UPDATED: JANUARY 01, 2020
UPDATED: JANUARY 01, 2020
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Responding to presidential candidate Joe Biden’s call to “establish a national standard for housing appraisals,” the Appraisal Institute said March 2 that a new standard is “unnecessary … because one already exists.”
The Appraisal Institute’s letter to Biden’s campaign agreed with his stated desire to end discriminatory and unfair practices in the housing market, and it noted that AI shares his expressed wish to tackle any racial bias that could lead to homes in communities of color potentially being appraised below their market value.
“But the reality is that national appraisal standards and ethics requirements already require appraisers to perform their work with impartiality, objectivity and independence, without bias,” said the letter from Appraisal Institute 2020 President Jefferson L. Sherman, MAI, AI-GRS. “Real estate appraisers are not the culprit.”
The Appraisal Institute’s letter noted that under the Uniform Standards of Professional Appraisal Practice, known as USPAP, appraisers “must not use or rely on unsupported conclusions relating to characteristics such as race, color, religion, national origin, gender, marital status, familial status, age, receipt of public assistance income, handicap, or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value.”
AI’s letter also said: “To be quite frank, the assertion that appraisers would systematically undervalue or overvalue real estate due to these factors is absurd and shows a profound misunderstanding of the real estate valuation profession. Appraisers have nothing to gain by such behavior, and in doing so we would lose the hard-fought public trust we have achieved over many, many years.”
The letter concluded: “Since national appraisal standards and ethics requirements already are in place, and since those requirements are enforced as law, there is no need for additional standards.
We urge you to reconsider your position, and we look forward to working with you to tackle community and economic development challenges facing this country.”
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Median Home Sales Prices Reach Record High of $258,000 in 2019; Homeowners Staying Put Longer as Average Homeownership Tenure Rises to New High
IRVINE, Calif. – Jan. 23, 2020 — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its Year-End 2019 U.S. Home Sales Report, which shows that home sellers nationwide in 2019 realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago. The latest profit figure, based on median purchase and resale prices, marked the highest level in the United States since 2006 – a 13-year high.
That $65,500 typical home seller profit represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.
Both raw profits and ROI have improved nationwide for eight straight years. However, last year’s gain in ROI – up less than three percentage points – was the smallest since 2011.
“The nation’s housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing ever-greater challenges for buyers seeking bargains. In short, it was a great year to be a seller,” said Todd Teta, chief product officer at ATTOM Data Solutions. “But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”
Among 220 metropolitan statistical areas with a population greater than 200,000 and sufficient historical sales data, those in western states continued to reap the highest returns on investments, with concentrations on or near the west coast. Metro areas with the highest home seller ROIs were in San Jose, CA (82.8 percent); San Francisco, CA (72.8 percent); Seattle, WA (65.6 percent); Merced, CA (63.2 percent) and Salem, OR (62.1 percent). The top four in 2019 were the same areas that topped the list in 2018.
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WASHINGTON, DC – In 2020, consumer spending, business fixed investment, and housing are all expected to contribute meaningfully to another year of positive growth in what continues to be the longest economic expansion in U.S. history, according to the latest commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group. The full-year 2020 growth forecast stands at 2.1 percent, while full-year 2019 real GDP growth was upgraded by one-tenth in the January forecast to 2.4 percent due to an unexpectedly strong contribution from net exports.
“While we believe the strength and resilience of the American consumer is the lynchpin of near-trend GDP growth, this year we expect consumer demand to re-establish housing construction as a significant contributor to economic growth – hence our theme for the year: A resilient economy overcomes risks to drive housing,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. “Strong labor markets, rising wages, and improved household balance sheets offer consumer spending upside potential, including the ability to withstand minor economic disruptions.”
“Simmering geopolitical tensions, trade concerns, potential equity overvaluation, and weakening manufacturing data suggest the risks to our forecast are skewed slightly to the downside, while accelerating global growth and consumer spending power offer upside and greater balance than in previous forecasts,” said Duncan. “We also continue to expect the Fed to maintain its hands-off approach to monetary policy in the new year, with no changes to the target federal funds rate despite persistently low inflation.”
Continued strength in labor markets and household balance sheets support the ESR Group’s expectation that consumer spending will remain both healthy and resilient – and perhaps even surprise to the upside – through 2021. Lackluster manufacturing data in the fourth quarter did lead the Group to pull forward into 2020 its forecast of a prolonged uptick in business fixed investment (BFI), with BFI now forecast to accelerate from 0.3 percent annual growth in 2019 to 2.9 percent in 2020.
The ESR Group also expects housing to carry into 2020 its late-2019 reemergence as a source of economic strength. Single-family construction is expected to report solid growth, with housing starts accelerating due to strong permits data and growing optimism among homebuilders. Low mortgage rates and labor market strength should continue to provide demand support, as made evident in part by the Fannie Mae Home Purchase Sentiment Index® re-approaching its survey high in recent months.
“Strong consumer demand and low mortgage rates – as well as moderate improvements to supply – have housing well-positioned for a come-back year in 2020,” Duncan continued. “While we expect housing to regain its place as an economic growth driver after a period of relative sluggishness, we recognize that the problems of affordability and inventory are likely to persist for the forecast horizon. Homebuilders have begun to accelerate the pace of single-family construction, including in the much-needed affordable space, but supply constraints still exist. In many areas, that demand-supply imbalance continues to contribute to entry-level home prices outpacing wage gains, exacerbating the affordability challenge.”
Visit the Economic & Strategic Research site at fanniemae.com to read the full January 2020 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
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UPDATED: JANUARY 01, 2020
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The U.S. Census Bureau’s Survey of Construction’s (SOC) estimate of the number of bedrooms in new single-family homes has shown a declining trend for homes with 4 bedrooms or more since 2015. The most recent SOC data show the number of bedrooms of new homes whose construction began in 2018 (new homes started).
Nationally, the number of single-family homes started with 4 bedrooms or more declined from 44.8% in 2017 to 43.5% in 2018. These developments are linked to changes in preferences among home buyers. With more Millennials becoming prepared to buy their first home, the starter home share will rise, which means smaller homes and slightly fewer bedrooms.
Historically, new homes started with 3 or 4 bedrooms have held the highest shares and new homes started with 2 bedrooms or less or 5 bedrooms or more have held the lowest shares. The declining trend mirrors the downward trend of new single-family home size.
As of 2018, the share of new single-family homes started with 3 bedrooms was the highest of all categories, at 45%, with those with 4 bedrooms trailing at 34%. The lowest two categories were new homes started with 2 bedrooms or less and 5 bedrooms or more, with shares of only 11% and 9%, respectively.
Regionally, most Census divisions show declines for the typical number of bedrooms in single-family homes. An exception is the West North Central region, which experienced a slight rising trend.
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Conventional wisdom says the Federal Reserve won’t cut rates during an election year, to avoid looking like it’s favoring one candidate over another – unless there’s an economic shock so severe, it’s forced to act.
However, we don’t live in conventional times.
UBS, one of the world’s biggest investment banks, is predicting the Fed could lower interest rates three times in 2020, an outlook at variance with other forecasters that are calling for no change or just one rate cut this year. If it’s correct, it would put downward pressure on mortgage rates.
Damage from tariffs not covered under the Phase One trade deal signed by President Donald Trump on Wednesday will force the Fed to ease monetary policy, Arend Kapteyn, global head of economic research at UBS, said at the UBS Greater China Conference in Shanghai, China, on Tuesday.
Kapteyn is not saying there will be a financial shock to the system. Rather, Kapteyn is saying the slowdown already predicted by the Fed will be worse than expected. The central bank forecast at its December meeting that GDP growth will drop to 2% in 2020 from 2.2% in 2019.
Kapteyn said the first of the three Fed rate cut could come in March.
“We think this tariff damage is going to push U.S. growth down,” Kapteyn said in an interview with CNBC. “That’s actually going to trigger three Fed cuts, which is way off consensus, right? No one believes that. And of course when the Fed starts cutting, everyone else starts cutting.”
While the Fed doesn’t directly control mortgage rates, its decisions and forecasts influence the bond investors who do. If investors are willing to accept lower yields, that translates into lower mortgage rates.
The Phase One trade deal with China gives partial relief for about a third of existing tariffs and didn’t touch the most punishing ones.
It rolled back tariffs on about $120 billion of goods, mainly consumer items and agricultural products, to 7.5% from 15% enacted in September and it canceled additional tariffs threatened by Trump. However, the 25% tariffs on $250 billion of goods that were put in place in the first 18 months of the trade war remain in place.
Those are the ones that are costing the average U.S. household $831 a year as companies pass on the added costs to consumers, according to a Federal Reserve Bank of New York report. None of the tariffs included in that study were touched in the Phase One trade agreement.
Tariffs have already pushed the U.S. manufacturing sector into recession, Kapteyn said. The question is, what comes next for retail and for the consumer spending that accounts for about 70% of the U.S. economy.
“The issue is what happens with the retail sector, which is where the September tariffs – you’re going to get some relief from those, but those are still feeding their way into the data, and so we think you’re going to see accelerated store closures.”
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Have you noticed a significant decline of lender work over the past few months? Do you want to learn how to get more appraisal orders and finally get off the Appraisal Management Company roller coaster ride for good?
Like many appraisers I have seen a very significant decline in AMC orders over the past few months. I have been kicking myself in the butt for not getting started on my marketing to Attorneys, bail bond companies and credit unions prior to the interest rates going up.
Luckily I have a steady stream of attorney work that keeps me busy due to having a good contact management system in place and a steady client base of bail bond companies that refer their customers to me.
In this book I have detailed the steps that I take to create an inexpensive mailer to get more work from credit unions, attorneys and bail bond companies as well as the systems I use to continually get more referral work from all my past clients.
This is an incredible resource to those appraisers that are really looking to learn how do market your appraisal company and build up your client base so you don’t have to deal with seasonal and economic slow downs. This kind of work never goes away!
Possibly one of the most valuable aspects of this book is the spreadsheets that include:
2500+ Credit Unions
550+ Bail Bond Companies
300+ Direct Lenders
You are going to especially love the Bail Bond marketing information. These orders are amazing and I have been focusing a lot of my efforts to getting more of their referrals. Why?
When I am referred a customer, I quote 3 fees. I base my first fee off of complexity of the appraisal. Lets say it is a standard tract home in San Diego. I quote them $400 and will inspect within 2 working days and have the appraisal report back to them within 2 days. The second fee is to inspect within 24 hours and have back within 24 hours for $800, and finally a same day inspection and deliver of the appraisal is $1200.
Which one do you think the client wants when they are trying to get a loved one out of jail? 75% of the time it is the $1200 fee for a simple tract home appraisal.
But you do have to follow up to keep these clients, and I have listed all the techniques I use to stay in contact with these clients so the work doesn’t go away.
This resource is jammed packed with information and the spreadsheets are 100% sortable by state to make it easy to create your postcard and do your mailing as noted in Chapter 5: Step-by-Step Instructions to Make a Postcard Mailer From Card Design to Mailing
The next chapter lays out the steps I use to get a massive list of Attorneys in my market area by an inexpensive virtual assistant.
Take the time today to order my New Book & Directory – No More Middlemen – Full Fee & Appraisal Managment Free : 2014 Appraiser Marketing Guide and List of 3400+ Direct Lenders, Credit Unions and Bail Bond Companies and finally get off the crappy appraisal management company roller coaster ride for good!
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Conforming loan limit has now increased by nearly $100,000 since 2016
The Federal Housing Finance Agency announced Tuesday that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000.
In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350.
This marks the fourth straight year that the FHFA has increased the conforming loan limits after not increasing them for an entire decade from 2006 to 2016.
In 2016, the FHFA increased the Fannie and Freddie conforming loan limit for the first time in 10 years, and since then, the loan limit has gone up by $93,400.
Back in 2016, the FHFA increased the conforming loan limits from $417,000 to $424,100. Then, the next year, the FHFA raised the loan limits from $424,100 to $453,100 for 2018. And in 2018, the FHFA increased the loan limit from $453,100 to $484,350 for 2019.
And now, loan limits will top $510,000.…continue reading the rest of this post: Fannie Mae, Freddie Mac loan limit increases to more than $510,000
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| https://www.housingwire.com/articles/fha-loan-limits-increasing-for-almost-all-of-us-in-2020/ |
Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020. 11 counties will actually see loan limits decrease
According to an announcement from the FHA, the 2020 FHA loan limit for most of the country will be $331,760, an increase of nearly $17,000 over 2019’s loan limit of $314,827.
That loan limit applies to much of the country, with the figure determined as a percentage of the national conforming loan limit for Fannie Mae and Freddie Mac, which is increasing in 2020 to $510,400.
FHA is required by the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set single-family forward loan limits at 115% of median house prices, subject to a floor and a ceiling on the limits. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county.
FHA’s 2020 minimum national loan limit, or “floor,” of $331,760 is 65% of the national conforming loan limit of $510,400. This floor applies to “low-cost areas,” which are counties where 115% of the median home price is less than the floor limit.
Meanwhile, there are a number of counties (approximately 70) where the median home price far exceeds the FHA loan limit floor. Those areas where the loan limit exceeds this floor are considered “high-cost areas”, and HERA requires the FHA to set its maximum loan limit “ceiling” for those high-cost areas at 150% of the national conforming limit.
Therefore, for those approximately 70 “high-cost” counties, the FHA’s 2020 loan limit will be $765,600, an increase of nearly $40,000 over 2019’s total of $726,525.
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