Governor Brown Signs C.A.R.’s PACE Loans Bill
Governor Brown has signed C.A.R.’s Property Assessed Clean Energy (PACE) loans bill. Existing law requires home loans to be accompanied by the Truth in Lending RESPA Integrated Disclosure (TRID), which is intended to allow an “apples to apple” comparison shopping of various loan products. However, PACE transactions are technically not loans and are not required to be accompanied by a TRID disclosure. Current law gives delinquent PACE assessments “super-priority” status, as part of the tax bill, over other recorded obligations; lenders require these “super liens” to be paid off before any new financing can be obtained. This measure will required a TRID-like disclosure be provided to a property owner participating in a PACE program, a three-day right of rescission, and a notice that the property owner may not be able to refinance or sell without paying off the PACE “loan.”

Home Price Gains Slow in July
S&P Dow Jones Indices’ latest results for the S&P CoreLogic Case-Shiller Indices for July 2016 show that home prices continued their rise across the country over the last 12 months.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.1 percent annual gain in July, up from 5 percent last month. The 10-City Composite posted a 4.2 percent annual increase, down from 4.3 percent the previous month. The 20-City Composite reported a year-over-year gain of 5 percent, down from 5.1 percent in June. 

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.7 percent in July. The 10-City Composite recorded a 0.5 percent month-over-month increase while the 20-City Composite posted a 0.6 percent increase in July. After seasonal adjustment, the National Index recorded a 0.4 percent month-over- month increase, the 10-City Composite posted a 0.1 percent decrease, and the 20-City Composite remains unchanged.

Consumer Confidence Index Improved in September
The Conference Board Consumer Confidence Index, which had increased in August, improved further in September. The Index now stands at 104.1 (1985=100), up from 101.8 in August. The Present Situation Index rose from 125.3 to 128.5, while the Expectations Index improved from 86.1 last month to 87.8.

Consumers’ assessment of current conditions improved in September. Those stating business conditions are “good” decreased from 30.3 percent to 27.4 percent. However, those saying business conditions are “bad” declined from 18.2 percent to 16.2 percent. Consumers’ appraisal of the labor market was more positive than last month. Those stating jobs were “plentiful” increased from 26.8 percent to 27.9 percent, while those claiming jobs are “hard to get” declined from 22.8 percent to 21.6 percent.

New Home Sales Rise in August
Sales of new single-family houses in August 2016 were at a seasonally adjusted annual rate of 609,000, according to estimates released jointly by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau. This is 7.6 percent below the revised July rate of 659,000, but is 20.6 percent above the August 2015 estimate of 505,000.

The median sales price of new houses sold in August 2016 was $284,000; the average sales price was $353,600. The seasonally adjusted estimate of new houses for sale at the end of August was 235,000. This represents a supply of 4.6 months at the current sales rate.

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Homeowners Embrace Smart Technology When Renovating Homes
Renovating homeowners are integrating “smart” features into their homes, according to the 2016 U.S. Houzz Smart Home Trends Survey, conducted in collaboration with CEDIA. The survey of nearly 1,000 homeowners in the midst of, planning, or who have recently completed a home renovation project found that nearly half of renovating homeowners are incorporating “smart” technology: systems or devices that can be monitored or controlled via smartphone, tablet or computer (45 percent). In fact, renovated homes are more than twice as likely to include a smart system or device than before the renovation (51 versus 20 percent, respectively). Nearly a third of upgraded smart home systems or devices can be controlled via a central hub (30 percent), and a quarter include voice-controlled features (26 percent). Homeowners report greater levels of satisfaction with their upgraded smart features than their non-smart features.
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SFAOR Wins Ellis Act Case on 10-year Waiting Period
The San Francisco Association of REALTORS® won a case earlier this week when it challenged an ordinance by the City of San Francisco that requires property owners to wait 10 years before merging multiple units into one unit, if the owner had previously exercised the right under the Ellis Act to exit the residential rental business.

The Ellis Act is a California statute that, among other things, protects property owners’ rights to exit the residential rental business and prohibits local government entities from forcing an owner to continue to offer a residential property for rent. 

The court found that the San Francisco ordinance penalized property owners for attempting to exit the residential rental business and that the Ellis Act overrides this local ordinance.

This is an important ruling for REALTORS® because it impacts a REALTOR®’s ability to sell property where an owner has previously exercised the right under the Ellis Act to exit the residential real estate business.
 

Building Permits Rise, Housing Starts Fall in August
Building permits for single-family homes rose 3.7 percent to a rate of 737,000 in August, while housing starts for single-family homes declined 6 percent to a rate of 722,000, according to a joint announcement by the U.S. Census Bureau and the Dept. of Housing and Urban Development.
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Economic Growth on the Upswing
Economic growth is poised to accelerate to 2.6 percent in the second half of the year, a rebound from the lackluster growth of 1 percent in the first half of 2016, according to Fannie Mae’s Economic & Strategic Research (ESR) Group’s September 2016 Economic and Housing Outlook. The ESR Group’s full-year 2016 forecast remains at 1.8 percent, consistent with their prior forecast. Consumer and government spending are expected to drive growth despite a cooldown in consumer activity so far in the third quarter. At the same time, inventory investment and net exports are likely to drag on growth and nonresidential and residential investment are expected to be neutral for the year.
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Builder Confidence Surges in September
Builder confidence in the market for newly built, single-family homes in September jumped six points to 65 from a downwardly revised August reading of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This marks the highest HMI level since October 2015.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components moved higher in September. The component measuring current sales expectations rose six points to 71 and the gauge charting sales expectations in the next six months increased five points to also stand at 71. The index measuring traffic of prospective buyers posted a four-point gain to 48.

The three-month moving averages for HMI scores posted gains in three out of the four regions. The Northeast and South each registered a one-point gain to 42 and 64, respectively, while the West rose four points to 73. The Midwest was unchanged at 55.
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U.S. Home Inventory Falls for Fifth Straight Quarter
Trulia released a report that finds inventory falling for the fifth straight quarter, pushing home affordability further out of reach for more Americans. Meanwhile, in some markets across the country, inventory show signs of picking up.

Nationally, housing inventory continues to decline. This summer, the number of homes on the market dropped for the fifth straight quarter, extending a slump and dropping 6.7 percent over the past year. The number of starter and trade-up homes on the market nationwide has dropped 10.7 percent and 9.2 pecent, respectively. Meanwhile, premium home inventory dropped just 3.2 percent over the past year. The persistent and disproportional drop in starter and trade-up home inventory is pushing affordability further out of reach for homebuyers. Starter and trade-up homebuyers need to spend 1.7 percent and 0.9 percent more of their income than this time last year, whereas premium homebuyers only need to shell out 0.6% more of their income.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Get ready for your close up!
C.A.R. is redesigning our website, car.org, and will be featuring some of our members.

Apply by Sept. 20 for a chance to be part of the official photoshoot and for an opportunity to be featured on the new site. Sorry, applications received after this date will not be considered.

The photo shoots will take place in San Francisco and Los Angeles. You should be able to travel to these locations and provide your own transportation. Before you apply, please make sure you’re available for the dates and locations below:
San Francisco: October 12
Los Angeles: October 14

We’d love to use every single REALTOR® who applies, but we’ve only got one website. Applicants will be selected at random and if you’re selected, you will be contacted with more details.

Apply today

TOP 3 STRATEGIES OF MILLIONAIRE AGENTS No charge 3 hour Bootcamp gives real estate agents the key strategies that separate the winners from the also-rans. Only serious agents determined to achieve massive business growth should >> MORE

Home Prices Up 6 Percent in July
CoreLogic released its CoreLogic Home Price Index (HPI) and HPI Forecast for July which shows home prices are up both year over year and month over month.

Home prices nationwide, including distressed sales, increased 6 percent year over year in July 2016 compared with July 2015 and increased 1.1 percent month over month in July 2016 compared with June 2016, according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices will increase 5.4 percent on a year-over-year basis from July 2016 to July 2017, and on a month-over-month basis home prices are expected to increase 0.4 percent from July 2016 to August 2016.
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Real Estate’s Public Image Surges
Americans are rating the real estate industry much more favorably, according to a new Gallup poll of more than 1,000 Americans. Forty-four percent of Americans now view the industry positively and 21 percent view it negatively, according to Gallup. That boosts real estate to a plus-23 rating, which is up from a minus-40 following the housing crash in 2008.

This year, restaurateurs and computer makers topped Gallup’s list of 25 industries, but real estate is showing a significant improvement in its public image, the survey showed. Gallup noted that other recent surveys that have shown many Americans now view real estate as the best long-term investment are helping to buoy the sector’s favorability.
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The Economist Letter to Editor
C.A.R. President Pat “Ziggy” Zicarelli recently submitted a Letter to the Editor of The Economist to rebut an article arguing that the U.S. hasn’t done enough to reform Fannie Mae and Freddie Mac and that the GSEs should play by the same rules as banks. Zicarelli writes, “You argued that America has in effect nationalised its housing market (“Comradely capitalism,” August 20). But the government has been supporting home financing and incentives for the past 80 years, whether through the mortgage-interest deduction or programmes that ensure affordable mortgage capital. Washington’s inability to press forward with reform has caused uncertainty and restricted credit for homebuyers.
Read the full letter

Home Appraisals Continue to Fall Below Owner Perceptions
Quicken Loans announced appraisals across the country were an average of 1.56 percent lower than what refinancing homeowners expected in August, according the company’s national Home Price Perception Index (HPPI).

The Quicken Loans Home Value Index (HVI), which measures home value changes exclusively through appraisals, moved higher yet in August. Home values increased 1.73 percent over the previous month, while jumping 8.13 percent higher than August 2015, according to the national HVI.
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Affordability Concerns Ensnaring Renters
Lofty home-price growth and tight supply are leading to softening confidence among renters about whether it’s a good time to buy a home, according to the latest installment of the NATIONAL ASSOCIATION OF REALTORS® Housing Opportunities and Market Experience (HOME) survey. The survey also found that a misconception about how much of a down payment is needed to buy could be unnecessarily delaying some qualified young adults from entering the market.

Heading into the autumn months, the share of homeowners and renters who believe now is a good time to buy remains at a solid majority but has crept downward since the beginning of this year. Seventy-eight percent of homeowners (80 percent in June; 82 percent in March) and 60 percent of renters (62 percent in the previous two quarters) said it’s a good time to buy. In the inaugural HOME survey in December 2015, 68 percent of renters said it was a good time to buy.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

California Supreme Court to Hear Dual Agency Case
The California Supreme Court today heard oral arguments in a case, Horiike v. Coldwell Banker, that is being closely followed by the real estate industry, including C.A.R.

“At its core, the Horiike case is an issue of a buyer not reading all of the information that was presented to him, but Horiike is trying to turn a normal disclosure case into an agency case,” said C.A.R. President Pat “Ziggy” Zicarelli. “Some groups may believe that dual agency should be outlawed and want to use this case for that premise or as a stepping stone to that end.”

In the case, a homebuyer, Hiroshi Horiike purchased a mansion in Malibu, Calif., and worked with a Beverly Hills, Coldwell Banker real estate licensee. The property was listed by a Coldwell Banker licensee in another office. Horiike complained he was misled about the property’s square footage. The issue is complex, however.  The City of Malibu includes some outdoor living areas in determining square footage, which impacts whether the property may be expanded. Most square footage measurements do not include outdoor living areas in square footage. These facts were fully disclosed, but apparently the buyer never read the information. Horiike sued the seller’s licensee, Chris Cortazzo, stating that Cortazzo and Coldwell Banker breached their fiduciary duty and failed to advise him to hire a third party to verify the actual square footage.  He did not sue the Beverly Hills licensee with whom he was working.
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Homeownership Still Possible in Many Big U.S. Cities for Working Class
Home buyers in cities across the U.S. are saying affordability is their biggest concern as home prices rise and inventory shrinks. But there is some good news for working-class home buyers. Across 40 large U.S. cities, 55 percent of homes for sale last month were affordable for a working-class household and still between two and four bedrooms in size, according to Redfin. Homes of this size matter because affording a home that’s big enough to comfortably fit a family is more difficult than affording a studio or a one-bedroom condo.

In 25 major U.S. cities, more than half the listings were affordable last month. Detroit was the most affordable U.S. city for a working-class household. Almost 97 percent of Detroit’s listings were big enough and affordable on a working-class household income. More than 80 percent of homes were affordable to working-class households in Cleveland, Baltimore, Columbus, Memphis and Philadelphia. But in San Francisco, the least affordable city, just 3 percent of these homes were priced within reach of a working-class household.
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Home Purchase Sentiment Down in August
Fannie Mae’s August 2016 Home Purchase Sentiment Index (HPSI) decreased 1.5 points in August to 85, after an all-time high in July. Overall, the HPSI is up 4.2 points since this time last year.

Highlights from the Index include:

• Increasing for the third consecutive month, the net share of Americans who say it is a good time to buy a house rose by 1 percentage point to 34 percent.
• The net percentage of those who say it is a good time to sell fell 5 percentage points from an all-time high in July to 15 percent.
• The net share of Americans who say that home prices will go up fell 6 percentage points from last month to 35 percent.
• The net share of those who say mortgage rates will go down over the next year fell 2 percentage points to -38 percent, after increasing for the past three months.

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New Reminder Added When Accessing zipForm®
Starting tomorrow, when accessing zipForm® via a desktop computer, members will see a new interstitial page informing users that zipForm® is an NAR and C.A.R. member benefit. After 5 seconds, a yellow button will appear that will allow users to continue to zipForm®.

Buyers Feel Discouraged by the Housing Market
Homeowners are feeling increasingly confident that now is a good time to sell a home, but renters are feeling uncertain they'll be able to afford to buy, according to the latest Zillow Housing Confidence Index.

Existing homeowners have a more positive attitude toward selling than buying, an imbalance that is causing a slowdown in many markets, especially in the more expensive, urban cores. Less than 65 percent of homeowners surveyed said now is a good time to buy, a number that's been declining for the past two years.

Just 38 percent of renters surveyed said now is a good time to buy a home and about 50 percent of renters in San Francisco and New York expressed a lack of confidence in their ability to afford a home in the future. Almost half of the renters surveyed in Seattle, San Jose, and Boston had similar feelings.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

June Home Price Gains Concentrated in South and West
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.1 percent annual gain in June, unchanged from last month. The 10-City Composite posted a 4.3 percent annual increase, down from 4.4 percent the previous month. The 20-City Composite reported a year-over-year gain of 5.1 percent, down from 5.3 percent in May.

Before seasonal adjustment, the National Index posted a month-over-month gain of 1 percent while both the 10-City Composite and the 20-City Composite posted a 0.8 percent increase in June. After seasonal adjustment, the National Index recorded a 0.2 percent month-over-month increase, and both the 10-City Composite and 20-City Composite posted 0.1 percent month-over-month decreases. After seasonal adjustment, nine cities saw prices rise, two cities were unchanged, and nine cities experienced
negative monthly prices changes.
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Consumer Confidence Improved in August
The Conference Board Consumer Confidence Index, which had decreased slightly in July, increased in August. The Index now stands at 101.1 (1985=100), compared to 96.7 in July. The Present Situation Index rose from 118.8 to 123, while the Expectations Index improved from 82 last month to 86.4.

Consumers’ appraisal of current conditions improved in August. Those stating business conditions are “good” increased from 27.3 percent to 30 percent, while those saying business conditions are “bad” remained virtually unchanged at 18.4 percent. Consumers’ assessment of the labor market was also more favorable. Those claiming jobs were more “plentiful” increased from 23 percent to 26 percent, however, those claiming jobs are “hard to get” also rose, from 22.1 percent to 23.4 percent.
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Average Fixer-Upper Home Lists for 8 Percent Discount
While a fixer-upper home may have an appealing price tag, the discount might not cover basic renovation costs, according to a new Zillow Digs analysis. Fixer-upper homes list for just 8 percent less than market value, which for the median fixer-upper would save buyers only $11,000 for renovations.

Zillow Digs analyzed nearly 70,000 listings for fixer-uppers from around the country to see how their list prices compared to their estimated values. If renovation costs exceed the home's discount, then it may be more cost-effective to buy a similar home that doesn't require renovations. Fixer-uppers were identified based on listing description keywords that signaled the home needs work, like "TLC," "good bones," and "fixer-upper."

Of all the metros analyzed, fixer-uppers in Phoenix have the smallest cash discount ($1,000 less than market value) and in turn give buyers the least financial leeway for renovations. Fixer-uppers in Atlanta and Miami also list very close to market value, saving buyers minimal cash up front.

While no two fixer-uppers are alike, buyers are more likely to find large upfront cash savings on fixer-uppers in expensive markets, where just a small percentage discount could yield quite a bit of money to spend on renovations. For example, fixer-uppers in San Francisco are discounted only 10 percent, which is lower than other metros, but still gives buyers $54,000 in upfront savings for renovations on the median home. Other metros with high cash savings include San Jose ($38,000) and Seattle ($24,000).
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New Streamlined Refinance Offering for High LTV Borrowers
The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac, at FHFA's direction, will implement a new refinance offering aimed at borrowers with high loan-to-value (LTV) ratios.  The new refinance offering will provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance through traditional programs because their LTV ratio exceeds the Enterprises' maximum limits.

To qualify for the new offering, borrowers: (1) must not have missed any mortgage payments in the previous six months; (2) must not have missed more than one payment in the previous 12 months; (3) must have a source of income; and (4) must receive a benefit from the refinance such as a reduction in their monthly mortgage payment.  Full details will be available in the coming months through the Enterprises, but the offering will make use of the lessons learned from the Home Affordable Refinance Program (HARP) and its streamlined approach to refinancing.

The new high LTV streamlined refinance offering is more targeted than HARP but as with HARP, eligible borrowers are not subject to a minimum credit score, there is no maximum debt-to-income ratio or maximum LTV, and an appraisal often will not be required.  However, unlike HARP, there are no eligibility cut-off dates connected with the new offering, and borrowers will be able to use it more than once to refinance their mortgage.  Borrowers with existing HARP loans are not eligible for the new offering unless they have refinanced out of HARP using one of the Enterprises traditional refinance products.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Baby Boomers Gaining Optimism in Housing
Baby boomers have typically held the most pessimistic view on housing among all age groups, but their opinions are changing. Sixty percent of baby boomers now view the housing market favorably, a 6 percentage point increase from the spring, according to a Berkshire Hathaway HomeServices' Homeowner Sentiment Survey. Seventy-two percent of that group say low interest rates are the primary reason behind their increased optimism.

Among all home owners, 66 percent view the housing market favorably, a 5 percentage point jump from the spring and the highest level in more than a year.

Millennials remain the most optimistic generation when it comes to the housing market. Seventy-six percent of those ages 18 to 34 say they view housing favorably, up 17 percentage points from November 2015. Eighty-five percent say that owning a home is a crucial part of the American Dream.
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California Pending Home Sales Post Fourth Straight Annual Increase in July
Led by the Southern California region, California statewide pending home sales continued to build momentum in July, posting an increase from both the previous month and year, C.A.R. said this week.

Statewide pending home sales rose in July on a seasonally adjusted annualized basis, with the Pending Home Sales Index (PHSI) increasing 3.5 percent from 118.4 in July 2015 to 122.5 in July 2016, based on signed contracts. Pending sales have been on a rising trend for the past couple of months, which should translate into an increase in closed transactions in the fall.

On a month-to-month basis, California pending home sales were up 3 percent from June’s index of 119.0.

At the regional level, Southern California pulled up the market with a year-over-year increase in pending home sales, while the San Francisco Bay Area reversed its gain last month. Pending sales in the Central Valley were essentially flat.
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Freddie Mac Announces Redesigned U.S. Residential Mortgage Loan Application
Freddie Mac announced this week a redesigned standard application for borrowers to use when they apply for a single-family mortgage. The redesigned Uniform Residential Loan Application (URLA) was developed jointly with Fannie Mae under the direction of the Federal Housing Finance Agency (FHFA). This marks the first substantial revision to the URLA in more than 20 years.

In addition to a reorganized layout and simplified terminology, the new URLA includes data fields such as mobile phone number, email address, and military service.

Lenders may begin using the redesigned URLA on Jan. 1, 2018, for single-family loans submitted to Freddie Mac and Fannie Mae as well as mortgages that are federally insured by the Federal Housing Administration (FHA), the Veterans Administration (VA), or the U.S. Department of Agriculture's Rural Housing Service (RHS).
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New Home Sales Rise in July
Sales of new single-family houses rose 31.3 percent in July to a seasonally adjusted annual rate of 654,000 compared with the previous year’s 498,000, according to the U.S. Census Bureau and the Dept. of Housing and Urban Development. On a month to month comparison, sales of new single-family houses rose 12.4 percent.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Home Purchase Sentiment Index Surpasses Survey High
Fannie Mae’s Home Purchase Sentiment Index(HPSI) increased 3.3 points to 86.5 in July, reaching a new all-time survey high and indicating a more positive outlook in the housing market-specific HPSI components.

Each of the six HPSI components increased in July. The largest increases were seen in the net share of consumers who expect home prices to go up over the next 12 months, which rose 8 percentage points after a drop in June, and the net share of consumers who expect mortgage interest rates to go down over the next 12 months, which rose 5 percentage points. The Household Income component also rebounded after dropping in June, rising 3 percentage points to 11 percent. Notably, the share of consumers who said they would buy if they were going to move increased to 67 percent, while the share of consumers who said they would rent moved down to 26 percent, equaling an all-time National Housing Survey low.
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Housing Markets Continue Gradual Climb Back to Normal
Markets in 146 of the approximately 340 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the second quarter of 2016, according to the latest NAHB/First American Leading Markets Index (LMI). This represents a year-over-year net gain of 66 markets.

The index’s nationwide score ticked up to .97, meaning that based on current permit, price and employment data, the nationwide average is running at 97 percent of normal economic and housing activity. Meanwhile, 91 percent of markets have shown an improvement year over year.
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Study Finds Owners Overestimate Home Values
Quicken Loans' National Home Price Perception Index found appraised values were an average of 1.69 percent lower than what homeowners expected in July. The gap between these two measures of home values narrowed since June when appraisals lagged behind expectations by 1.93 percent.

Home values continued to rise in July, according to the Quicken Loans Home Value Index (HVI), the only measure of home value changes based solely on appraisals. The national index reflected a 1.43 percent increase from June, and a year-over-year gain of 6.24 percent.
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Rising Sea Levels Threaten to Put Nearly 2 Million U.S. Homes Underwater
Nearly 2 million U.S. homes would be lost if the oceans rise by six feet as scientists expect by the year 2100, according to a new Zillow analysis. The endangered homes represent just under two percent of the national housing stock, and are worth a cumulative $882 billion.

New research published in the scientific journal Nature found that sea levels could rise six feet by the year 2100, mostly due to melting Antarctic ice sheets. This new estimate nearly doubles previous expectations for rising oceans.

Using data from the National Oceanic and Atmospheric Administration, Zillow identified which homes would be affected by the predicted six-foot rise in ocean levels.

More than half of all homes that would be lost are in Florida, and they account for nearly half of the lost housing value as well. In all, one in eight Florida homes would be lost. More than 9 percent of homes in Hawaii would be underwater; 81 percent of those are in the capital city of Honolulu. Thirty-six coastal cities would be entirely underwater, and nearly 300 cities would lose at least half their homes. In California, 42,353 homes are at risk of being underwater with a total value of $49.2 billion.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

President Obama signs H.R. 3700
Last week, President Obama signed H.R. 3700, the "Housing Opportunity Through Modernization Act. The legislation includes reforms to current Federal Housing Administration restrictions on condominium financing, among other provisions, and was long supported by both C.A.R. and NAR.

Changes include efforts to make FHA's recertification process "substantially less burdensome," while lowering FHA's current owner-occupancy requirement from 50 percent to 35 percent. The bill also requires FHA to replace existing policy on transfer fees with the less-restrictive model already in place at the Federal Housing Finance Agency. 

This legislation will help offer relief to well-qualified potential home buyers who have been facing tight housing inventories, rising home prices, and strict mortgage credit underwriting guidelines.

C.A.R. thanks the 19,000-plus California REALTORS® who responded to NAR's Call-for-Action and urged their senators to pass this legislation and offer relief to home buyers.
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U.S. Treasury Expands All Cash Buyer Rule to California
The Financial Crimes Enforcement Network (FinCEN) announced last week that it has expanded its Geographic Targeting Orders (GTO), temporarily requiring U.S. title insurance companies to identify the natural persons behind shell companies used to pay “all cash” for high-end residential real estate in six major metropolitan areas, including five in California.  Expanding the GTOs is a continued effort to monitor financial real estate transactions to combat money laundering and the financing of terrorism.

FinCEN remains concerned that all-cash purchases (i.e., those without bank financing) may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures. FinCEN issued a similar requirement earlier this year covering transactions in Manhattan and Miami-Dade County, Fla. 

The additional areas in California now include Los Angeles, San Francisco, San Mateo, and Santa Clara, and San Diego counties. 
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CFPB Proposes TRID Changes
The Consumer Finance Protection Bureau announced a change to the TILA-RESPA Integrated Disclosure, or TRID, which clarifies the rules regarding sharing the mortgage “closing disclosure” form, or CD. 

The CD is delivered to homebuyers in advance of their closing and contains important financial information related to their purchase. Since the October 2015 implementation of TRID, REALTORS® have raised red flags over challenges in gaining access to the form. Many lenders chose to withhold this document from real estate agents since Know Before You Owe went into effect, despite a longstanding tradition of sharing similar information.

The CFPB said it understands that it is usual, accepted and appropriate for creditors and settlement agents to provide a closing disclosure to consumers, sellers and their real estate brokers or other agents.

Giving REALTORS® access to the CD would strengthen consumers' understanding of their mortgage and home purchase by helping agents continue to provide expert advice to their clients. “This is a significant victory that will help REALTORS® continue to provide the expert service their clients have come to expect,” said NAR President Tom Solomone.
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Homeownership Rate Hits 50-Year Low
The share of Americans who own their own homes dropped to the lowest rate since 1965 and well below its peak of 69.2 percent in June 2004, according to the U.S. Census Bureau.

The homeownership rate of 62.9 percent in second quarter 2016 was lower than the second quarter 2015 rate of 63.4 percent and lower than the 63.5 percent rate in the first quarter 2016, 

By race, the homeownership rate for the second quarter 2016 for non-Hispanic white households was the highest at 71.5 percent. The homeownership rate for Asian or Native Hawaiian and Pacific Islander households was 53.7 percent and 41.7 percent for blacks. 

The homeownership rate for black households was lower than the second quarter 2015 rate, while the rate for non-Hispanic white households was not statistically different from the second quarter 2015 rate. The rate for Asian or Native Hawaiian and Pacific Islander households cannot be compared to second quarter 2015, as data prior to 2016 are not tabulated. 
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Mortgage Applications Decrease in Weekly Survey
Mortgage applications decreased 3.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 29, 2016.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier to the lowest level since February 2016 while the seasonally adjusted Government Purchase Index fell to the lowest level since November 2015. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 6 percent higher than the same week one year ago.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Home Price Increases Ease in May
Data released this week for the S&P CoreLogic Case-Shiller Indices show that home prices continued their rise nationwide in May 2016.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers nine U.S. divisions, reported a 5 percent annual gain in May, the same as the month prior. The 10-City Composite posted a 4.4 percent annual increase, down from 4.7 percent the previous month. The 20-City Composite reported a year-over-year gain of 5.2 percent, down from 5.4 percent in April.
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Consumer Confidence Virtually Unchanged in July

The Conference Board Consumer Confidence Index, which had increased in June, was relatively unchanged in July. The Index now stands at 97.3 (1985=100), compared to 97.4 in June. The Present Situation Index increased from 116.6 to 118.3, while the Expectations Index edged down to 83.3 from 84.6 in June.

Consumers’ assessment of present-day conditions improved slightly in July. Those stating business conditions are “good” increased from 26.8 percent to 28.1 percent, however those saying business conditions are “bad” also rose, from 18.3 percent to 19 percent. Consumers’ appraisal of the labor market was little changed from last month. Those claiming jobs are “plentiful” declined marginally from 23.2 percent to 23.0 percent, however those claiming jobs are “hard to get” also decreased, from 23.7 percent to 22.3 percent.
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California Pending Home Sales Up in June
Led by the San Francisco Bay Area, California pending home sales continued their upward momentum in June to post three straight months of annual increases, C.A.R. said this week.

Statewide pending home sales rose in June on an annual basis, with the Pending Home Sales Index increasing 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016, based on signed contracts. With pending sales on a rising trend in the past couple of months, June’s increase should portend for higher closed transactions in July and August.

California pending home sales declined 7 percent on a monthly basis compared to May, primarily due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales were down 3.2 percent from May and up 3 percent from June 2015.
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Fannie Mae Enhances HomeReady Mortgage
Fannie Mae announced enhancements to its HomeReady mortgage program. HomeReady is Fannie Mae’s affordable mortgage option designed to meet the diverse needs of today’s borrowers. HomeReady allows borrowers to provide as little as 3 percent down, and was the first affordable lending option to offer creditworthy borrowers the ability to qualify with income from non-borrower household members.

New enhancements offer:

• Simplified income eligibility – Fannie Mae raised income limits to 100 percent of an area’s median income in all areas, except low income market tracts that have no limit, making it easier for lenders to determine eligibility for HomeReady and helping more homebuyers take advantage of this affordable mortgage option.
• More support for sustainable homeownership – In addition to the popular online course offered by Fannie Mae’s partner Framework, Fannie Mae will accept one-on-one pre-purchase advising from HUD-approved providers to meet HomeReady’s homeownership education requirement. In the coming months, Fannie Mae will offer lenders a $500 credit to encourage borrowers to take advantage of this new personalized support option. 
• Market-driven features – More than 700 Fannie Mae lenders have already adopted the HomeReady mortgage, helping thousands of families become homeowners. HomeReady features continue to evolve to incorporate feedback from lenders, making it a simpler, more effective product for the affordable and underserved market..

More info

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

C.A.R. Disappointed in HUD Decision to Insure FHA Mortgages with PACE Loans
Yesterday, HUD announced a new policy that the FHA will begin insuring mortgages on certain properties with Property Assessed Clean Energy (PACE) loans. C.A.R. issued a statement expressing disappointment in HUD’s decision.

In the statement, C.A.R. President Pat “Ziggy” Zicarelli said, “Although C.A.R. supports voluntary consumer-friendly energy improvement programs for homeowners, C.A.R. believes that HUD was ill advised to approve placing PACE loans in a senior position to FHA first mortgages. Doing so places FHA homebuyers and taxpayers at risk and does homeowners a disservice by approving a loan product without consumer protections and which is aggressively sold to homeowners who rely on FHA financing for safe and affordable mortgages.

“This loan product has no minimum disclosures, no underwriting of the borrower, no proof that the borrower has the ability to repay, no three-day right to rescind, no marketing limitations, no interest rate or fee caps, no kickback prohibitions; nothing,” added Zicarelli. “If the housing market of the last decade has taught us anything, it’s that first-time homeowners, and low- and moderate-income homeowners are the most vulnerable and will be taken advantage of. Sadly, it is they who the FHA is inviting unregulated PACE lenders to target.”
Read the statement

Housing Starts Rise in June
Nationwide housing starts rose 4.8 percent in June to a seasonally adjusted annual rate of 1.19 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.

Single-family housing starts rose 4.4 percent to a seasonally adjusted annual rate of 778,000 units in June while multifamily production ticked up 5.4 percent to 411,000 units.
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Property Managers Concerned About Identity Theft, Online Fraud
A new survey from TransUnion revealed how the growth of online rental applications has coincided with concerns of property managers about identity theft and online fraud.

TransUnion’s survey found that more than half (56.5 percent) of property managers have experienced an increase in online applications in the past year while nearly seven in 10 (67.1 percent) respondents reported concerns about identity theft and online fraud

According to the survey, nearly four in 10 (36.5 percent) property managers are not confident about the accuracy of residents’ application information.

Other key survey findings include:

• In the past year, eight in 10 (80.6 percent) property managers have increased rent on their rental units. Two in five (40 percent) property managers increase rents more than once per year, while half (51.9 percent) of the property managers increase rent once per year.
• Property managers ranked income and employment information as the most important technique for screening prospective residents, followed by criminal background checks, rental and eviction history and credit history.

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Percentage of Subprime Mortgage Loan Origination Volume Increases
Equifax Inc. released its May 2016 National Consumer Credit Trends Report, which shows among other findings, that total mortgage volume increased in Q1 2016, compared to opening quarters in previous years.

Total new accounts and year-over-year increases for the first quarter of 2016 include:

• Home equity installment loans: 182,400, an increase of 23.5 percent and an eight-year high for an opening quarter;
• First mortgages: 1.86 million, an increase of 10.3 percent; and
• Home equity lines of credit (HELOC): 314,400, an increase of 10.2 percent.

Similarly, the latest data shows that lending to borrowers with subprime credit scores (consumers with an Equifax Risk Score of 620 or below) - as a share of total lending - has remained consistent for the third consecutive year. New first mortgage accounts to subprime borrowers during Q1 of 2015-2016 have increased on a consistent basis alongside that of prime lending, with approximately 95 percent accounting for prime loans and 5 percent accounting for subprime loans.
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Builder Confidence Holds Firm in July
Builder confidence in the market for newly built, single-family homes fell one point to 59 in July from a June reading of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components edged lower in July. The components measuring current sales expectations and buyer traffic each fell one point to 63 and 45, respectively. The index measuring sales expectations in the next six months posted a three-point decline to 66.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Home Purchase Sentiment Index Decreases in June
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased 2.1 points to 83.2 in June, down from May’s all-time survey high, as more consumers report mixed views toward housing and income growth. Among those surveyed, the share who said now is a good time to sell a home increased 5 percentage points on net to a survey-high of 18 percent, and those saying now is a good time to buy a home rose 3 percentage points on net to 32 percent. The share of consumers who expect home prices to go up over the next 12 months dropped 9 percentage points on net. In addition, those reporting that their household income is significantly higher than it was 12 months ago dropped 10 percentage points on net in June, and the net share of consumers who are not concerned about losing their job fell 4 percentage points. Fewer consumers also reported a positive outlook on the state of the economy – those who think the economy is on the wrong track ticked up to 59 percent in June.
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Wait Times Now Available on C.A.R. Legal Hotline App
C.A.R. recently released an update to the C.A.R. Legal Hotline App that now shows the estimated wait time of the two hotlines –one for brokers and one for agents. The hotlines have three possible states available, with a range of wait times to indicate how busy the lines are:

• 0-15 minutes – green,
• 15-30 minutes – yellow, 
• 30+ minutes – red

Because phone calls can vary greatly in length, the wait time range is C.A.R.’s best estimate for the current call volume. The wait time status is refreshed every 5 minutes and will update in the app automatically.

C.A.R. also added the legal hotline form (the third item on the Contact Us list) to submit a question online as an alternative should the hotline be closed or experience long wait times.
 
Update the app today or download it from the Apple App Store or Google Play store.

Appraisers View Home Values Lower than Home Owners Estimate
Quicken Loans recently announced home values assigned by appraisers were 1.93 percent lower than what homeowners estimated in June, according to the company’s national Home Price Perception Index (HPPI). The difference between value perceptions from appraisers and owners has slightly widened since May, when appraised values were 1.89 percent lower than expected.

Home valuations across the country rose in June, as reported by the Quicken Loans Home Value Index (HVI). The average home appraisal increased 0.84 percent since May and enjoyed a 4.47 percent boost since June 2015.
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Student Debt Causing Chasm about Buying between Homeowners, Renters
Despite lackluster economic growth and stark home-price appreciation in several parts of the country in recent months, roughly three-quarters of surveyed households still believe now is a good time to buy a home, but there's a considerable gap in morale between homeowners and renters, according to the latest installment of the NATIONAL ASSOCIATION OF REALTORS®’ Housing Opportunities and Market Experience (HOME) survey. The survey also found that roughly half of young adults with student debt are uncomfortable about taking on a mortgage.

Through the first half of the year, NAR's survey found that the share of homeowners and renters who believe now is a good time to buy a home is mostly holding steady, with 80 percent of homeowners (82 percent in March) and 62 percent of renters (unchanged from last quarter) saying it's a good time to buy. However, the share of renters who think so is down from 68 percent in December 2015, and those under 35 were the least confident that now is a good time to buy.

This quarter's HOME survey also revealed that carrying student debt is causing many to be uneasy about taking on additional debt. According to the survey, roughly two-thirds of non-homeowners and half of respondents under 35 with student debt said they aren't comfortable also having a mortgage. Furthermore, of those with student debt, non-homeowners and younger adults were less likely to believe they'd be able to qualify for a mortgage if they applied.
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CoreLogic Reports 38,000 Completed Foreclosures in May
CoreLogic released its May 2016 National Foreclosure Report which shows that foreclosure inventory declined 24.5 percent and completed foreclosures declined 6.9 percent compared with May 2015. The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, representing a decrease of 67.9 percent from the peak of 117,813 in September 2010.

The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.3 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.3 million homes lost to foreclosure.

As of May 2016, the national foreclosure inventory included approximately 390,000, or 1.0 percent, of all homes with a mortgage compared with 517,000 homes, or 1.3 percent, in May 2015. The May 2016 foreclosure inventory rate is the lowest for any month since October 2007. 
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Since the Bust, Foreclosed Homes Have Boomed
Homes that were foreclosed during the housing crisis have gained almost twice as much value as other homes, according to a new analysis by Zillow. But the original owners of those homes have not benefited from that recovery.

Since low-end homes were much more likely to be foreclosed, the analysis shows how the housing crisis worsened the gap between rich and poor in the U.S.

During the run-up to the housing bubble, many low-income earners bought homes, and the homeownership rate rose from about 65 percent in the mid-1990s to almost 70 percent in 2006. When home values crashed in 2007, millions of homeowners had to walk away – abandoning their initial investment and missing the opportunity to gain equity as home values recovered.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Home Prices Up 5.9 Percent Year Over Year in May
CoreLogic released its CoreLogic Home Price Index (HPI) and HPI Forecast data for May 2016 which shows home prices are up both year over year and month over month.

Home prices nationwide, including distressed sales, increased 5.9 percent year over year in May 2016 compared with May 2015 and increased 1.3 percent month over month in May 2016 compared with April 2016, according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices will increase 5.3 percent on a year-over-year basis from May 2016 to May 2017, and on a month-over-month basis home prices are expected to increase 0.8 percent from May 2016 to June 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
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C.A.R. Innovator’s Workshop
C.A.R. recently launched the Innovator’s Workshop – a “Shark Tank” for real estate, of sorts. Innovators are welcome to make their best pitch for an idea or tool that can help elevate the business of real estate professionals. Individuals or company submissions that are selected will gain access to assets and resources from C.A.R. to help turn the vision into reality. Similar to the premise of the popular TV show “Shark Tank,” C.A.R. will offer capital, expertise, and support staff  -- whatever is deemed necessary – in readying the idea for the market. Applications for the program are open to REALTORS®, brokers, real estate industry gurus, engineers, software developers, and entrepreneurs.
More info

International Home Sales Dollar Volume Retracts in U.S.
Waning economic growth in many countries and higher home prices further enhanced by a strengthening U.S. dollar resulted in a slight decline in international sales dollar volume of U.S. property over the past year and a significant retreat in buying from non-resident foreigners.

This is according to an annual survey of residential purchases from international buyers released by the NATIONAL ASSOCIATION OF REALTORS®. The survey also amazingly revealed that the dollar volume of sales from Chinese buyers exceeded the total dollar sales figure of the next top four ranked countries combined.

NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate, covering U.S. residential real estate sales to international clients between April 2015 and March 2016, found that foreign buyers purchased $102.6 billion of residential property, a 1.3 percent decline from the $103.9 billion of property purchased in last year’s survey. Overall, a total of 214,885 U.S. residential properties were bought by foreign buyers (up 2.8 percent), and properties were typically valued higher ($277,380) compared to the median price of all U.S. existing home sales ($223,058).
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Millennials Most Likely to Live Alone in Richmond and Pittsburgh
More millennials live alone in Richmond, Va. than in any other major U.S. metro, according to a recent Zillow analysis. In Richmond, 15 percent of millennials live alone, followed by 14 percent in Pittsburgh and Buffalo, N.Y.

Across the U.S., almost 9 percent of millennials live alone, a number that's been declining since 2005, likely due to unaffordable rents and rising home prices. Consequently, millennials choose to live with their parents or find roommates.

The percentage of 23-34 year olds living with family increased 46 percent between 2000 and 2013, according to a recent Zillow analysis. Similarly, 21 percent of millennials across the U.S. are still living at home with their moms, proving that living with friends or family may be one of the ways to afford housing in some of the nation's hottest markets.
More info
 

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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia, maryb@car.org

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Nearly All Top Housing Metros Improve Year Over Year
Freddie Mac recently released its Multi-Indicator Market Index (MiMi), showing the spring homebuying season staying on course in most areas of the country, with two additional metros -- Charlotte, North Carolina, and Knoxville, Tennessee -- entering their benchmark ranges.

The national MiMi value stands at 84.1, indicating a housing market that's on the outer range of its historic benchmark level of housing activity, with a +0.27 percent improvement from March to April and a three-month improvement of +1.63 percent. On a year-over-year basis, the national MiMi value has improved +7.37 percent. Since its all-time low in October 2010, the national MiMi has rebounded 42 percent, but remains significantly off from its high of 121.7.
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Consumer Confidence Improves in June
Consumer confidence, which had decreased in May, improved in June. The Index now stands at 98 (1985=100), up from 92.4 in May. The Present Situation Index increased from 113.2 to 118.3, while the Expectations Index rose from 78.5 to 84.5 in June.

Consumers’ appraisal of current conditions improved in June. Those stating business conditions are “good” increased slightly from 26.1 percent to 26.9 percent, while those saying business conditions are “bad” decreased from 21.4 percent to 17.7 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” declined from 24.5 percent to 23.4 percent, however those claiming jobs are “hard to get” also decreased from 24.5 percent to 23.3 percent.

Consumers’ optimism regarding the short-term outlook improved in June. Those expecting business conditions to improve over the next six months increased from 15.0 percent to 16.8 percent, while those expecting business conditions to worsen decreased slightly, from 11.7 percent to 11.4 percent.
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Baby Boomers Poised to Compete for Affordable Rental Housing
Baby Boomers and others aged 55 or older, including several million current homeowners, are poised to move to rental units based on estimates from the first Freddie Mac 55+ Survey of housing plans and perceptions of people born before 1961.

The Freddie Mac 55+ Survey shows an estimated 6 million homeowners and nearly as many renters prefer to move again and rent at some point. Of those that expect to move again, over 5 million indicate they are likely to rent by 2020.

Majorities of 55+ renters (79 percent) and homeowners (83 percent) who expect to rent their next home predict it will cost the same or less than their current one, according to the Freddie Mac 55+ Survey.

Other findings from the Freddie Mac 55+ Survey found just over half of renters (51 percent) prefer renting over owning. This is especially true among existing multifamily renters (60 percent). The survey also underscores the need for additional affordable rental housing. Specifically, 47 percent of 55+ renters say they struggle from payday to payday, while 13 percent admitted they sometimes could not afford basics until their next paycheck.
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Get ready for Long Beach! The CALIFORNIA REALTOR® EXPO is an event you won’t want to miss out on! Join us Sept. 27-29 and let’s get people asking, “WHO’S YOUR REALTOR®?”  Register now and save with early-bird pricing!

Housing Costs Pinch 21.3M Renters
A record high number of American renters — about 21.3 million — are devoting 30 percent or more of their income to paying rent, according to the annual State of the Nation's Housing report from Harvard University's Joint Center for Housing Studies. What's more, 11 million renters in 2014 paid at least half of their income toward housing costs, which marked another record high, the report shows. Most financial experts say consumers shouldn't pay more than 30 percent of their monthly income for housing costs.

Rents, however, have been rising faster than wages for years now. In 2015, the median rent for a new apartment was $1,381, according to the report. That means a renter would need to earn at least $55,000 a year to afford the rent. Yet on average, renters earn about $34,000 a year — so for them, an affordable rent would be closer to $850.
More info
 

New Collaborative Launches Effort to Highlight Housing Counseling for Consumers
Housing counseling is available to consumers across the country and represents a tremendous opportunity for those who need assistance on the path to homeownership; but too often, homebuyers and sellers are not even aware it exists.

A national collaboration of lenders, investors, real estate agents, and housing counseling agencies announced that they are joining forces to raise awareness of the opportunities and benefits of working with housing counseling agencies.

The Homeownership Collaborative will try out ideas in four markets during the next year and explore a broader effort in the future, all with the goal of increasing housing counseling awareness.
More info

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

FAA Finalizes Rule for Commercial Drones
Using a drone to capture listing photos and videos or inspect properties is about to become significantly easier now that the federal government has finalized its long-awaited regulations over the commercial use of unmanned aerial systems.

The final rule issued Tuesday by the Federal Aviation Administration paves the way for people who obtain a remote pilot certificate to operate drones that weigh less than 55 pounds, as long as the aircraft remains within visual line-of-sight. Earning the certificate will involve passing a test of aeronautical knowledge at an FAA-approved testing center — but it will not require applicants to have formal flight training.

The new FAA regulations, which take effect in August, follow requests from industry groups, including the NATIONAL ASSOCIATION OF REALTORS®, for regulators to develop a framework that would allow people without specialized training to use drones for purposes other than a hobby. NAR sent multiple letters to the FAA during the rulemaking process and testified before Congress in support of the use of drones in the real estate industry.
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Inventory Drops Again, But Demand for Starter Homes Also Falling
Trulia recently released its latest quarterly edition of the Trulia Inventory and Price Watch. This quarter's report offers buyers and sellers deeper insight into the change in supply and affordability of homes over the past year, within three different segments: starter homes, trade-up homes, and premium homes.

The spring house-hunting season brought very little relief for homebuyers, as the national inventory of all homes has dropped by about 6 percent over the past year. The number of starter and trade-up homes on the market nationwide has dropped by 12.3 percent and 11.5 percent, respectively. Meanwhile, decreased inventory continues to take a toll on the affordability of all home segments. Buyers will need to set aside between 0.5 percent and 1.3 percent more of their income towards a home purchase than they did last year. However, starter affordability has been hit the hardest, and as a result, starter homebuyers need to dedicate 1.3 percent more of their monthly income to buy a starter home.
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Housing Costs Pinch 21.3M Renters
A record high number of American renters — about 21.3 million — are devoting 30 percent or more of their income to paying rent, according to the annual State of the Nation's Housing report from Harvard University's Joint Center for Housing Studies. What's more, 11 million renters in 2014 paid at least half of their income toward housing costs, which marked another record high, the report shows. Most financial experts say consumers shouldn't pay more than 30 percent of their monthly income for housing costs.

Rents, however, have been rising faster than wages for years now. In 2015, the median rent for a new apartment was $1,381, according to the report. That means a renter would need to earn at least $55,000 a year to afford the rent. Yet on average, renters earn about $34,000 a year — so for them, an affordable rent would be closer to $850.
More info
 

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

QUESTIONS OR COMMENTS: contact C.A.R.      

Owners in Western Cities Underestimate the Value Appraisers Put on Their Homes
Quicken Loans announced that home appraisals in May were an average of 1.89 percent lower than what homeowners were expecting, according to the national Home Price Perception Index (HPPI). This is a slight move toward equilibrium compared to a difference of 1.95 percent in April. The East and Midwest are seeing the same discrepancy as the national aggregate, while the West is bucking this trend, with many of the region’s metro areas appraising higher than owners’ estimates.

Appraised values continued to climb in May. Quicken Loans’ National Home Value Index (HVI) reported values rising an average of 0.79 percent since April, but posting a robust 4.36 percent increase since May 2015. All four regions examined told a similar story – modest monthly growth and substantial annual increases.
Read more

Facebook Now Included in #HomeChampSweepstakes
C.A.R.’s #HomeChampSweepstakes has now been expanded to include Facebook as an eligible form of entry into the sweepstakes. To enter, simply add a photo of you and your client during any phase of the home buying or selling transaction to your publicly accessible (cannot be an account set to “private”) Facebook, Instagram, or Twitter account, tag your client (or post their names if you don’t follow them on social media), and add the hashtag #HomeChampSweepstakes to the description.

Each week from now until July 1, 2016, two pairs of winners will be randomly selected to win a cool tech prize, including an Amazon Echo, Nest Thermostat, and more.
Learn more about the sweepstakes and see the official rules 

Finance Helpline's Back-to-Basics Webinar: Underwriting & Loan Programs
Wednesday, June 22, 10 a.m. - 11 a.m.

Join C.A.R.’s Finance Helpline for a new Back-to-Basics Webinar on Wednesday, June 22, 10 a.m. to 11 a.m. where they will host expert speakers from Bank of the West to cover underwriting basics.  The underwriting process is often opaque and not easily understood by clients, but it holds the key to obtaining the right mortgage.  This hour-long webinar will cover what is to be expected during the underwriting process, what qualification criteria is required as well as taking a closer look at loan programs designed for first time buyers, jumbo, and low to moderate or 1099 income earners.

Don’t miss out on this opportunity to help you set expectations, timelines, and unlock lending opportunities for you and your client’s.
Register now

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia       

Move, Zillow Reach Settlement on Eve of Trial
Zillow agreed Monday to pay $130 million to settle allegations that two of its executives stole trade secrets from Move Inc., operator of realtor.com®. The settlement came just as the case was preparing to move to trial, with jury selection slated for this week.

NAR was a co-plaintiff in the suit, brought in 2014 against Zillow and the two executives, both former executives of Move. Move and NAR had accused the former Move executives, Errol Samuelson and Curt Beardsley, of stealing confidential documents and breaching their fiduciary duties to the company.

Among the key issues to be decided was whether the executive defections played a role in derailing a potential Move-Trulia merger. Judge Sean O’Donnell of the King County Superior Court in Seattle ruled in pre-trial motions that Move and NAR showed sufficient evidence to argue that, because of the defendants’ acts, Zillow was “unjustly enriched” by its acquisition of Trulia – a claim that could have carried up to $1 billion in damages. O’Donnell had also granted a motion to allow a jury instruction on evidence destruction by Beardsley.
More info

Town Hall Webinar
Join C.A.R.’s Vice President and Chief Economist Leslie Appleton-Young and Senior Vice President and Chief Lobbyist Alex Creel for a town hall webinar Tuesday, June 14, 10 a.m. – 11 a.m. as they discuss housing affordability and inventory from an economic and political perspective.
Space is limited, so register today.

Majority of 55+ Homeowners Confident of Financially Comfortable Retirement
Three out of four homeowners born before 1961 are confident they will have a financially comfortable retirement according to the Freddie Mac 55+ Survey, a comprehensive survey of the housing perceptions and preferences of Americans over the age of 55 released by Freddie Mac.

The survey also found that the majority of homeowners in this age group were very satisfied with their homes, their communities and their quality of life. Consistent majorities also said homeownership makes financial sense at almost every stage of adult life, whether or not a person is married or has children.
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Renters Value Homeownership, Face Affordability Challenges
Current renters value homeownership and want to buy a home but many are encountering affordability and financial obstacles that prevent them from buying, according to C.A.R.’s “2016 Renter Survey.”

Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a downpayment would motivate them to buy now.

Homeownership remains important to renters, with nearly half (45 percent) rating it 8 or higher in importance on a scale of 1-10, with 10 being extremely important. The average was 6.8. Nearly all renters (95 percent) see advantages to homeownership; freedom to do what you want with your home, building equity, and having permanence and stability were the top benefits mentioned by renters.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia 

Senior Housing Facing Affordability Crisis
Millions of older adults will struggle to find housing that is affordable and physically suits their needs, according to a new report by the Bipartisan Policy Center’s Senior Health and Housing Task Force, which outlines recommendations for states and legislators to help alleviate the lack of suitable senior housing.

In 2013, about 11.2 million "extremely low-income" renter households existed, which includes 2.6 million senior households with no children. Yet the former HUD secretaries note that only 4.3 million affordable and rental homes were available. The shortfall: 6.9 million homes.

What's more, the number of households aged 65 to 74 and 75 and older with "severe" rent burdens — which means they pay more than 50 percent of their income on housing — is expected to rise by 42 percent and 39 percent, respectively, by 2025, according to the Harvard Joint Center for Housing.
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Facebook Is Motivating Home Buying Decisions
Facebook friends can be a powerful motivator when it comes to home ownership, according to a report by the National Bureau of Economic Research. Researchers found that Facebook users whose friends had a positive home ownership experience are more likely to be influenced to buy a home of their own.

Consumers who had online networks post about their home values rising more than 5 percent over the past two years, for example, are 3.1 percent more likely to buy a home over the next two years, researchers found. What’s more, they are 1.7 percent more likely to purchase a bigger home, 3.1 percent more likely to pay a higher price for it, and 7 percent more likely to make a larger down payment.

In the study, researchers evaluated nearly 1,250 responses to a housing market survey distributed to Facebook users in Los Angeles as well as LA public deed records of nearly 434,000 renters and more than 1 million home owners.
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Single Men vs. Women: Who Fares Best in Housing?
Home ownership is more profitable for single men than for single women, according to a new study by RealtyTrac.

Indeed, researchers found that homes owned by single men are valued 10 percent higher, on average, than homes owned by single women. Also, homes owned by single men have gained an average of $63,921 since purchase, which equates to a 33 percent return on purchase price. That is $10,112 – or 16 percent – higher than average gains single women have seen from their home purchase.

The current value of homes owned by single men averages $255,226 – 10 percent above the current market value average of homes owned by single women ($229,094).
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 Consumers Applying for a Mortgage Up to Three Times as Likely to Open New Credit Cards and Auto Loans
A new TransUnion study found that consumers applying for a new mortgage are on average two to three times more likely to open a new auto loan or credit card account over the next 12 months. In fact, many of these consumers open these accounts as soon as one month after their existing mortgage payoff.

The study found that prime or better mortgage applicants on average are over 50 percent as likely to open a new credit card over the next 12 months following a mortgage inquiry compared to the overall population. These same consumers can be up to three times as likely to open a new auto loan in that same 12 month period.
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

Share First-Time Homebuyers Increases in April
The share first-time homebuyers continued to grow in April, even with low inventory and tough competition, according to results from the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

First-time homebuyers accounted for 38.9 percent of home purchases in April, based on a three-month moving average. That was up from 38.1 percent the previous month and 37.2 percent in April 2015.
As of the end of April, the market share for first-time homebuyers had increased for five consecutive months, taking share from both current homeowners and investors. Current homeowners accounted for 45.7% of home purchases in April and investors had a 15.4% share.
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California Pending Home Sales Trend Higher in April
Led by the Central Valley, California statewide pending home sales reversed a three-month decline and posted higher in April, but a persistent shortage of homes for sale may dampen the upcoming spring homebuying season, according to C.A.R.

Statewide pending home sales rose in April on an annual basis, with the Pending Home Sales Index increasing 4.1 percent from 135.9 in April 2015 to 141.6 in April 2016, based on signed contracts. April’s annual increase was the strongest thus far this year. The Index is now at its highest level since March 2012.

At the regional level, pending sales were up on an annual basis in all major regions of the state, with the Central Valley Region’s index reaching an all-time high, thanks to its high affordability and ample inventory. The Southern California region also saw a healthy uptick in pending sales from a year ago, driven by double-digit increases in Orange County and Riverside.
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Webinar: Will This Year’s Renters Become Next Year’s Home Buyers?
It's not too late to learn everything there is to know about renters so you can convert them into future clients! Join C.A.R.’s Research team for this webinar which will cover the results of C.A.R.'s 2016 Renter Survey. The survey includes the following information about renters:

• Demographics

• Current residence

• Reasons for renting

• Aspirations for home ownership and views on the importance and advantages of owning a home

• When and where they plan to buy

• How they plan to find a home and much more!

Date: Thursday, May 26, 2016
Time: 1 p.m. to 1:30 p.m. PST
Register now

 Sales of New Homes Rise in April
Sales of new single-family houses were at a seasonally adjusted annual rate of 619,000 in April 2016, according to  estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.6 percent above the revised March rate of 531,000 and is 23.8 percent above the April 2015 estimate of 500,000.

The median sales price of new houses sold in April 2016 was $321,100; the average sales price was $379,800.  The seasonally adjusted estimate of new houses for sale at the end of April was 243,000.  This represents a supply of 4.7 months at the current sales rate
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia   

Owner Perception of Home Values Improve
Quicken Loans announced appraiser valuations were 1.95 percent lower than what homeowners estimated in April, according to the national Home Price Perception Index (HPPI). The gap between the two values narrowed since March when appraiser opinions of value were 2.17 percent lower than homeowner expectations. The HPPI is based on the company’s mortgage application and appraisal data.

Appraisers’ valuations also continued the upward trend in April. Home values dipped a slight 0.66 percent since March, but grew at a measured pace on an annual basis – rising 3.79 percent according to Quicken Loans’ national Home Value Index (HVI).
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C.A.R. Finance Helpline Library Now Available in zipForm®
The C.A.R. Finance Helpline (CARFIN) library is now available in zipForm®. The CARFIN library provides you with the tools to help you assist your clients by putting information about financing the transaction at your fingertips – and it’s easily sharable with your clients. This new library will continue to grow with relevant informational tools that provide clarity for clients on financing. Included is how to increase the inventory of VA or FHA financing, detailed information about down payment assistance and a direct line to the Finance Helpline, a valuable free C.A.R. member benefit designed to help you smooth out the kinks with lenders in your real estate transactions.            

Your new C.A.R. library is accessible when you log-in to zipForm®. Look for CARFIN library when clicking the “Select Library” drop-down menu from your form viewer. Learn how to access your new member benefit by attending a webinar today!
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Thin housing supply constrains California home sales in April
While sales remained above the 400,000 benchmark level, California existing home sales fell from the previous year in April as tight housing inventory continues to impede the housing market, according to C.A.R. April marked the second worst start to a spring home-buying season since the housing recovery began in 2009.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,800 units in April, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.

The April figure was down 2.6 percent from the revised 417,580 level in March and down 5.4 percent compared with home sales in April 2015 of a revised 430,030. The year-to-year decline was the first in five months and the largest sales drop since August 2014.

An imbalance between supply and demand pushed the median price of an existing, single-family detached California home 5.3 percent higher in April to $509,100 from $483,280 in March. April’s median price was 5.1 percent higher than the revised $484,370 recorded in April 2015. April marked the first time in nine years that the median price has risen above the $500,000 level; it is still below the pre-recession peak of $594,530 reached in May 2007.
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 New Tool Helps Exchange and Store Sensitive Data
Citrix Sharefile has recently joined the C.A.R. Member Discount Program. Citrix ShareFile, and related products, is the solution of choice for fast, easy, and secure storage and sharing of files that integrates with the tools you use to get more done. Citrix helps you fulfill your technology needs to efficiently manage work, meet with clients, exchange information easily, access desktop computers remotely, and much more.

C.A.R. members can take advantage of the 15 percent lifetime discount and other exclusive benefits only through this link.
 

C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

FOR PERMISSION TO REPRINT CONTENT FROM C.A.R. NEWSLINE, please complete this request form.

Active Military Homebuyers Purchase at Younger Ages, Buy Larger, More Expensive Homes
Differences in household demographics and affordable financing options spur homebuying demand for young active-service military members, causing them to significantly outpace the share of non-military homebuyers under the age of 35, according to the first-ever 2016 Veterans & Active Military Home Buyers and Sellers Profile by NAR. The profile evaluates the differences of recent active-service and veteran home buyers and sellers compared to those who’ve never served. The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among active-service military members.

The results revealed quite a few contrasts between active-service military buyers and buyers who’ve never served. At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and was more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans.
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National Foreclosure Inventory Down 23.2 Percent
CoreLogic released its March 2016 National Foreclosure Report which shows that foreclosure inventory declined 23.2 percent and completed foreclosures declined 14.9 percent compared with March 2015. The number of completed foreclosures nationwide decreased year over year from 42,000 in March 2015 to 36,000 in March 2016, representing a decrease of 69.7 percent from the peak of 117,782 in September 2010.

As of March 2016, the national foreclosure inventory included approximately 427,000, or 1.1 percent, of all homes with a mortgage compared with 556,000 homes, or 1.4 percent, in March 2015. The March 2016 foreclosure inventory rate is the lowest for any month since October 2007. 
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C.A.R. Partners with New Client Review and Referral Service
eEndorsements has joined the C.A.R. Member Discount Program to offer members a complete review management solution to help capture verified customer testimonials and easily share them across social media and review sites. REALTORS® can also promote their customer endorsements on their website, Facebook business page, and in email with eEndorsements. Multi-user tools also are available for teams, brokerages, and other shared accounts. C.A.R. members receive a 65% savings and a FREE trial.
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 FHFA Adjusts Multifamily Lending Caps for Fannie Mae and Freddie Mac
The Federal Housing Finance Agency (FHFA) announced that it has increased the 2016 multifamily lending caps for Fannie Mae and Freddie Mac (the Enterprises) from $31 billion to $35 billion, effective immediately. The adjustment is consistent with FHFA's 2016 Scorecard for the Enterprises in which FHFA committed to review the estimates for the size of the multifamily finance market each quarter and increase the caps, if warranted.  The adjustment is based on increased estimates of the overall size of the 2016 multifamily finance market.  As described in the Scorecard, loans in certain affordable and underserved market segments will continue to be excluded from the purchase caps.  

The multifamily lending caps are intended to further FHFA's strategic goal of maintaining the presence of the Enterprises as a backstop for the multifamily finance market, while not impeding the participation of private capital.  The 2016 multifamily finance market is larger than had been estimated due to continued high levels of property acquisitions and deliveries of newly constructed apartment units, as well as record levels of loan maturities that require refinancing.  
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C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide. C.A.R. does not in any way endorse or sponsor any product or service or vendor mentioned herein unless expressly stated.

EDITED BY: Mary Belongia

FOR PERMISSION TO REPRINT CONTENT FROM C.A.R. NEWSLINE, please complete this request form.