|Collingwood’s Tim Rood Speaks About the State of the Housing Market
On Monday morning, The Collingwood Group Chair Tim Rood spoke with Maria Bartiromo on Fox Business to discuss the state of the housing market.
Here are the three factors he thinks will dictate the spring season:
2) The Tax Law
watch the video: Fox Business
Hot Housing Market: Home Buyers Are Spending More Than Expected
Home buyers are busting budgets — and in some cases selling things they love — to snag their dream houses.
A third of home buyers blew through the upper limit of what they planned to spend, topping that cap by an average $16,510, according to a Owners.com survey of 1,214 Americans who purchased a house within the last four years. The survey was conducted Jan. 31 to Feb. 8.
The main reason? Price. Price. Price.
“Clearly, we’re in an environment of rising prices,” especially for starter homes, says Daniel Maloney, national head of sales for Owners.com, a real estate brokerage.
Many houses on the market are drawing multiple offers, forcing buyers to bid up.
In January, home prices nationally were up an average 6.2% from a year earlier, according to the S&P CoreLogic Case-Shiller home price index. Prices have risen nearly 50% from their 2012 bottom. Supply shortages, combined with a healthy job market that’s fueling demand, are blamed for the recent price run-up.
Many house hunters who set a price range think little of going beyond it to be closer to work or in a desired neighborhood, says Dario Cardile, vice president of growth marketing at Owners.com.
read more: USA Today
For the First Time Ever, Young Americans Have Less Consumer Confidence Than Their Parents
Consumer sentiment may have reached the highest level since 2004, but millennials are now less optimistic than baby boomers.
That’s the first time Americans younger than 35 say they actually have less consumer confidence than those aged 55 and over, according to data from the University of Michigan, Haver Analytics and Deutsche Bank Global Research. This hasn’t happened in the last six decades that the consumer sentiment of these two generations has been compared.
Millennials shoulder more student loan debt than any other generation and face house prices that are far higher than their parents did at their age. Student loan debt has reached $1.4 trillion as the cost of college has soared. And spending no more than 30% of their income on rent or a mortgage, a golden rule for decades, is near-impossible for many young Americans.
The fortunes of both generations are inextricably tied. Your parents’ income helps determine your future. Children raised in low-income American families will likely also have low incomes as adults, while children raised in high-income families can anticipate a much bigger jump in income, according to “Economic Mobility in the United States,” produced by researchers at Stanford University. It was funded by the Pew Charitable Trusts, a nonprofit public-policy organization.
read more: MarketWatch
Is There Hope for California’s Housing Crisis?
Ellen Tara James-Penney is passionate about her job. An adjunct English professor at San Jose State University since 2014, she enjoys challenging her students to think outside the box. They have dubbed her “Professor E” and enjoy her style of teaching.
But when people learn that James-Penney is homeless, living in her Volvo with her husband, Jim, and two dogs, they are stunned.
Her husband cannot work due to a severe back injury. They shower at the Jewish Community Center in San Jose and because of the neighborhood watches that were enforced last June, they sleep outside Grace Baptist Church, with James-Penney in the car and her husband in a tent. With the average monthly rent for a one-bedroom apartment going for $1,800 in the city, they simply can’t afford it.
“We can’t keep living this way; I’m exhausted and we’re barely hanging in there,” she says.
James-Penney used to work in the high-tech industry before she was laid off and decided to go back to school to earn her Master of Fine Arts degree. She is $151,000 in debt from student loans and her income depends on how many classes she teaches per semester. The maximum number of classes an adjunct professor can have is four, which for James-Penney yielded about $3,100 a month last semester. This semester she teaches only three classes.
read more: US News
Cashing Out Through Refinance
Cash-out refinancing is being increasingly used by borrowers and homeowners looking to renovate their homes, consolidate debt, make a purchase, or even as a down payment for a second home, according to a study by LendingTree.
According to the data of this study, cash-out refinance loans have risen to 62 percent of all refinancing in the first quarter of 2018 from 54 percent during the same quarter last year. To find out which cities and regions had a greater ability to access cash through refinancing a mortgage, LendingTree analyzed mortgage requests and offers for refinance borrowers between March 1, 2017, and March 1, 2018, based on the location of the property to be mortgaged.
It then based the rankings on the percentage of total refinance mortgage funded that included a cash-out portion of the loan. Albany, New York had the highest share of cash-out borrowers with an average loan amount of $166,504 and 73 percent of the refinance mortgages funded with a cash-out portion, the study indicated.
In the second place, Portland, Oregon, had 72 percent of refinance mortgages being funded with cash-out portion and was tied with Cape Coral in Florida on the percentage. However, the average loan amounts varied with Portland and Cape Coral recording average loan amounts of $266,152 and $162,975 respectively.
read more: MReport
Trump’s Consumer Watchdog Proposes to Trim Agency’s Power
The head of the U.S. Consumer Financial Protection Bureau asked Congress on Monday to trim the agency’s power to write rules and spend money.
Mick Mulvaney, the head of the CFPB, said the agency has the kind of power that should only rest with Congress.
“The Bureau is far too powerful, with precious little oversight of its activities,” Mulvaney told Congress in a routine report.
“The power wielded by the director of the Bureau could all too easily be used to harm consumers, destroy businesses, or arbitrarily remake American financial markets.”
President Donald Trump tapped Mulvaney to lead the CFPB in late November. While Mulvaney is supposed to lead the agency on an interim basis, there is no deadline for when he must step aside for a permanent director.
Mulvaney recommended four ways to curtail the CFPB’s power.
The CFPB should get its funding through Congress rather than the Federal Reserve, according to the proposal. Congress should have veto power over CFPB rules and the agency should more directly answer to the president.
read more: Reuters
Time’s Up: GSE Reform Won’t Happen This Year
It was always going to be an uphill struggle to pass housing finance reform this year. But it now appears to be downright impossible.
When draft Senate legislation — based on talks between Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va. — leaked back in January, observers had warned the effort would need to quickly pick up steam in order to have a prayer of enactment ahead of the midterm elections this November.
Instead, momentum has been moving in the wrong direction.
The sharp debate over the Senate’s banking relief bill this past month has renewed doubts that a bipartisan consensus on housing can be reached anytime soon, according to sources tracking the negotiations. Crucially, the relief legislation pitted moderate Democrats, who are backing the bill with Republicans, against their more progressive colleagues. The fight proved tougher — and more personal — than many predicted. That makes the chances of winning moderates over on yet another controversial deal, this time over resolution of the government-sponsored enterprises, remote at best.
“The regulatory relief effort has taken more time and left more bruised egos than anyone expected at the outset of this Congress, which has left Democrats uneager to delve into the far more complicated and contentious debate over GSE reform,” said Isaac Boltansky, director of policy research at Compass Point Research & Trading.
read more: National Mortgage News
Looming China Trade Action Divides Industry and Roils Markets
President Trump’s promise to take tough action against China’s unfair economic practices was one of his most popular campaign ideas. But as the United States prepares stiff trade measures and China retaliates, stock markets have plummeted and some of America’s biggest companies are pushing back.
Industry giants like General Electric and Goldman Sachs, as well as agricultural companies, have lodged objections with the White House, saying that tariffs on both sides of the Pacific and limitations on investments will cut off American companies from the world’s most lucrative and rapidly growing market.
China imposed tariffs on Monday on more than 100 American products, including pork, fruit, recycled aluminum and steel pipes. Fears of an incipient trade war between the world’s two largest economies sent the Standard & Poor’s 500-stock index tumbling 2.23 percent and pushed markets into correction territory. Technology stocks bore the brunt of the slump, as a recent spate of bad news about tech companies like Facebook, Tesla and Amazon spooked investors. Asian and European markets fell more modestly in early Tuesday trading.
China’s action could be an escalation in a much broader trade dispute. The announcement was a direct response to the Trump administration’s tariffs on imports of steel and aluminum, which were directed at a range of countries, including China.
read more: NY Times
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