As Lack of Homebuilding Nears Crisis, Fannie Offers Help

Posted on November 13, 2017 in Uncategorized | Add Your Voice

As Lack of Homebuilding Nears Crisis, Fannie Offers Help
Fannie Mae helps borrowers buy homes. Soon it might help build them, too.

The mortgage-finance giant is considering a series of pilot programs to address an issue that has plagued the real estate market for years: a lack of affordable homes. Fannie’s first initiative, which hasn’t been finalized, would potentially make it cheaper and simpler for prospective home buyers to get loans to construct new residences.

“Everything is about supply right now,” said Jon Lawless, Fannie’s vice president for product development and affordable housing. “With these activities that we’re undertaking, we hope we can find something that finds a fast path to more supply.”

In many cities, home values have surpassed their boom-era peaks. With lots of buyers priced out of the market, there should be incentive to build more homes. But policy makers have struggled to make that happen.

“There are numerous factors contributing to the stalled homebuilding situation we’re experiencing,” according to Justin Burch, Collingwood Group Managing Director of Government Lending. “Any innovative way to jump start home construction, specifically of starter homes, is welcome, but excessively high land, labor, and material costs remain a huge barrier to doing so.”

read more: National Mortgage News

FEMA to start airlifting Puerto Ricans to temporary housing in Florida and New York
With every hotel in Puerto Rico at capacity, the Federal Emergency Management Agency (FEMA) is trying something new: flying displaced Puerto Ricans to the U.S. mainland, where they will live in temporary housing in New York or Florida.

The island is still reeling from Hurricane Maria, with residents across Puerto Rico living without power and clean water. Through FEMA’s Transitional Shelter Assistance program, displaced Puerto Ricans living in shelters will be flown to the mainland, their plane tickets and housing costs covered by FEMA. This is FEMA’s first time doing an airlift following a natural disaster — it typically pays for people who can’t be in their homes to stay in hotels.

read more: The Week

Here’s What’s in the Senate Republican Tax Plan
Senate Republicans on Thursday unveiled a plan which would chop the corporate tax rate and make broad tweaks to the individual tax system. It contains key differences from a bill working its way through the House.

GOP senators contend the tax system overhaul will ease the burden on middle-income Americans while encouraging companies to boost hiring and wages.

Trimming the tax burden on businesses and individuals has long been a Republican goal. With unified control of the White House and both chambers of Congress, the GOP aims to pass a tax reform plan this year, despite lingering challenges.

Issues facing GOP lawmakers include budget deficits generated by the deep cuts, opposition from blue-state House Republicans and backlash from Democrats who say the proposals will not go far enough to help middle-class workers.

read more: CNBC

Los Angeles Now Least Affordable Housing Market in U.S.
According to the latest National Association of Home Builders-Wells Fargo Housing Opportunity Index released this week, San Francisco, which has been the nation’s least affordable housing market for nearly five years, was supplanted by Los Angeles in the third quarter of 2017.

In all, 58.3 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $68,000. This is down from the 59.4 percent of homes sold that were affordable to median-income earners in the second quarter.

“Though builder confidence remains strong, they continue to deal with the long-term repercussions of this devastating hurricane season, which has exacerbated chronic labor and lot shortages and put upward pressure on material and home prices,” said NAHB Chairman Granger MacDonald.

“Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “Tight inventories and a forecast of rising mortgage interest rates through 2018 will keep home prices on a gradual upward path and slowly lessen housing affordability in the quarters ahead.”

The national median home price rose to $260,000 in the third quarter from $256,000 in the second quarter of 2017. Meanwhile, average mortgage rates inched up two basis points in the third quarter to 4.1 percent from 4.08 percent in the second quarter.

read more: World Property Journal

Differences Aside: Homeownership is the American Dream
Amidst political division, there is one value that is shared across the nation—homeownership. According to Zillow’s recently released Housing Aspirations Report, 68.7 percent of Republicans and 65.1 percent of Democrats reported owning a home as a crucial part of living the American Dream.

“In a time of political division, these survey results remind us of something most Americans share—the sense that owning a home is a big part of living the American Dream,” said Zillow Chief Economist Dr. Svenja Gudell. “Homeownership—and its ability to create wealth, stability, and community—doesn’t depend on political affiliation.”

Gudell continued, “As we debate the national and local politics surrounding affordability and tax reform, it’s worthwhile to pause and remember a value most of us can agree on.”

Both Republicans and Democrats also agreed that homeownership is a financially sound decision, even in markets that are setting record-high prices and still recovering from the housing collapse, the report noted. In addition, both parties agree on the advantages of homeownership, including raising a family, making ties within a community, and overall quality of life.

Additionally, National homeownership rates are returning from a historical low point following the housing crisis—proving that despite the recession, sentiment toward homeownership remains positive.

read more: M Report

This 27-Year-Old California Mayor Wants To Pay You $500 Cash Per Month To Live Here
Michael Tubbs is the 27-year-old mayor of Stockton, California.

In October, Tubbs introduced an experimental program to give about $500 per month to all Stockton residents, with no conditions or restrictions.

This program – the Stockton Economic Empowerment Demonstration (SEED) – would make Stockton the first city in the nation to offer universal basic income, which is a system that regularly provides residents with sufficient money to cover basic living expenses.

Tubbs, who was born and raised in Stockton and elected to Stockton’s city counsel at age 22, hopes to launch the program next year and test universal basic income with several hundred Stockton residents.

He hopes the program will alleviate the economic burden that Stockton has faced in recent years, including the city’s bankruptcy in 2013.

read more: Forbes

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