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US housing starts rebounded in June

Chris Kunitz, Sidney Crosby, Justin Schultz, Ian Cole - US housing starts rebounded in June

US housing starts rebounded in June 2017 as homebuilders ramped up construction

WASHINGTON/July 19, 2017 (AP)(STLRealEstate.News) — Home-builders ramped up construction in June to the fastest pace in four months, led by surges in the Northeast and Midwest.

Housing starts climbed 8.3 percent in June to a seasonally adjusted annual rate of 1.22 million, the Commerce Department said Wednesday. The gain ended three straight monthly declines and marked the strongest pace of building since February. Home construction has risen 3.9 percent year-to-date, but that slight increase has been unable to make up for the decrease in existing homes being listed for sale.

The June housing figures point to healthy demand that new construction alone has been unable to satisfy.

Fewer existing homes are being listed for sale, while purchase prices for newly built homes have surged at pace more than six times wage growth. As a result, more Americans are rushing to purchase homes but are struggling to do so because of a lack of supplies and higher costs.

Builders also face higher costs for land and materials, putting a limit on just how much construction can occur.

“Steady gains in construction are expected over the next year, supported by still-strong fundamental demand for housing,” said Jennifer Lee, a senior economist at BMO Capital Markets. “But acting as a bit of a roadblock are problems that the builders face: rising lumber costs, and shortages of labor and lots to build on, which will boost pricing.”

So far this year, builders have turned their attention toward single-family houses and away from rental apartments. Starts of single-family houses have risen 7.9 percent, while construction of multi-family buildings has slipped 4.2 percent.

Housing starts jumped a stunning 83.7 percent in the Northeast and 22 percent in the Midwest, growth that is unlikely to be sustained. The government’s home construction report can be volatile on a monthly basis. Sales edged up in the West but declined in the South.

Building permits, an indicator of future construction, were up 7.4 percent to 1.25 million.
Construction firms are confident that demand will continue, but they have also begun to temper their expectations.

The National Association of Home Builders/Wells Fargo builder sentiment index fell to 64 in July, the lowest level since November. Readings above 50 indicate more builders view sales conditions as good rather than poor.

The median price of a new home sold in May rose 16.8 percent from a year ago to a record $345,800. Prices have been increasing as demand has outstripped supply of new homes, in part because of a shortage of available building lots.

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By JOSH BOAK, AP Economics Writer

St. Louis factories wait for Trump steel tariff

St. Louis factories wait for Trump steel tariff - STLRealEstate.News

St. Louis factories anxiously await for Trump steel tariff

ST. LOUIS, MO/July 16, 2017 (STLRealEstate.News) The United States Steel Corp.’s Granite City Works have been sitting idle for the last 18-months as laid-off workers are pinning their hopes on Donald Trump’s new tariff restrictions for imported steel, which is currently running Americans out of business.  However, just across the Mississippi River, other steel manufacturers worry that these new tariffs and curbs will raise their costs and make it harder to compete with foreign rivals.  The inherent and apparent conflict is at the heart of the debate inside the administration that lobbyists and lawmakers say could delay or weaken any protections recommended by the U.S. Department of Commerce.

The reviews findings, which were originally expected by the end of June, could be unveiled at any time in the coming weeks.  For decades, since the end of the Cold War, American companies competing against China, which is flooding the world steel market with access production, have been unable to meet the mark.  According to the Bureau of Labor Statistics data compiled by the libertarian Cato Institute, steel mills and the steel production factories that now employ more than 140,000 people, compared to the 6.5 million steel-reliant manufacturers ranging from autos and appliances to machinery.  There’s a lot of room for American steel facilities to step up and supply these companies.

In Granite City today, where about 1,200 of the U.S. Steel plant’s 1,800 workers remain laid off despite the recent restart of some rolling mill operations, the feeling is one of optimistic anticipation for a brighter future.  “We’re waiting on the 232 to get us back to work,” said Chris Bragg, who was laid off in November 2015 when steel imports surged and oil prices cratered.  The result was a slashing demand for the mill’s main product, hot-rolled steel for oil and gas drill pipe.  Since then, Bragg has been working in construction from home, hopeful for a brighter future.

Buffett’s company buys 10 pct of real estate investment firm

Buffett's company buys 10 pct of real estate investment firm

OMAHA, Neb./June 26, 2017 (AP) (StlRealEstate.News) — Warren Buffett’s company is spending $377 million to pick up 9.8 percent of a real estate investment trust called Store Capital.

The Scottsdale, Arizona, based real estate firm announced Berkshire Hathaway’s investment on Monday.

Berkshire bought 18.6 million shares of Store Capital for $20.25 per share in a private placement sale.

Store Capital’s stock jumped nearly 11 percent to $23 after the investment was announced Monday.

Berkshire is a conglomerate based in Omaha, Nebraska, that owns more than 90 companies, including Berkshire Hathaway Home Services. It also owns Geico insurance, BNSF railroad and several major utilities.

Housing Tides Index™ June 2017 – Housing Data Shows Improvement as Mortgage Delinquencies and Foreclosures Fall

Housing Tides Index™ June 2017 – Housing Data Shows Improvement as Mortgage Delinquencies and Foreclosures Fall to New Lows

DENVER, COLORADO/JUNE 15, 2017 (STLRealEstate.News) This week marks the release of the June Housing Tides Report™, featuring an update to the Housing Tides Index™, an objective and sophisticated approach to quantifying and comparing the health of U.S. housing markets. This month’s Index update reveals an improvement in housing market health as loan performance improved to the best levels in nearly a decade.

Understanding the health of a housing market and its relationship to other top markets requires an aggregated, comprehensive view of the industry. The Housing Tides Index provides a succinct monthly measure of market health across the top 41 U.S. markets. Referencing 18 market indicators ranging from unemployment rates and housing permits to rental vacancy and mortgage foreclosure rates, the Tides Index helps users understand exposure at a deeper level than is currently possible.

Black Knight Financial Services (BKFS) recently reported that the mortgage delinquency rate fell to 3.62% in March, and a review of historical U.S. mortgage delinquency data provided by the Federal Reserve Bank of St. Louis shows that this is the lowest rate of mortgage delinquency since late 2007. This continues the trend of mortgage market normalization, though delinquencies have not yet fallen to their pre-recession level of less than 3% of borrowers delinquent. On a similar note, BKFS reported a fall in the foreclosure rate to 0.88% of all mortgages, which is also a multi-year low. However, considerable differences in foreclosure rates remain among U.S. states. States with a judicial foreclosure process where proceedings must go through a court still have far higher foreclosure rates; judicial states New York and New Jersey had rates over 2.5% in March per the BKFS report, while non-judicial states Colorado and California recorded foreclosure rates of 0.2% and 0.3%, respectively.

After falling at the end of 2016, median asking rents for two-bedroom units have risen in two straight months according to latest data from Zillow. Still, with the asking rate at $1,575 per month nationally in April, rents remain below the peak of $1,750 seen June 2014. We expect rent price increases to ease in the near term given the high number of rental units under construction (U.S. Federal Reserve data show 612.1k housing units in buildings with five or more units under construction in April, the highest total since late 1974).

However, despite the large number of apartments approaching completion, upward pressure on rental prices should continue due to persistent tightness and rising prices in the for-sale market. Real estate brokerage Redfin reported that housing supply edged up slightly to 3.1 months of supply nationally in April while the median sales price reached a new high of $280k. 26 of the 41 metro areas tracked by the Tides team set new highs for nominal post-recession median sales price in April.

The Federal Housing Finance Agency reported that the U.S. effective mortgage interest rate for loans closed decreased to 4.1% in April after peaking at 4.4% in February. As such, mortgage interest rates are higher than the recent low of 3.72% seen just prior to the presidential election, though rates remain favorable when compared to the historical norm.

Single-family housing permits fell sharply in aggregate across the metro areas we track, totaling just 35,600 in April after reaching 40,100 in March. Multi-family permits increased in April, totaling 24,200, but the six-month moving average fell slightly to a rate of 23,500 permits per month.

About Housing Tides

Housing Tides™ (“Tides”) is the only monthly report that provides a comprehensive measure and aggregated understanding of the health of the U.S. housing and home building industry. Designed to take the guesswork out of the vast amount of forecasting information published about this sector, Tides is a sophisticated report that delivers city-specific, updated information when market conditions change. It is the only report that uses natural language processing and machine learning to correctly understand and synthesize large volumes of data, making it more comprehensive, balanced, and reliable than any other report of its kind.

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Source: Housing Tides Report

Press Release distributed by PRWeb

Idaho woman seeks compensation for leveled home

Idaho woman seeks compensation for leveled home

BOISE, Idaho/June 12, 2017 (AP) (StlRealEstate.News) — An Idaho woman rented her home to a man she thought had plans to buy it. He instead demolished it.

The Idaho Statesman reported (http://bit.ly/2rjmQcB ) Sunday Shammie Fisher is fighting in court to get compensation for her ruined Boise home.

Idaho Supreme Court sided with Fisher in May in her appeal of a lower-court ruling that her insurance company did not have to cover the loss. The court sent the ruling back to the district court for reconsideration.

After she got married, Fisher decided to sell her 1,152-square-foot (107 sq. meters) house.

Ron Reynoso signed a one-year purchase agreement in January 2012, allowing him to rent the home with the expectation of buying it.

Reynoso essentially planned to flip the house by March 31, 2013.

Reynoso then leveled the place.

 

Ever wanted to live in 2 nations at once? Here’s your chance

Ever wanted to live in 2 nations at once? Here's your chance

BEEBE PLAIN, Vt./June 10, 2017 (AP) (StlRealEstate.News) –For sale: A 1782 fixer-upper with thick granite walls, 1950s decor, and armed 24-hour security provided by both Canada and the United States of America.

The almost 7,000-square-foot house, cut into five currently vacant apartments, is on a lot of less than a quarter-acre that, along with the building itself, straddles the border between Beebe Plain, Vermont, and Stanstead, Quebec.

Selling a home in two countries is proving to be a challenge for the couple who owns it. The structure, which has an estimated rebuild cost of about $600,000, is on the market for $109,000. It’s structurally sound but needs lots of work. And then there’s that international border.

“In the day, it was a normal and natural thing,” Brian DuMoulin, who grew up in the house and was accustomed to life literally on the border at a time when no one thought twice about crossing from one country to the other. “Now it stresses everyone out.”

The home, known locally as the Old Stone Store, was built by a merchant so he could sell to farmers in both Vermont and Quebec. Brian and his wife, Joan DuMoulin, inherited it about 40 years ago.

Now the couple, in their 70s, who have dual U.S. and Canadian citizenship and a home in nearby Morgan, Vermont, are hoping to sell it so they can move to Ontario to be closer to their children and grandchildren.

Beebe Plain is a community in the Vermont town of Derby, which along with Stanstead, about 60 miles (96 kilometers) northeast of Montpelier, or 75 miles (120 kilometers) southeast of Montreal, have become the cliché of security changes on the U.S.-Canadian border brought on by the 9/11 attacks on the United States.

Residential streets that used to be open were blocked by gates. The back doors of an apartment building straddling the border in Derby Line village have been locked shut. The street next to the Haskell Free Library and Opera House, deliberately built in both countries, is blocked by flower pots, although Canadians are still allowed to walk to the library’s U.S. entrance without going through a border post.

The DuMoulins’ house is directly across Stanstead’s Rue Principale from the port of entry staffed by agents of the Canada Border Services Agency and adjacent to a U.S. Customs and Border Protection post.

Troy Rabideau, the U.S. Customs and Border Protection assistant port director for the area that includes Beebe Plain, said the agents know who live there, but keeping track can be a challenge.

By WILSON RING ,  Associated Press

Kentucky governor faces second ethics complaint over home

Kentucky governor faces second ethics complaint over home

LOUISVILLE, Ky./June 6, 2017 (AP) (StlRealEstate.News) — Kentucky Gov. Matt Bevin was hit with a second ethics complaint, this time from a Democratic lawmaker, over questions about the purchase of the Republican’s personal home.

State Rep. Darryl Owens filed the complaint recently against Bevin and Neil Ramsey, an investment manager and Bevin campaign donor who sold the home where Bevin and his family live.

In his complaint to the Kentucky Executive Branch Ethics Commission, the Louisville lawmaker said it appears the governor “personally enriched himself by at least a million dollars” when comparing the sale price with the assessments of the Louisville-area home and property.

Bevin and Ramsey maintain the home sold at a fair market price.

“This whole thing creates an air of ethical challenge, and I just want the ethics commission to take a look at it,” Owens said in a phone interview Monday. “There is something about this relationship and the transactions which I think warrant a review.”

Bevin spokeswoman Amanda Stamper denounced it as another “frivolous, politically motivated” complaint. She added a warning: “Complainants like these should be aware of the penalties of perjury and making false ethics violation claims.”

Owens’ filing follows a similar complaint made last month by the head of a Kentucky government watchdog group. Both complaints ask the ethics commission to investigate details of the transaction for the mansion where Bevin and his family live.

Bevin last month referred to the first complaint as political “mumbo jumbo.”

The governor bought the home and 10 acres in March for $1.6 million from a Ramsey family company, The Courier-Journal has reported.

Bevin has said he purchased the home through a limited liability company for liability and estate planning purposes, not to try to hide anything. Owens’ complaint, however, questioned whether the LLC was created in hopes of “shrouding the ownership.”

The governor appointed Ramsey to the Kentucky Retirement Systems governing board last year. Ramsey did not return a call to the KRS office Monday, but Bevin recently defended him as “a guy who is doing nothing but serving the people of Kentucky.”

As for Ramsey’s appointment to the KRS board, Bevin said at the time: “You think that’s a lottery pick?” Kentucky is struggling to plug a massive shortfall in its pension system.

Bevin purchased a portion of the property that includes the house.

The Jefferson County property valuation administrator valued the entire 19-acre tract at $2.97 million, The Courier-Journal has reported. Officials in the Louisville suburb of Anchorage valued the same property at $2.2 million, the Louisville newspaper said.

Bevin has appealed the Jefferson County appraisal.

His attorney, Richard Hornung, said the Anchorage valuation “appears to be much more accurate.” He said the $1.6 million purchase price for the home and 10 acres “is a very realistic and fair price” when factoring in easements and deed restrictions on that part of the property, and when considering the value of the property not purchased.

BRUCE SCHREINER, Associated Press

Ways homebuyers can leap the down payment hurdle

Ways homebuyers can leap the down payment hurdle

LOS ANGELES/May 31, 2017 (AP) (StlRealEstate.News) — Saving up for a down payment is the biggest hurdle for many would-be homebuyers, particularly those looking to make the leap from renting to owning.

More than two-thirds of renters consider setting aside money for a down payment the No. 1 obstacle to buying a home, according to a recent survey by real estate data provider Zillow. That edged out other concerns, including job security and a thin supply of homes on the market.

While there are home loans that require as little as 3 percent down, rising home prices, especially in expensive coastal states, keep driving up the amount of money buyers need to come up with for a down payment.

Even so, many first-time buyers are managing to save enough on their own. Some 76 percent used their savings to fund their down payment last year, according to the National Association of Realtors.

Here are some tips to consider when working toward that down payment on a home:

START SOON

Begin saving now. Renters may want to calculate what their extra monthly costs would be as a homeowner and then set aside that amount, minus rent and utilities. This accomplishes two goals: Saving money for a down payment and getting you accustomed to the financial constraints of living with the costs of homeownership.

Another strategy that may help: open a separate savings account just for your down payment. That will help lessen the temptation of using the funds for something else.

You’ll also have to set aside money for closing costs, which can run into the hundreds or thousands of dollars.

WEIGH LOAN OPTIONS

The type of home loan you get may determine how much of a down payment you need. For many years, buyers sought to put down 20 percent of the purchase price. That would lower their monthly mortgage payment and allow them to avoid having to pay for private mortgage insurance, or PMI. But as home prices have risen, that trend has waned. Loans that require as little as 3 percent up front have become more common. As a result, the median U.S. down payment has declined to 10 percent the past four years, according to the NAR.

“The housing market is not a matter of 20 percent down payment or bust,” said Greg McBride, chief financial analyst at Bankrate.com. “You can get into a house with a low down payment, but you’re going to have to come up with the money for closing costs.”

Lenders offer loans backed by government mortgage companies Fannie Mae and Freddie Mac that require only a 3 percent down payment. Borrowers can ask to have their PMI waived once the equity in their home reaches 20 percent.

Borrowers with less-than-sterling credit may have a better shot qualifying for loans backed by the Federal Housing Administration. The FHA’s program requires 3.5 percent down, but borrowers have to refinance once their equity grows above 20 percent in order to get out of paying PMI. Until then, PMI is tax-deductible.

Buyers may not need to save for a down payment at all if they are U.S. military veterans, servicemembers or residents of certain rural areas. The Department of Veterans Affairs and the U.S. Department of Agriculture have zero-down payment loan programs for qualified borrowers.

EXPLORE OTHER OPTIONS

Saving for a down payment sometimes takes more than cutting back on dining out or travel. A quarter of first-time homebuyers in 2016 used gift money from relatives or friends to round out their down payment, according to the NAR. And more than 10 percent tapped their retirement savings without the usual hefty penalties for an early withdrawal. Of course, before withdrawing money from your 401(k) or IRA accounts consider that a big withdrawal will mean your retirement savings won’t grow as swiftly.

Borrowers with low or moderate income, and teachers, firefighters or other public service job holders may also qualify for down payment assistance through thousands of federal, state or local programs aimed at helping homebuyers.

There are more than 2,100 funded programs, many of which help cover the down payment and closing costs through loans that can sometimes be forgiven over time, or paid back only once the buyer sells the home, according to Down Payment Resource, a tracker of homebuyer assistance programs.

CONSIDER USING HOME EQUITY

A newer approach to coming up with a down payment involves letting investors put up some of the money in exchange for a slice of the potential value in the home.

San Francisco-based Unison now has a program available in 12 states and the District of Columbia that offers to match up to half of a 20 percent down payment on a home. The match isn’t a loan, in that the buyer doesn’t have to make payments, but still benefits from the lower cost of making a 20 percent down payment.

There are several payback scenarios, but essentially the company collects a 35 percent share of the gain, if any, in the sale of the home. Should the home decline in value, the company also shares in the loss, potentially receiving less money back on its original investment.

If the homeowner hasn’t sold the home after 30 years, a property appraisal is used to determine how much Unison gets paid. The homeowner also has the option to buy out Unison any time after their third year in the home. Unison also doesn’t share in the equity that the homebuyer builds as they pay down their mortgage or from investments, like a kitchen remodel.

“There’s a very clear trade off here in that you are surrendering future equity,” said McBride, noting that home equity is increasingly becoming Americans’ principal way to fund their retirement. “So, look yourself in the mirror and make sure that you’re not potentially shortchanging your future financial security just to get into a slightly more expensive home now.”

The possibility of losing a big slice of her home’s future value didn’t put off Courtney DeAnda from using Unison to double the $52,000 down payment on a home this month.

She and her husband, James, who have three kids, recently entered escrow on a five-bedroom, three-bath house in Vacaville, California, for $468,000. The couple expects to save $417 a month on their mortgage payment by using the Unison program.

“It’s a price to pay to help us get into a home that we really love,” said DeAnda, 28. “We really don’t see much of a negative with using it.”

ALEX VEIGA, AP Business Writer

US home prices rising 2 times faster than wages

US home prices rising 2 times faster than wages

WASHINGTON/May 30, 2017 (AP) (StlRealEstate.News) — U.S. home prices climbed in March at the strongest rate in nearly three year as a dwindling supply of houses for sale is causing prices to significantly outpace income growth.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index released Tuesday rose 5.9 percent over the past 12 months ended in March, the most since July 2014. Home values are increasing at more than double the pace of average hourly earnings, making it more difficult for many people to afford to buy a home.

“Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “People are staying in their homes longer rather than selling and trading up.

A steady job market has bulked up demand among many would-be buyers, but there are fewer properties on the market. Sales listings have plummeted 9 percent over the past year to 1.93 million, according to the National Association of Realtors. The shortage of homes to buy has caused prices to rise sharply in many metro areas.

The largest annual gain was in Seattle, where prices have surged 12.3 percent. Portland, Oregon recorded a 9.2 percent increase, while Dallas prices rose 8.6 percent.

Of the 20 cities in the index, the weakest gain was in New York City_an area where home prices are already high relative to median incomes. Home prices in New York City have risen 4.1 percent in the past year, still much higher than U.S. average hourly earnings that have increased 2.5 percent over the past 12 months, according to the Bureau of Labor Statistics.

JOSH BOAK, AP Economics Writer

Average US 30-year mortgage rate falls to 3.95 pct, 2017 low

Average US 30-year mortgage rate falls to 3.95 pct, 2017 low

WASHINGTON/May 25, 2017 (AP) (StlRealEstate.News) — Long-term U.S. mortgage rates fell this week to their lowest levels of the year. The benchmark 30-year rate dipped below the key 4 percent mark.

Mortgage buyer Freddie Mac says the average rate on 30-year fixed-rate home loans tumbled to 3.95 percent from 4.02 percent last week. The rate stood at 3.64 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.

The rate on 15-year mortgages slipped to 3.19 percent from 3.27 percent last week.