October 28, 2009 8:36 pm
Washington (CNN) -- Senate leaders have reached a tentative deal to extend the first-time homebuyers' tax credit that was originally passed earlier this year as part of the stimulus bill, Republican and Democratic sources told CNN on Wednesday.
The agreement would extend and expand the credit to include current homeowners who want to move, according to the sources.
The original credit in the stimulus bill is set to expire at the end of November and offers a tax credit of $8,000 to first-time homebuyers.
Senate sources told CNN they have tentatively agreed to extend that $8,000 credit for first-time buyers until the end of April. In addition, they are adding a $6,500 credit for some current homeowners who buy a new residence by then.
To qualify, current homeowners must have lived in their primary residence for five continuous years.
Senators have not agreed on how the tentative deal would come up for a vote, but sources from both parties said they are considering adding the housing credit to a bill that would extend unemployment benefits.
House Speaker Nancy Pelosi has indicated she also is interested in extending the homeowner credit, but House leaders have yet to endorse any one bill.
Thursday, October 29, 2009
Wednesday, October 28, 2009
Neal Spelce Austin Letter
October 23, 2009
A recent national report says the recession in Austin ended in August. If true, what happened in 2009 through August could portend great things for the Austin area in the months and years ahead.
Moody’s Economy.com and MSNBC.com’s latest Adversity Index moved Austin from “recession” into “recovery,” indicating the data on jobs, manufacturing and housing grew from six months earlier. The Austin metro was not alone. Out of the nation’s 384 metro areas, 79 moved into the “recovery” stage. The report also noted that this initial recovery is going to be slow.
Three things have to happen before the current national recession can be declared ended and only one is underway, reports Dr. Mark Dotzour, chief economist for the Real Estate Center at TexasA&M. “I think the economy will begin to turn for the better once the health care and the cap-and-trade issues are settled,” says Dotzour. “Those two political debates are creating substantial uncertainty for business owners and investors.”
The second trend to watch is consumer spending, which is more than 70% of the US economy. Watch for when consumer spending starts to increase again. Increased corporate profits are the third trend and Dotzour says there is some indication that this has already begun.
Back to the Austin metro. During all of the hand-wringing over the national recession, Austin has remained resoundingly resilient – at least when compared to the rest of the nation. For instance, FORTUNE magazine recently named the Austin area as the nation’s 8th best place to start a small business. This is an important designation during economic down times, as entrepreneurship spikes dramatically during tough times.
This recent designation triggered a thought. It seems throughout the economic distress of 2009, the Austin metro has been uniquely singled out time and time again for accolades compared to the rest of the nation’s major metros.
As a result, we’re devoting the remainder of this edition to list some, not all, of the national recognitions accorded Austin through August 2009. It’s quite an impressive list.
If it seems to you that we frequently report on the “best this” or “best that” rankings in which Austin is among the nation’s leaders, well, that’s accurate. And it’s significant in its scope.
It is amazing the number of mentions the Austin area has received just this year. For the record, here’s an extensive list for your edification, starting in January 2009.
Austin named one of America’s 25 Strongest Housing Markets. Forbes worked with Moody’s Economy.com to compile a list of the country’s real estate markets that are nearest to recovery. 1/7/09.
Austin named one of 15 Coolest North American cities. MSN Travel cited Tex-Mex food, music, the state capitol and “its laid-back atmosphere.” 1/22/09.
Austin named one of America’s Top 30 Most Wired Cities. Since 2007, Forbes has measured cities’ wired quotient by computing the percentage of Internet users with high-speed connections and the number of companies providing high-speed Internet. 1/22/09.
Austin named #2 Healthiest Housing Market for 2009. Builderonline.com selected markets with the best and least potential based on population trends and job growth -- perennial drivers of housing demand and other key factors. 2/17/09.
Austin 10th Best City for Moviemakers. MovieMaker magazine says Austin is once again one of the cities that offer moviemakers the best all-around chance for finding success during these tough economic times. 2/18/09.
Austin-Bergstrom International among Top Performing Airports. Airports Council International ranked Austin’s airport 3rd in North America. 3/10/09.
Austin & Raleigh are Fastest-Growing Metro Areas. The US Census Bureau named these as the top two metros for growth between 2007 and 2008. 3/19/09.
Austin among top 20 Best Places for Business and Careers. Forbes looked at 200 largest metro areas based on 11 different criteria. 3/25/09.
Austin comes in 2nd in Top Ten Cities where Americans are Relocating. Another ranking by Forbes. 3/30/09.
Austin named #1 Big City for Jobs. “Understanding what makes this attractive, fast-growing city tick can tell us much about what urban growth will look like in the coming decades.” Forbes, 4/12/09; also New Geography, 4/15/09.
This isn’t all. There’s much more. See the next item.
The top national rankings for the Austin area continued throughout 2009. Here’s more.
Austin is a City of the Future. fDi Magazine ranked Austin #5 – behind New York, Chicago, Houston & San Francisco – using seven categories. April/May 09.
Austin Named One of the Ten Best Cities of 2009. Austin ranks #8 on Kiplinger’s Personal Finance’s Ten Best Cities of 2009. 5/09.
Austin Best Bargain City in the US. Forbes looked at the country’s 50 largest metros and Austin earned high marks across the board. 5/09.
Austin Chosen as one of Top 20 Places to Thrive. BestBoomerTowns.com picked Austin as one of its top places in the US to thrive in retirement. 5/7/09.
Austin #7 Tech Center. Austin ranks #7 on bizjournal.com’s list of the nation’s biggest tech cities. 5/11/09.
Austin ranked 11th Best City for the Outdoors. Forbes used data from the Trust for Public Land, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration to compile is list of 40 cities. 5/12/09.
Austin the Nation’s Best City for a Fresh Start. According to Relocation.com, Austin is the best city to start over and seek new economic opportunities. 5/21/09.
Austin Ranks 9th on American Fitness Index. The American College of Sports Medicine compiled this ranking of the nation’s 50 largest metros. 5/26/09.
Austin Projected to be among 5 Fastest Growing Metros. Bizjournals.com projected populations for nation’s 250 largest metros out to 2025. 6/1/09.
Austin Ranked in Top 20 High Tech Metro Area. In research by the Milken Institute, Austin was #20 while San Jose and Seattle were #1 and #2. 6/2/09.
Austin one of Ten Best Places to Live. USNews&WorldReport ranked affordable communities with strong economies and fun things to do. 6/8/09.
Austin Ranked Best City for Recession Recovery. Forbes picked Austin as the best in its Top Ten Cities poised for a rebound. 6/10/09.
Austin is the 3rd Strongest US Metro Economy. The Brookings Institution kicked off a quarterly monitoring effort by naming Austin #3. 6/16/09.
Is there another metro in the country with all these designations? Not likely.
Accolades for Austin continued throughout the downturn of 2009.
Austin tapped as the nation’s 2nd most affordable city. Forbes calculated the average Austin family budget was 72% of median family income. 6/29/09.
Austin near the top for Most Job Postings Per Capita. USNews&WorldReport named Austin as 4th healthiest big-city job market in the US. 7/10/09.
Austin is the #3 Best City for High-Paying Jobs. Forbes based this list on trends in “business and professional services” as the fastest growing sector in the high wage economy. 7/14/09.
Austin a Top Ten Start-Up City. Entrepreneur magazine ranked Austin among 10 cities that embody the entrepreneurial spirit. 8/09.
Austin #2 Best City For Working Moms. ForbesWoman’s first-ever list of the “Best Cities for Working Mothers” ranks Austin 2nd, just behind New York City in a study that examined the 50 largest US cities. 8/4/09.
Austin named the Top City for Your Career. SalesHQ.com put Austin at the top of this list because of its robust projected growth and one of the lowest changes in unemployment rate since the onset of the recession. 8/25/09.
This is not a complete summary of all the national “Top” rankings for the Austin metro through August 2009. And it doesn’t include a number of rankings for the state of Texas that significantly reinforce Austin’s position because of Austin’s role as an economic leader in the state. But taken in its totality, you can see why we suggested that – if these accolades came Austin’s way during the downturn, and the metro has now been labeled as moving from “recession” to “recovery” -- great things could be on the horizon.
A recent national report says the recession in Austin ended in August. If true, what happened in 2009 through August could portend great things for the Austin area in the months and years ahead.
Moody’s Economy.com and MSNBC.com’s latest Adversity Index moved Austin from “recession” into “recovery,” indicating the data on jobs, manufacturing and housing grew from six months earlier. The Austin metro was not alone. Out of the nation’s 384 metro areas, 79 moved into the “recovery” stage. The report also noted that this initial recovery is going to be slow.
Three things have to happen before the current national recession can be declared ended and only one is underway, reports Dr. Mark Dotzour, chief economist for the Real Estate Center at TexasA&M. “I think the economy will begin to turn for the better once the health care and the cap-and-trade issues are settled,” says Dotzour. “Those two political debates are creating substantial uncertainty for business owners and investors.”
The second trend to watch is consumer spending, which is more than 70% of the US economy. Watch for when consumer spending starts to increase again. Increased corporate profits are the third trend and Dotzour says there is some indication that this has already begun.
Back to the Austin metro. During all of the hand-wringing over the national recession, Austin has remained resoundingly resilient – at least when compared to the rest of the nation. For instance, FORTUNE magazine recently named the Austin area as the nation’s 8th best place to start a small business. This is an important designation during economic down times, as entrepreneurship spikes dramatically during tough times.
This recent designation triggered a thought. It seems throughout the economic distress of 2009, the Austin metro has been uniquely singled out time and time again for accolades compared to the rest of the nation’s major metros.
As a result, we’re devoting the remainder of this edition to list some, not all, of the national recognitions accorded Austin through August 2009. It’s quite an impressive list.
If it seems to you that we frequently report on the “best this” or “best that” rankings in which Austin is among the nation’s leaders, well, that’s accurate. And it’s significant in its scope.
It is amazing the number of mentions the Austin area has received just this year. For the record, here’s an extensive list for your edification, starting in January 2009.
Austin named one of America’s 25 Strongest Housing Markets. Forbes worked with Moody’s Economy.com to compile a list of the country’s real estate markets that are nearest to recovery. 1/7/09.
Austin named one of 15 Coolest North American cities. MSN Travel cited Tex-Mex food, music, the state capitol and “its laid-back atmosphere.” 1/22/09.
Austin named one of America’s Top 30 Most Wired Cities. Since 2007, Forbes has measured cities’ wired quotient by computing the percentage of Internet users with high-speed connections and the number of companies providing high-speed Internet. 1/22/09.
Austin named #2 Healthiest Housing Market for 2009. Builderonline.com selected markets with the best and least potential based on population trends and job growth -- perennial drivers of housing demand and other key factors. 2/17/09.
Austin 10th Best City for Moviemakers. MovieMaker magazine says Austin is once again one of the cities that offer moviemakers the best all-around chance for finding success during these tough economic times. 2/18/09.
Austin-Bergstrom International among Top Performing Airports. Airports Council International ranked Austin’s airport 3rd in North America. 3/10/09.
Austin & Raleigh are Fastest-Growing Metro Areas. The US Census Bureau named these as the top two metros for growth between 2007 and 2008. 3/19/09.
Austin among top 20 Best Places for Business and Careers. Forbes looked at 200 largest metro areas based on 11 different criteria. 3/25/09.
Austin comes in 2nd in Top Ten Cities where Americans are Relocating. Another ranking by Forbes. 3/30/09.
Austin named #1 Big City for Jobs. “Understanding what makes this attractive, fast-growing city tick can tell us much about what urban growth will look like in the coming decades.” Forbes, 4/12/09; also New Geography, 4/15/09.
This isn’t all. There’s much more. See the next item.
The top national rankings for the Austin area continued throughout 2009. Here’s more.
Austin is a City of the Future. fDi Magazine ranked Austin #5 – behind New York, Chicago, Houston & San Francisco – using seven categories. April/May 09.
Austin Named One of the Ten Best Cities of 2009. Austin ranks #8 on Kiplinger’s Personal Finance’s Ten Best Cities of 2009. 5/09.
Austin Best Bargain City in the US. Forbes looked at the country’s 50 largest metros and Austin earned high marks across the board. 5/09.
Austin Chosen as one of Top 20 Places to Thrive. BestBoomerTowns.com picked Austin as one of its top places in the US to thrive in retirement. 5/7/09.
Austin #7 Tech Center. Austin ranks #7 on bizjournal.com’s list of the nation’s biggest tech cities. 5/11/09.
Austin ranked 11th Best City for the Outdoors. Forbes used data from the Trust for Public Land, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration to compile is list of 40 cities. 5/12/09.
Austin the Nation’s Best City for a Fresh Start. According to Relocation.com, Austin is the best city to start over and seek new economic opportunities. 5/21/09.
Austin Ranks 9th on American Fitness Index. The American College of Sports Medicine compiled this ranking of the nation’s 50 largest metros. 5/26/09.
Austin Projected to be among 5 Fastest Growing Metros. Bizjournals.com projected populations for nation’s 250 largest metros out to 2025. 6/1/09.
Austin Ranked in Top 20 High Tech Metro Area. In research by the Milken Institute, Austin was #20 while San Jose and Seattle were #1 and #2. 6/2/09.
Austin one of Ten Best Places to Live. USNews&WorldReport ranked affordable communities with strong economies and fun things to do. 6/8/09.
Austin Ranked Best City for Recession Recovery. Forbes picked Austin as the best in its Top Ten Cities poised for a rebound. 6/10/09.
Austin is the 3rd Strongest US Metro Economy. The Brookings Institution kicked off a quarterly monitoring effort by naming Austin #3. 6/16/09.
Is there another metro in the country with all these designations? Not likely.
Accolades for Austin continued throughout the downturn of 2009.
Austin tapped as the nation’s 2nd most affordable city. Forbes calculated the average Austin family budget was 72% of median family income. 6/29/09.
Austin near the top for Most Job Postings Per Capita. USNews&WorldReport named Austin as 4th healthiest big-city job market in the US. 7/10/09.
Austin is the #3 Best City for High-Paying Jobs. Forbes based this list on trends in “business and professional services” as the fastest growing sector in the high wage economy. 7/14/09.
Austin a Top Ten Start-Up City. Entrepreneur magazine ranked Austin among 10 cities that embody the entrepreneurial spirit. 8/09.
Austin #2 Best City For Working Moms. ForbesWoman’s first-ever list of the “Best Cities for Working Mothers” ranks Austin 2nd, just behind New York City in a study that examined the 50 largest US cities. 8/4/09.
Austin named the Top City for Your Career. SalesHQ.com put Austin at the top of this list because of its robust projected growth and one of the lowest changes in unemployment rate since the onset of the recession. 8/25/09.
This is not a complete summary of all the national “Top” rankings for the Austin metro through August 2009. And it doesn’t include a number of rankings for the state of Texas that significantly reinforce Austin’s position because of Austin’s role as an economic leader in the state. But taken in its totality, you can see why we suggested that – if these accolades came Austin’s way during the downturn, and the metro has now been labeled as moving from “recession” to “recovery” -- great things could be on the horizon.
Big Rebound in Existing Home Sales
Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.
Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.
Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.
NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”
Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.
Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.
Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.
Here’s the region-by-region picture:
Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
Source: NAR
Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.
Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.
NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”
Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.
Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.
Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.
Here’s the region-by-region picture:
Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
Source: NAR
NAR: Housing Tax Credit is Working
Consumers are just starting to see the first glimmers of a bright future for the housing market and the overall economy. It’s up to Congress to make that glimmer a reality by building on the momentum created by the $8,000 home buyer tax credit. That's what National Association of REALTORS® First Vice President Ron Phipps, told the Senate Banking, Housing and Urban Affairs Committee Tuesday during a hearing on “The State of the Nation’s Housing Market.”
One of the key ways to do that is for Congress to extend the home buyer tax credit, “The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,” Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy.
“But it is a fragile recovery, and now is the time to build on home sales momentum by extending the tax credit throughout 2010 and expanding it to all home buyers,” he said. The present credit, due to expire on November 30, cannot help new purchasers now who write a contract today—they won’t be able to close before the deadline, and will lose out on the credit, said Phipps. “Without congressional action now, the market and our national economy may freeze again—possibly as soon as this month.”
Make Loan Limits Permanent
Phipps called upon Congress to take action on a number of additional fronts to strengthen the recovery. First, make the FHA and Fannie Mae/Freddie Mac loan limits permanent; these are set to expire on December 31. “Maintaining current loan limits would ensure that families have access to low-cost financing to purchase homes and can refinance problematic loans into safer, more affordable mortgages,” Phipps said.
Secondary Mortgage Markets
In addition, Congress should continue the federal government's involvement in the secondary mortgage market. “Without the government’s involvement in the secondary mortgage market, market participants will have no incentive to reach out to lower-income, creditworthy consumers. We must ensure that the housing market works in all markets and at all times, and that mortgage capital is provided to all potential and qualified purchasers in a way that promotes sustainable homeownership,” said Phipps.
—NAR
One of the key ways to do that is for Congress to extend the home buyer tax credit, “The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,” Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy.
“But it is a fragile recovery, and now is the time to build on home sales momentum by extending the tax credit throughout 2010 and expanding it to all home buyers,” he said. The present credit, due to expire on November 30, cannot help new purchasers now who write a contract today—they won’t be able to close before the deadline, and will lose out on the credit, said Phipps. “Without congressional action now, the market and our national economy may freeze again—possibly as soon as this month.”
Make Loan Limits Permanent
Phipps called upon Congress to take action on a number of additional fronts to strengthen the recovery. First, make the FHA and Fannie Mae/Freddie Mac loan limits permanent; these are set to expire on December 31. “Maintaining current loan limits would ensure that families have access to low-cost financing to purchase homes and can refinance problematic loans into safer, more affordable mortgages,” Phipps said.
Secondary Mortgage Markets
In addition, Congress should continue the federal government's involvement in the secondary mortgage market. “Without the government’s involvement in the secondary mortgage market, market participants will have no incentive to reach out to lower-income, creditworthy consumers. We must ensure that the housing market works in all markets and at all times, and that mortgage capital is provided to all potential and qualified purchasers in a way that promotes sustainable homeownership,” said Phipps.
—NAR
Feds Call Housing Upturn a Good Sign
The Federal Reserve's “Beige Book” report, released Wednesday, points to housing as a bright spot in the economic landscape and applauds banks that lent to first-time homebuyers.
It calls commercial real estate a consistently weak sector, weighed down by business closures and the difficulty in refinancing.
In a separate report Wednesday, the U.S. Labor Department said the number of jobs fell in 43 states and the District of Columbia, with the unemployment rate rising in 23 states.
Industries with the strongest economic gains were residential real estate and manufacturing.
Source: Washington Post, Neil Irwin (10/22/2009)
It calls commercial real estate a consistently weak sector, weighed down by business closures and the difficulty in refinancing.
In a separate report Wednesday, the U.S. Labor Department said the number of jobs fell in 43 states and the District of Columbia, with the unemployment rate rising in 23 states.
Industries with the strongest economic gains were residential real estate and manufacturing.
Source: Washington Post, Neil Irwin (10/22/2009)
Housing Starts Rise
Housing starts rose 0.5 percent in September compared to August to an annual rate of 590,000, according to a report released Tuesday by the U.S. Commerce Department. Single-family home construction, which accounts for 85 percent of the market, increased 3.9 percent to a 501,000 annual rate. Multi-family housing fell 15 percent to an 89,000 rate. Building permits, an indicator of future construction, declined 1.2 percent from the August rate to a 573,000 annual rate in September. Most of the gain in single-family starts was attributable to a 7.1 percent increase in the South. The other regions fell with the West declining 8.8 percent.
Source: Bloomberg News, Courtney Schlisserman (10/20/2009)
Source: Bloomberg News, Courtney Schlisserman (10/20/2009)
Subscribe to:
Posts (Atom)
.jpg){kind=logo}
