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house

Homebuilder Sentiment Falls for Ninth Consecutive Month

U.S. homebuilder confidence in the housing market dropped to its lowest level since the beginning of the COVID-19 pandemic. Experts believe the high inflation rate and rising borrowing costs are contributing to first-time homebuyers’ hesitancy to purchase new single-family homes.

The National Association of Home Builders/ Wells Fargo Housing Market Index, which measures the activity of the single-family housing market, fell to 46 in September after declining for the ninth consecutive month. The last nine months are the most prolonged and persistent decline in builder sentiment in the last four decades.

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Experts say a Housing Market Index above 50 shows a healthy market with net positive growth. In November 2020, the index rose to 76, the highest in 35 years, due to the Federal Reserve pushing the federal funds rate to nearly zero. After the pandemic’s dampening effect, the Fed’s loosening of the federal funds rate was meant to stimulate the economy back to health.

Recently The Federal Reserve has been raising interest rates by adopting an aggressive monetary policy to bring the inflation rate back down to sustainable levels. A lack of supply due to construction costs fueled by those interest rates has slowed down building into a housing recession.

NAHB chairman Jerry Konter said builders are responding to a falling market by using incentives to bolster sales, “including mortgage rate buydowns, free amenities and price reductions.”

Pantheon Macroeconomics analyst Ian Shepherdson believes that builder sentiment will continue to decline.

 “This probably will not mark the bottom of the cycle, given the latest surge in mortgage rates above 6%. The rate of fall of mortgage applications slowed over the summer, but the early September numbers point to a renewed sharp decline.”

Mortgage rates have skyrocketed to those seen during the 2008 housing crisis, with interest rates on 30-year fixed loans hitting 6%. According to data released from the Mortgage Bankers Association, mortgage rates have already risen 4% so far this year.

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This increase in mortgage rates would add $389,000 in interest payments to the life of a $500,000 single-family home purchase. The association’s data also showed that the seasonally adjusted MBA Purchase Index rose only 0.2%. New applications for mortgages went down  1.2%.

Though builder sentiment often signals the eventual direction of mortgage applications, NAHB CEO Jerry Howard told Fox Business that people should have confidence that the housing market will pick back up again.

I think you’re seeing a weakening in virtually every market, but those that were stronger are weakening less. I guess the most important thing that investors and people need to remember is that Americans still want to own their homes and that, as soon as the conditions turn a little more favorable, housing will pick up. That will pick up the whole economy.”

flooding

$34B of US Real Estate May Be Fully or Partially Underwater by 2050

Rising waters due to climate change could engulf $34 billion in US real estate within the next 30 years.

According to a report from the nonprofit Climate Central, up to 650,000 properties will be underwater or partially below the tidal boundary level within 30 years. Thirty counties across the country will lose more than 10% of their useable land, and 100 counties will lose at least 2% of their usable land.

The states most affected will lose a sizable portion of their total dry landmass. These states include Louisiana (8%), Florida (1.8%), North Carolina (1.3%) and Texas (0.2%).

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Rising waters will likely make these locations less desirable to live and work in, causing property values to plummet. Property taxes are an integral part of a municipal’s budget. They pay for many community social services, including schools, fire protection, emergency services, transport and other governmental aids.

Taxes also fund disaster relief and the subsequent costs of rising sea levels. New infrastructure, building safeguards against rising tides and relocating entire communities cost money. The aftermath of a rise in waters will quickly deplete many localities of their necessary funding.

“Property taxes fund local government operations, which typically include services such as K-12 schooling, roads and other infrastructure, police and fire protection, water, waste management, sewers, public transit, parks and public housing. Quality public services at competitive tax rates are key to attracting and retaining residents and businesses, which in turn support local tax revenues. Diminished property values and a smaller tax base can lead to lower tax revenues and reduced public services–a potential downward spiral of disinvestment and population decline, reduced tax base and public services and so on.”

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Seas will rise 8 to 23 inches along the nation’s coasts by 2050. The East Coast, particularly the Southeast, will be hit the hardest. Due to the sediment that flows in from the Mississippi River and the drilling for oil and gas pipelines, the gulf coast will be hit even harder by rising water levels and sinking ground.

Mark Rupp, director of the adaptation program at Georgetown Climate Center, points out that insurance carriers are reluctant to serve the Florida market, have become insolvent or have pulled out from the state entirely.

“How many mortgage lenders want to be lending for mortgages in flood-prone areas if they don’t think they’re going to be paid back?”

Rupp emphasizes that it is essential that these communities can rely on their state and federal governments to pay attention, fund their communities and provide a plan.

According to NASA, the earth’s climate has changed at a rate unseen in the past 10,000 years. The current rate of global warming is “occurring roughly ten times faster than the average rate of warming after an ice age.” The carbon dioxide we release is “increasing about 250 times faster than it did from natural sources after the last Ice Age.”

For sale

The Housing Market Is In A Recession And What It Means For Those Looking To Buy A House

Over the last few months, the housing market was at an all time high between high demand, surging prices and low interest rates.

However, recent data revealed that the market may actually be in a “recession” from where it once was. 

“We’re witnessing a housing recession in terms of declining home sales and home building,” said Lawerence Yun, chief economist for the National Association of Realtors.

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The slowdown in market sales will hurt the economy but it could also help those people who are searching for a home who are willing to pay the high prices.

According to Barrons, ever since July, previous homes were sold at an annual rate of 4.81 billion which marked the lowest rate since November of 2015.  

New home sales also have found themselves in a decline into their their lowest level in six years. 

“It’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”

Both home builders and home sellers are experiencing the slowdown which explains why the prices are still up even with the start of this “recession.”

The rise and fall of the housing market also goes along with supply and demand. Even though the demand for homes has dropped recently, the supply count is still very tight. 

The lack of supplies is partly due to the lack of construction that has occurred over the last decade and even since the 2008 crash.

The demand for buying new homes have continued to drop since January, but the mortgage rates have still continuously faced a rise from 3.3% at the beginning of the year to 6% now.

The high mortgage rates have made it harder for those looking to buy a home to afford them.

The demographics also play in part with the supply and demand of the housing market as well. 

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Even while there is a recession within the market, there are still more people searching for a home than there are actual homes to buy. 

“We are seeing more inventory come into the market, but it’s not enough to meet the buyer demand,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR. 

Given the constant highs and lows of the market, buyers may want to be patient before they decide if they are ready to commit to buying a home. 

For first-time homebuyers, they also have to consider the price of rent because that is consistently increasing as well. 

“Even though borrowing costs have risen, it still in the long run may be worth buying a home given that what’s driving inflation right now is rising rental prices. It still may be an opportunity to get out of the pressure of rents,” said Jeffrey Roach, chief economist at LPL Financial, a national broker-dealer. 

appraisel

Black Couple Sues Real Estate Appraiser After Home Valuation Increases By $300,000 When Shown By White Colleague

A Maryland couple is suing a local real estate appraiser and an online mortgage provider after alleging that the housing appraisal they received was unfairly low due to their race, violating the Fair Housing Act.

best places to live

The Best Places To Live In America This Year 

Real Estate company Niche has released their fifth annual report of the Best Places to Live in America, which includes a number of different categories including the most affordable places in the nation to live. 

“The pandemic triggered a new set of possibilities—suddenly, many individuals and families found themselves more mobile than ever before, and in the past two years they have continued to think hard about where they really want to live,” says Luke Skurman, CEO and founder of Niche.

Niche creates their reports using data from reliable sources such as the US Census and other government agencies, in addition to citizen reviews and reports. When it comes time to put there report together, they look at factors such as affordability, diversity, local housing economies, and other integral factors that buyers would look at when it comes time to buy a home. 

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For the second year in a row, Niche reported that The Woodlands is the top place in America to live. Ryan Bell, the principal strategist at Niche, discussed why it’s been able to top the list two years in a row. 

“When you look at all the factors we chose for our best cities ranking, The Woodlands is extremely well-rounded. It had high scores in each category, including weather, overall affordability and the quality of its public schools.”

Niche’s best cities rankings also incorporate real ratings from people who live there, so the residents’ love and appreciation for their home certainly helped The Woodlands hang on to the number one spot for two years running,” says Bell.

Gil Staley, CEO of The Woodlands Area Economic Development Project, also spoke to the perks that The Woodlands has to offer leading to its top ranking on the list. 

“Our county, as a whole, is one of the fastest growing counties in the nation and our community has turned into a regional center for jobs,” Bell explained, adding that the highly ranked school districts in the county also make the Woodlands a desirable place to live. 

Niche listed Fort Wayne, Indiana as the most affordable place to live in the US, a title which it also earned in 2018, 2019, and 2021. 

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“To take the number one spot, Fort Wayne had to have strong performance in several factors we take into account for the lowest cost of living rankings. In particular, housing and rental affordability in comparison to incomes in the area, are Fort Wayne’s strongest factors for affordability this year,” says Bell. 

Forbes Magazine reported on why citizens in Fort Wayne also believe it’s such an amazing place to live: “Fort Wayne is a lovely place to visit and live. I’ve lived here for six years now and still haven’t seen everything. It’s family friendly and just friendly in general. It’s a small city compared to most, but there’s much to do. It’s full of history and rivers.”

The Top 10 Best Places to live in America according to Niche are ranked as follows: 

  1. The Woodlands, Texas
  2. Cambridge, Massachusetts
  3. Naperville, Illinois
  4. Arlington, Virginia
  5. Overland Park, Kansas
  6. Ann Arbor, Michigan
  7. Columbia, Maryland
  8. Berkeley, California
  9. Plano, Texas
  10. Irvine, California

For the rest of the rankings from Niche, check out their full report here.

sale

Real Estate Experts Say US Housing Market Is On Its Way To Recovery

Real estate industry economists are stating that the nation’s housing market is on a correction course with housing prices slowly moderating, and even declining, in some areas.

housing market

Home Sale Cancellations Seeing Highest Rates Since Start Of Pandemic

According to a new report by real estate brokerage company Redfin, 60,000 agreed home purchases fell through nationwide in June, which is equal to 14.9% of total homes that went under contract in the month.

That number is the highest since the COVID-19 pandemic began in March and April of 2020, where 17.6% and 16.4% of houses under contract fell through, respectively.

This month’s rate rose from 12.7% in May and 11.2% in 2021. “The slowdown in housing-market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” Redfin deputy chief economist Taylor Marr explained.

“Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process.”

Marr additionally noted that raised mortgage rates are playing a role in cancellations. “If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for a loan,” he said.

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The Federal Reserve previously raised its benchmark interest rates to 0.75% on June 15 in an effort to lower the now-9.1% inflation rate. With a possible recession on the horizon, it clearly impacted buyers who found themselves on the cusp of securing a property.

“When mortgage rates shot up to almost 6% in June, we saw a number of buyers back out of deals,” Miami Redfin mortgage agent Lindsay Garcia recounted, saying some buyers could no longer get a loan due to the rate jumps. “Buyers are also more skittish than usual due to economic uncertainty.”

Among the markets that saw the highest percentage of pull-outs during a pending sale include Las Vegas (27.2%) and several Florida cities like Lakeland (26.7%), Cape Coral (25.7%), Port St. Lucie (25.7%), and Jacksonville (25.3%).

Unlike Southwest metro areas, the Northeast saw a minimal loss of sales with Newark, New Jersey, Rochester, New York, Nassau County, New York, and Montgomery County, Pennsylvania all at or below 6%.

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As Fox News notes, homebuilders are also experiencing cancellations. A survey conducted by John Burns Real Estate Consulting (JBREC) in June found that cancellation rates of new builds flew up to 14.5%. That’s up from 10.4% this past May and 6.5% in June of 2021. Total home sales also fell by 31%.

The increased mortgage rates have also seen the average amount of home purchase loans diminish. The week ending on July 8 saw total mortgage application volume hit 1.7%, while the loan size fell to $415,000. Mortgage applications to buy a home fell by 4%.

However, 30-year fixed mortgage rates finally saw a win by cooling off to 5.3%, which Redfin reports is the largest one-week drop since 2008. That should give potential buyers an opening to save before rates increase again.

background check

Florida Landlord’s Required To Background Check Workers Under New ‘Miya’s Law’ 

Miya Marcano was a student in Orlando, Florida who was tragically killed by a maintenance worker in her apartment who was able to break in using his universal key fob.

In response to this horrendous crime, Governor Ron DeSantis signed Senate Bill 898 into law, nicknaming it “Miya’s Law,” which requires all prospective employees working in rentals to endure a background check before they’re hired. 

The new law requires all landlord’s to use a consumer reporting agency (online databases) to screen prospective employee’s criminal records and sex offender registries within all 50 states and the District of Colombia. 

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According to the law, a landlord can choose to disqualify an individual from employment if they have been convicted, found guilty, or plead guilty to certain criminal offenses.

These offenses include any crimes that disregarded the safety of others that would also be considered a felony or misdemeanor in the first degree in the state of Florida. 

Additionally, any criminal offense that involves violence, such as murder, battery, sexual assault, robbery, carjacking, stalking, or home invasion, are grounds for disqualification. 

Before landlord’s are able to request a background check, they must provide the prospective employee with a document that discloses the background check requirement and obtain their written consent.

This requirement is a part of the Fair Credit Reporting Act, which is used to regulate how background checks are conducted and used. 

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If the landlord receives information that would give them grounds to disqualify the individual from potential employment, they must provide a notice for the candidate and a copy of their background check. 

The prospective employee must be given a reasonable amount of time to review and potentially file a dispute regarding the accuracy or completeness of the background check, typically at least five business days.

Landlord’s must also provide the name, address, and telephone number of the background check vendor to the applicant with a statement that emphasizes “the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the applicant the specific reasons why the adverse action was taken, and notifies the candidate of their right to obtain a free copy of their background report within sixty days and to dispute any information reported in the background check,” according to the law. 

“By signing this legislation, we’re making it safer to live in a rental unit and giving renters more peace of mind in their homes. Miya’s death was a tragedy, and our prayers continue to be with the Marcano family.”

“I am proud to act on their behalf to help prevent a tragedy like that from happening to another Florida tenant,” said DeSantis in a statement.

Mortgage

US Housing Market Is Slowing Down, Inventory Is High And Prices Are Lowering

The US housing market has been on quite the roller coaster ride since the beginning of the Covid-19 pandemic. Now, experts are saying that the housing market may not be crashing, but it’s definitely slowing down in terms of sales, mortgage rates, and inventory.

Montana

Study Shows ‘Yellowstone’ Show Has Had Giant Impact On Montana Economy, Real Estate

While it might not be accurate of the lifestyles that have taken up residency in the breathtaking and boundless plains and mountains of Montana, “Yellowstone” certainly does put on quite a show for the millions of viewers its racked up since its debut back in 2018.

Now in its fourth season, “Yellowstone” takes a look at the Duttons, a family led by patriarch John (Kevin Costner) that has built up a ranching and cattle empire. While trying to maintain their long-held control, they also face opposition from property-hungry land developers and Native Americans attempting to take back what they feel is rightfully theirs.

All of it amounts to a show full of twists, turns, fights, backstabbings, and murders, topped off by the authentic scenery that manages to steal the scene in almost every shot. But while the storylines and characters may be fiction, the impact it’s having on its setting certainly isn’t.

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A study by the University of Montana dived into the economic impacts the show has had on Montana, where it’s shot on location. It found that Montana households received $25.3 million in annual personal income because of the production, which turns into $24.6 million after taxes.

Meanwhile, businesses and non-businesses received $85.8 million in annual gross receipts. The show, fronted by Paramount, ended up spending $72 million on production, and the study doesn’t take into account the value earned by businesses and homes on free advertising.

The idea of roughing it as a cowboy — or at least pretending to — has resonated with viewers, however. Speaking to CNBC, boutique investment firm Beartooth Group’s founder, Robert Keith, explained that there has been an increase in buyers looking to follow in the Dutton’s footsteps.

“We’ve had an influx of all sorts of wealthy individuals looking for ranches. They’re looking to own really amazing large properties.”

The intention behind the move isn’t exactly a secret, either. “Everyone who gets into my truck and wants to go out looking at ranches, they all bring up Kevin Costner and ‘Yellowstone’ within the first 15 minutes of the drive,” Hall and Hall realtor Bill ­McDavid told Town & Country Magazine.

From July 2020 to 2021, Montana saw a 1.6% population growth from 1,086,193 to 1,104,271. That makes it just one of a handful of states to see a growth of over 1%, despite it being the eighth-smallest state. Of course, the show isn’t the only reason for the uptick.

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The COVID-19 pandemic has been a driving force in the idea of Montana making a good home. The small overall population presented families with the idea of isolation during the peak of COVID cautiousness, giving them added protection.

With that growth, however, comes rising costs. According to Zillow’s Home Value Index (ZHVI), the average single household value sits at $476,000, up from $369,000 at the same time in 2021. The average also sits $78,000 higher than the national average.

Though the newcomers may be responsible for creating apparent culture clashes in neighborhoods and towns, it’s hard to fault those wanting for a change in scenery and a new life — as long as they have the pockets to pay for it.