tampa: $125,000
  • Florida Legal Services Inc.: $125,000
  • Housing Opportunities Project for Excellence (HOPE) Inc.: $125,000
  • Jacksonville Area Legal Aid Inc.: $125,000
  • Legal Aid Society of Palm Beach County Inc.: $125,000

In addition, Florida Legal Services Inc. will receive $250,000 under the FHOI program.

© 2021 Florida Realtors®

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NAR: Good Neighbor Award Finalists Strengthen Communities

NAR’s awards highlight Realtors across the U.S. who have dedicated their time, money and passion to helping others – and one 2021 finalist hails from Fla.

WASHINGTON – The National Association of Realtors® (NAR) honored 10 Realtors® as finalists for its 2021 Good Neighbor Awards, including one Realtor from Clearwater, Fla.

Now in its 22nd year, the Good Neighbor Awards recognize Realtors who have made significant, tangible volunteer contributions in their communities to improve the lives of their neighbors in need.

Christina Sauger with Rutenberg Realty Inc. in Clearwater, Fla., is one of the 10 finalists. Sauger founded The Harbor Dish, a nonprofit organization that provides healthy meals and companionship to anyone regardless of their ability to pay. The mobile program includes hosting large-scale community dinners on a pay-what-you-can model, and delivers hot meals to seniors, foster children, domestic violence survivors and others in need.

NAR President Charlie Oppler says he’s proud to honor this year’s Good Neighbor Award finalists “for continuing the Realtor tradition of giving back and making a difference. Despite the many challenges navigating COVID-19 restrictions and running a nonprofit during the pandemic, these Realtors were there to help their communities at a time their contributions were needed most.”

The public can vote for their favorite of the 10 Good Neighbor finalists, which will help the top three finalists to be recognized as Web Choice Favorites. The Web Choice Favorites will take home an additional donation of $2,500, $1,250 and $1,250, respectively. Cast your vote now through Oct. 1, 2021, for Florida’s finalist, Christina Sauger.

Both the winners, as determined by judges, and the Web Choice Favorites will be announced on October 6. The five winners will receive a $10,000 grant and national media exposure for their charity, including a feature in the fall issue of Realtor Magazine. The winners will be honored during the upcoming 2021 Realtor Conference & Expo in San Diego, Calif. Five honorable mention winners will receive $2,500 grants:

In addition to Sauger, the finalists are:

  • Dawn M. Adams, The Palmetto Real Estate Company, Aiken, S.C.
    Since 2011, Adams has been helping to rescue and rehabilitate victims of human trafficking both in the U.S. and internationally. As a board member with Abolish Slavery Coalition (AbolishSlavery.org), Adams organizes multi-agency task forces that help locate those who were kidnapped, while helping rescued victims begin the process of restoring normalcy in their lives.
  • Bob Bell, Mile Hi Property, Denver, Colo.
    Every Friday, Bell and hundreds of volunteers meet to pack and deliver weekend meals for 10,000 at-risk children scattered across 72 Denver-area schools. By eliminating overhead and relying on his dedicated volunteers, Bell has turned Food for Thought into a powerhouse, with 497,205 backpacks of food delivered to date, the equivalent of almost 4 million meals.
  • Sharon Chambers-Gordon, Windermere Professional Partners, Tacoma, Wash.
    Founder of Raising Girls, a nonprofit that helps low-income young women boost their confidence and self-esteem, Chambers-Gordon and her volunteer team donate menstrual hygiene products to tweens and teens who might otherwise skip school and sports because of embarrassment or financial constraints.
  • Chris Cockerham, F.C. Tucker/Bloomington Realtor, Bloomington, Ind.
    Cockerham helps combat homelessness by taking advantage of his expertise and contacts in the real estate industry. He has spent more than a year helping New Hope for Families find a new permanent location, which doubled its shelter capacity and raised $1.2 million, in large part from local Realtors.
  • Sydney Ealy, Brooks & Davis Real Estate, Houston, Texas
    In 2014, Ealy founded TWST4Girls, a nonprofit organization that offers a variety of educational programs and one-on-one mentoring for low-income girls. The opportunities are designed to help girls aged 11-17 boost self-esteem, learn important life skills, and start on a path toward higher education.
  • Brent Gieseke, Exit Realty Professionals, Kansas City, Mo.
    Gieseke wears many hats as a volunteer serving the needs of refugee families. Since 2018, he’s helped acquire and renovate homes, called “Blessing Houses,” while teens from refugee families work at his side to learn job and life skills designed to help in their acclimation to life in America.
  • Kibe Lucas, KW The Kibe Lucas Team, Wasilla, Alaska
    For 20 years, Lucas has been a passionate board member for the Children’s Place, a nonprofit that offers hope to families impacted by child abuse and neglect. He has leveraged his real estate experience to secure land for a new headquarters, raise half a million dollars, and recruit countless supporters to promote the well-being of more than 4,000 American children.
  • Denny and Linda Ellsworth-Moore, Coldwell Banker Hubbell BriarWood-Delta, Lansing, Mich.
    Since 2004, Denny Moore and Linda Ellsworth-Moore have volunteered with Child and Family Charities, a nonprofit that supports children in need. The couple has raised $345,000 and collects donations of bikes, school supplies, clothing, and holiday gifts, with special emphasis on bikes for foster children.
  • Raymond Siddell, Keller Williams Legacy Group, Cedar Rapids, Iowa
    Siddell mobilized his community’s emergency response after a violent derecho damaged 90% of the homes and buildings in his hometown. During his efforts, he discovered an underlying food insecurity in the region, leading him to create Together We Achieve. This now permanent food pantry has distributed 1.2 million pounds of food to local residents in one year.

NAR’s Good Neighbor Awards is supported by primary sponsor realtor.com, plus Chase and The Center for Realtor® Development.

© 2021 Florida Realtors®

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The Fla. Wall Street? Developers Focus on West Palm Beach

U.S. financial markets keep some New Yorkers in New York, and developers think a southern hub might give fence-sitting investors another reason to relocate.

WEST PALM BEACH, Fla. – Developers plan to repurpose West Palm Beach as Florida’s answer to Wall Street, with financial firms like Goldman Sachs Group and Steve Cohen’s Point72 Asset Management moving in to help make the state more attractive to New Yorkers driven out of Manhattan by COVID-19.

One particular target: Financiers on the fence about leaving New York City.

Seasonal residents once largely skipped West Palm Beach, but the debut of amenities like the Kravis Center for the Performing Arts, a Restoration Hardware outlet, hotels and ultra-luxury waterfront condominium The Bristol raised its cachet. The Bristol sold out after COVID stuck, while homes in nearby neighborhoods El Cid and SoSo were scooped up at record prices.

Most downtown Class A office space is now owned by Stephen Ross’ Related Cos., including a tower that aspires to be the epicenter of Wall Street South. Goldman Sachs will have a branch in this building, with some of the firm’s most senior trading executives expected to be tenants.

Laura Lofaro, CEO of financial executive-search and consulting firm Sterling Resources International, says it remains uncertain whether West Palm Beach’s financial dreams will bear fruit, however, but real estate entrepreneurs like NDT Development’s Ned Grace are counting on an influx of young adults drawn to the retail, dining, housing and office space under development.

Source: Bloomberg Wealth (09/01/2021) Gordon, Amanda L.; Natarajan, Sridhar; Wong, Natalie

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Less-than-Great Credit Score? How to Improve It

Stay current with creditors tracked by credit score firms, but also do some homework: Understand credit scores and how they impact your life.

NEW YORK – Good credit opens doors. Not only can it help you secure an affordable loan, but it is also often needed for access to open everyday accounts, such as for your utility services and cell phone. It can help you land a job, boost your chances of securing an apartment, and even improve your dating prospects, according to research.

Whether your credit is “good” is determined by your credit history, which looks at your payment patterns over time and your credit score, which rates your credit risk at a moment in time. But it’s more complicated than that, and if you’re like many Americans, you may be confused by some of the details.

According to a recent Freddie Mac survey of homeowners and renters, one in three Americans isn’t aware that credit score elements such as the length of credit usage or having joint credit and loan accounts are reported to credit bureaus. Additionally, more than half of homeowners and renters aren’t aware that being behind on housing payments can result in an impaired credit rating, and nearly 60% don’t know or realize it can impact their ability to get a loan in the future.

To get a handle on your credit, consider these tips:

1. Pay on time. The best thing you can do to build, maintain or improve your credit is pay bills on time. The types of accounts considered for credit payment history include:

  • Credit cards
  • Retail accounts, such as credit cards from department stores
  • Installment loans, such as car loans, on which you make regular payments
  • Mortgage loans
  • Student loans
  • Finance company accounts, such as car dealer in-house lenders

2. Watch your credit card balance. If you allow your credit cards to reach high, unpaid balances, or if you only pay the minimum due, credit cards can cost you hundreds (and even thousands) of dollars in interest and can impair your credit.

3. Review your credit report annually. You’re entitled to receive a free copy of your credit report each year from each major credit bureau via annualcreditreport.com. You can also keep an eye on your credit score through free apps such as Credit Karma, NerdWallet, WalletHub or others. Be aware, however, the scores shown in these apps are not the same as FICO scores used by most lenders and creditors to make lending or credit decisions. Still, they’re useful for reviewing the financial activities affecting your credit.

4. Get savvy. Education has power. Learn more about managing credit by checking out Freddie Mac’s free suite of financial education resources, CreditSmart. Over the past two decades, more than 5 million consumers have benefitted from these tools and now this program can be customized by users.

“Financial education is personal. Whether you’re renting a home, are on the path to homeownership or saving for the future, our newly released curriculum empowers you to customize your experience and learn at your own pace,” says Cindy Waldron, vice president, Single-Family Housing Insights and Solutions at Freddie Mac.

To access these resources, which are available online or on mobile devices, visit creditsmart.freddiemac.com.

The impact of good credit on your life can’t be overstated. Use free resources to learn more about how it works. Then, stay on top of your credit by actively monitoring it and working to improve it.

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Metro Mortgages Can Be Cheaper than Paying Rent

In many areas, homeownership not only offers long-term wealth but also immediate cost benefits. For some FHA 3.5%-down buyers, monthly payments actually go down.

NEW YORK – Nikki Daniel’s rent had jumped twice – in just the past two years.

For this year, she was looking at an increase from $1,275 to $1,350 for a three-bedroom house in McCalla, Alabama, a suburb of Birmingham. That’s a nearly 6% jump with no guarantee that there wouldn’t be further increases at a time when inflation has increased food and gas prices.

“I knew my mortgage payments would be lower than my rent,” said Daniel, who works at an auto plant.

About a year ago, on the advice of her Realtor, she decided she had to get her credit in order so she could buy a home. In August, Nikki and her husband, John, bought a three-bedroom house for $265,000 just two blocks away from their rental home.

After putting down 3.5% of the cost as a down payment and using an FHA loan to finance their mortgage, their monthly payments are $1,250 – lower than what they were paying in rent two years ago.

The Daniels are taking advantage of a trend that is sweeping the country: Buying a starter home now costs less per month than renting a similar-sized unit in 24 of the 50 largest U.S. metros, according to a recent Realtor.com report.

Rents keep increasing making mortgages attractive

This is possible because rents continue to rise at a harrowing clip – up 10% in July over last year and 12.2% since 2019 – while and mortgage rates remain low.

Birmingham, one of America’s most iconic cities for its civil rights movements, tops the list of markets that favor buying. There, the monthly cost of buying a “starter” home (defined as studio, one or two-bedroom dwellings) was $728 in July, which was 33% less than the monthly rent of $1,089, for a monthly savings of $361. That’s more than $4,000 over a year.

Other top markets where it’s more affordable to buy a starter home versus rent include St. Louis (29.4% lower), Pittsburgh (28% lower), Orlando, Florida (26% lower) and Cleveland (26% lower).

“Rents hit new highs in 40 of the 50 largest U.S. metros this July and grew at an almost double-digit pace – the fastest yearly rate we’ve seen in the last 18 months,” said Danielle Hale, chief economist for Realtor.com. Monthly starter home costs are on an average 15.5% ($216) lower than rents in nearly half of the 50 largest U.S. metros, according to the report.

If first-time buyers were worried about monthly costs to take the homeownership plunge, data suggests it’s worth exploring in many markets, said Hale.

Looking for starter homes outside of crowded cities

While housing inventory remains historically low, the number of homes for sale in July decreased by 33.5% over the past year, a lower rate of decline compared to the 43.1% drop in June. Many of July’s highest rent gains were seen in secondary markets where rental demand has exploded during COVID-19, driven in part by remote work enabling employees to escape crowded, expensive big cities, said Hale.

First-time homebuyers in July’s highest-priced rentals experienced a respite compared to renters as companies around the country are expecting vaccinated Americans to slowly head back to offices.

In the top 10 metros that favored first-time homebuying over renting in July, monthly starter home payments were an average 24.3% lower than rents, driven in part by lower median listing prices ($192,000) than the national average ($297,000).

As Americans looked for more space during the pandemic, larger units led the rent growth. The median monthly rent for two-bedroom units increased by $238 (15.2%) since July 2019.

Mounira Affoune had been renting a one-bedroom apartment for $700 a month in Pittsburgh with no lease. With two girls, her need to move into a two-bedroom was urgent. But when she explored her rental options for two bedrooms, they were close to $1,000 a month.

That’s when Affoune and her husband decided to put all of their savings toward a down payment and buy a $189,000 two-bedroom house in August. The monthly mortgage payments come to about $850.

Daniel in McCalla, who became a first-time homeowner at age 45, credited her real estate broker, Wyonna Baldwin, for giving her the right advice and encouraging her to buy.

“I had been working with Nikki for over a year while she was improving her credit score. I tell my clients, think about how many times you eat out a day and start saving from that point,” Baldwin said. “It was God’s grace that Nikki found her home. Sellers know that buyers are grasping at straws.”

Copyright 2021, USATODAY.com, USA TODAY

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Mortgage Rates Unchanged this Week, Still at 2.87%

Rates continue to average less than 3% as signs show the economy – at least so far – appears to be outpacing the delta variant of COVID.

McLEAN, Va. (AP) – The average long-term mortgage rate was unchanged from last week as the economy continues to show encouraging signs even as hospitalizations from the delta variant of the coronavirus remain elevated.

Mortgage buyer Freddie Mac said Thursday that the average rate for a 30-year mortgage held at 2.87% as demand for homes remained stable. The benchmark rate, which peaked this year at 3.18% in April, stood at 2.93% this time last year.

The rate for a 15-year loan, a popular option for homeowners refinancing their mortgages, ticked up to 2.18% from 2.17% last week.

There is growing concern that the highly contagious delta variant could cause the current prolific economic resurgence to sputter.

Last week the government reported that U.S. gross domestic product – the total output of goods and services – grew at a booming 6.6% annual rate in the April-June quarter, but many economists have been downgrading their estimates of growth in the U.S. economy for the current quarter and full year.

In another good sign that the economy is so far outrunning the delta variant, the government reported Thursday that the number of Americans applying for unemployment benefits fell last week to 340,000, a pandemic low.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Real Estate Group Statements Back Biden Housing Plan

NAR President Oppler says Realtors have “long advocated for many of the policies,” though the promise of 100K homes “is just a small fraction” of the 6 million needed.

WASHINGTON – Following the Biden Administration’s announcement of new housing policies to help more Americans buy or rent a home, most housing groups issued statements backing the changes.

National Association of Realtors® (NAR) President Charlie Oppler “applauded” the effort to “address America’s housing supply crisis and to prevent the expansion of corporate landlords at the expense of homeownership.”

According to Oppler’s statement, “Distressed homeowners should have the opportunity to buy-back their homes – but if not, other worthy homeowners should receive next priority. Affordable homeownership brings a magnitude of benefits to families, communities and our national economy, and now is the time to ensure we continue that support.”

Oppler noted some studies NAR commissioned that focused on housing-supply problems, noting that the latest promise still won’t make up for the current deficit.

“The administration’s plan to make available 100,000 new homes is just a small fraction of the roughly 6 million units needed to fill the gap in housing supply,” he says, though “NAR has long advocated for many of these policies. We are encouraged and grateful for the effort put forth by the White House.”

In a statement released by the Mortgage Bankers Association (MBA), President and CEO Bob Broeksmit says, “MBA strongly supports the administration’s efforts to increase the housing supply by encouraging the construction and rehabilitation of affordable apartments and homes for renters and first-time buyers. The lack of supply is a huge problem, and HUD and FHFA should do what they can administratively while Congress considers more significant initiatives.

The National Association of Home Builders (NAHB) also supports the change.

“NAHB applauds the Biden administration for its newly announced plan to increase affordable housing supply,” he says. “It’s important that the plan includes tangible policies to incentivize new residential construction. We look forward to working with the administration in the effort to boost the supply of affordable rental housing and single-family housing for America’s hard-working families.”

© 2021 Florida Realtors®

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More Sellers Listing Homes as Buyers Seem to Hesitate

Realtor.com got 18K more new listings in Aug. 2021 than it did in Aug. 2020 – and more were affordable, entry-level homes. Realtor.com’s economist says it’s still a seller’s market, but a well-priced home might get 3 bids now compared to the 10 it would have received in 2020.

SANTA CLARA, Calif. – August housing data shows early signs of sellers beginning to compete for buyers, according to realtor.com’s monthly housing report. It says inventory, while still down year-to-year (25.8%), is still down less than it was just one month earlier (33.5%). The researchers also noted an increase in the rate of sellers making price adjustments.

In August, new listings rose 4.3% year-to-year as new sellers continued to list entry-level homes in more affordable price ranges. The share of sellers who made listing price adjustments grew 0.7% year-over-year to 17.3% of active inventory – the highest share in 21 months and closer to typical 2016-2019 levels.

“Low mortgage rates have motivated homebuyers to endure this year’s challenging market, and now some buyers are starting to see their persistence pay off,” says realtor.com Chief Economist Danielle Hale. “This month, new sellers added more affordable entry-level homes to the market compared to last year, while others began adjusting listing prices to better compete with an uptick in inventory.”

Hale says it’s still a seller’s market – homes sell quickly and at record-high prices – but now “a home priced well and in good condition may see two or three bids compared to 10 last year. For sellers not seeing as many offers, it may be worth revisiting pricing strategies as buyers continue searching for homes that fit their budgets.”

Florida market changes on realtor.com’s website

Realtor.com includes four Florida metro areas in its study, and the results are mixed. Active listings on realtor.com’s website are down in all four year-to-year:

  • Jacksonville: Down 43.2%
  • Miami (Miami-Fort Lauderdale-West Palm Beach): Down 46.6%
  • Orlando (Orlando-Kissimmee-Sanford): Down 47.7%
  • Tampa (Tampa-St. Petersburg-Clearwater): Down 40.7%

However, the number of new listings in August rose in two metros, up 2.8% in Jacksonville and up 8.6% in the Tampa area, even as they fell year-to-year in Miami, down 10.2%, and Orlando, down 2.3%.

About one in five sellers reduced their prices in three of the four metros, realtor.com claims, but closer to one in 10 in Miami:

  • Jacksonville: 20.6% reduced prices
  • Miami: 11.7% reduced prices
  • Orlando: 19.3% reduced prices
  • Tampa: 20.7% reduced prices

Other findings in realtor.com’s monthly study for August

  • August was the fourth consecutive month of national inventory improvements from the steepest 2021 declines seen in April (down 53.0%). However, the U.S. housing supply is still short 223,000 active listings compared with last year.
  • Inventory improved at a faster pace across the 50 largest U.S. markets in August, down an average 20.7% year-over-year – but six metros saw inventory surpass 2020 levels.
  • 432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.
  • There were more entry-level homes (up 6.4% for less than 1,750 square feet), while listings with 3,000-6,000 square feet declined 4.6%. The Tampa metro (up 13.7%) had one of the highest year-to-year gains for entry-level homes.
  • The typical U.S. home spent 39 days on the market in August, 17 days faster than last year and 24 days faster than in the same month during 2017-2019, on average. However, time on market continues to moderate from the record-fast pace seen earlier in the pandemic, at two days slower in August than in June (37 days).

© 2021 Florida Realtors®

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Could Climate Change Sink U.S. Financial Markets?

Insurers play a big role in financial markets, so if the number and intensity of natural disasters increases, could financial woes follow? A new study hopes to find out.

WASHINGTON (AP) – In a season of daunting wildfires and flooding, the Biden administration is taking an initial step to assess how climate change could harm financial markets – it’s planning to launch on Tuesday a 75-day comment period on how the impacts could reshape the insurance sector.

Insurers face payouts from wildfires and flooding risks that could cause premiums to rise for many Americans, but they’re also among the largest investors in U.S. financial markets, with $4.7 trillion in assets as of the end of last year, according to the Treasury Department notice being posted in the Federal Register.

A senior Treasury official said the information gathered would help to more fully understand how climate change could potentially destabilize the stock, bond, commodities and housing markets, and how to protect markets as a result. The official, insisting on anonymity to discuss the notice, said the goal would be to make any data usable for consumers, companies, states and regulators.

The request for information comes as the United States is coping with the unmistakable costs of climate change, with wildfires raging in western states and Hurricane Ida knocking out power for New Orleans and hundreds of thousands of people in Louisiana.

Joe Brusuelas, chief economist at the consultancy RSM, has estimated that the hurricane damage will cause a 0.2% drag in U.S. gross domestic product this quarter. That drag should be made up once rebuilding takes place. But economic costs could endure because of higher insurance costs. The First Street Foundation estimated in a report this year that the 4.3 million homes at risk of substantial flooding would need to see their premiums for flood insurance rise 7.2 times over the next 30 years to cover the expense of the growing risks.

President Joe Biden has focused on the physical damage in virtual meetings this summer with state governors and local leaders, yet he signed an executive order on May 20 to make sure that financial institutions are specifically prepared to navigate the challenges from climate change.

Treasury’s Federal Insurance Office is following up on that order by publishing a request for information with 19 key questions. These questions include what types of data are needed to best measure the risks, how to standardize climate-related disclosures and which factors to consider for major market disruptions.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Biden Releases Plan for 100K Affordable Housing Units in 3 Years

A cross section of federal agencies tinkered with policies in an effort to boost affordable housing and the middle class, according to the White House. For example, homesteading buyers will have more exclusive time (30 days) to buy foreclosed homes under FHFA.

WASHINGTON – The Biden Administration announced a number of changes intended to boost the availability of affordable housing, including a broad goal to deliver 100,000 units within three years. The White House provides an overview of the changes on its website.

The change starts with manufactured homes and buildings with two to four units, and a promise to make it easier to get a mortgage. Changes to make that happen will fall under Fannie Mae and Freddie Mac, which currently back over half the mortgage homes in America. Those enterprises are under the control of the Federal Housing Finance Agency (FHFA).

Another push will make it easier for homebuyers to secure a home if they plan to live in it, with the White House release noting how many homesteaders have to compete with investors. Part of this will be accomplished by new limitations on foreclosed real estate-owned (REO) foreclosed home sales if they’re owned by government agencies – a number that could rise as forbearance ends and more homes are expected to enter the foreclosure process.

For renters, federal agencies plan to boost financing options for apartment buildings, largely through tax credits, loans and grants.

The White House also says its economic agenda will help build and renovate two million homes. That agenda comes in the form of low-income housing tax credits, a new tax credit for specific at-risk neighborhoods, and incentives that entice local governments to change exclusionary zoning and land-use policies.

According to the White House release, “One out of every six homes purchased in the second quarter of 2021 was acquired by investors, and reports indicate that in some markets, that number is one in four. … Large investor purchases of single-family homes and conversion into rental properties speeds the transition of neighborhoods from homeownership to rental … making it harder for aspiring first-time and first-generation home buyers, among others, to buy a home.”

FHFA “First Look” period

Buyers seeking a home for themselves – along with public entities and nonprofits – will now have 30 days (up from 20 days) for exclusive access to buy Fannie Mae and Freddie Mac real estate owned (REO) properties before investors have a chance to buy them. FHFA says this gives individual and families more time to find adequate financing.

“Extending the amount of time owner occupants have to bid on a REO property, without competition, is especially important for neighborhood preservation while the supply of homes for sale is severely limited,” says FHFA Acting Director Sandra L. Thompson.

Increase in the Fannie Mae and Freddie Mac’s LIHTC Cap

FHFA announced that Fannie Mae and Freddie Mac can each invest up to $850 million annually in the Low-Income Housing Tax Credit (LIHTC) market as equity investors, effective immediately. Previously, each was limited to $500 million.

Within the $850 million, any yearly investments above $425 million must be in areas identified by FHFA as markets that have difficulty attracting investors – and increase in the cap. This money must either support housing in Duty to Serve-designated rural areas, preserve affordable housing, support mixed-income housing, provide supportive housing, or some other affordable housing objectives.

Specific changes included in the White House announcement

  • Boost the supply of quality, affordable rental units by relaunching the partnership between the Department of Treasury’s (Treasury) Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program in order to enable eligible state housing finance agencies (HFAs) to provide low-cost capital for affordable housing development; raising Fannie Mae’s and Freddie Mac’s (the Enterprises) equity cap for the Low-Income Housing Tax Credit (LIHTC), the largest federal program for the construction and rehabilitation of affordable rental housing; and making more funding available to Community Development Finance Institutions (CDFIs) and non-profit housing groups for affordable housing production under the Capital Magnet Fund.
  • Boost the supply of manufactured housing and 2-4 unit properties by expanding financing through Freddie Mac. Along with Fannie Mae’s and the Federal Housing Administration’s (FHA) existing policies, these steps will enable more Americans to purchase homes and increase the availability of rental units throughout the country.
  • Make more single-family homes available to individuals, families and non-profit organizations – rather than large investors – by prioritizing homeownership and limiting the sale to large investors of certain FHA-insured and HUD-owned properties, in addition to expanding and creating exclusivity periods in which only governmental entities, owner occupants, and qualified non-profit organizations are able to bid on certain FHA-insured and government-owned properties.
  • Work with state and local governments to boost housing supply by leveraging existing federal funds to spur local action, exploring federal levers to help states and local governments reduce exclusionary zoning, and launching learning and listening sessions with local leaders.

Even with the changes, however, the announcement also concludes that there’s “no magic formula to quickly relieve supply constraints.”

© 2021 Florida Realtors®

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Homebuyers Flock to Florida Real Estate

In July 2020, 2,216 Redfin users moved to Miami; in July 2021, the number grew to 7,610. Some moved because they could work from home, some to escape lockdowns.

SEATTLE – According to Redfin’s monthly migration report, July saw the net inflow of Redfin users moving to Miami rise to 7,610 from 2,216 last year. Despite the potential increase in flood risks and coastal storms, Florida remains a top spot for buyers.

“Home buyers are moving here from all over the map – Atlanta, Cincinnati, New York, Columbia, Mexico City, Pittsburgh and Philly, to name a few,” says Milagros Alvarez, a Miami real estate agent at Redfin. “The beaches, warm weather and low taxes are the major draws. Florida has also been much less shut down than other states during the pandemic, which some house hunters see as a positive.”

Tampa and Cape Coral are also hot areas for migration, with net inflows rising to 4,315 from 2,778 in July 2020, and to 3,109 from 1,790, respectively, according to Redfin’s analysis.

“The homebuyers I talk to rarely mention climate change,” says Alvarez. “Most of them aren’t concerned. A lot of people seem to have this idea that it won’t impact them in their lifetime, so it doesn’t need to be a consideration when buying a home.”

However, Daryl Fairweather, Redfin’s chief economist, suggested that buyers should at least keep climate change in mind, saying, “Miami homebuyers should think about how they can make their homes more resilient to climate change and how their finances would be impacted if their homes lost value.”

Source: HousingWire (08/30/21) Volkova, Maria

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Rental Scams Explode in a Tight Housing Market

Desperation helps scammers. A strong need for affordable housing entices victims to lower their defenses, and some will send money to landlords they’ve never met.

NEW YORK – With homes and apartments so tough to find this year, many renters are desperate to find anything. That’s how one woman ended falling victim to a rental scam.

Mariah Dates had no luck finding a rental home until a cute two-bedroom house popped up on Facebook Marketplace for just $700 a month.

“I emailed the rental agent, and she emailed me back with interior pictures of the house and everything,” Dates said.

Thrilled, Dates drove by the house to make sure her great find was real. “It’s a real house,” she said. “You can go see it.”

But she couldn’t go inside. The landlord claimed she was currently out of state.

So Dates immediately filled out an application, then sent a deposit and two months’ rent (which the landlord required ) via the Zelle app.

She never heard back. “I ended up sending the money for the deposit and the rent but never got the keys,” she said.

No keys showed up via FedEx, as it had been promised, and Dates then found herself ghosted, with no text response from the landlord ever again.

Another victim of the rental scam

It turns out the listing was fake, and Dates was the latest victim of the home rental scam.

The house and the photos were real but were stolen from a recent “for sale” listing of the home, available for anyone to see on Zillow or Realtor.com. It was never for rent, and the real selling agent did not know about any rental offer on it.

The so-called “rental agent” turned out to be a hacked Facebook page, where someone used an innocent person’s profile to post the home on Facebook Marketplace.

In total, Dates was out a deposit, plus two full months’ rent. “It all comes out to $2,145 that I lost,” she said.

We’ve sent her information to her bank, in the chance they can help. In most cases, they can’t, however, because the money was sent via cash and is untraceable (in this case, to a burner cell phone number).

The rental scam is becoming so common this year because of the red hot housing market. With high home prices, so many people are desperate to rent homes, it makes them easy prey for scammers.

Warning signs of a scam

The FTC says to be suspicious of rental listings if:

  • The landlord wants a deposit before you have met.
  • The landlord is out of town and cannot meet you personally.
  • You can’t go inside the home or apartment.
  • They ask for a deposit via Venmo, Zelle, Google Play, iTunes, or other gift cards.

Finally, in this tight housing market, be suspicious of any rental that sounds too cheap, so you don’t waste your money.

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