Gov. Probe Into Creating More ‘Affordable Housing’

President Donald Trump has signed an executive order to ease or, in some cases, eliminate rules that have been blamed for blocking greater construction of affordable housing. Home building is near its lowest level in 60 years, contributing to a nationwide housing shortage that has pushed home prices up and hurting affordability.

Trump announced that a newly created initiative called the White House Council on Eliminating Barriers to Affordable Housing Development will use federal programs to find ways to encourage local governments to allow for more building. The council, which will be chaired by Department of Housing and Urban Development Secretary Ben Carson, will also conduct a study to quantify the effect of regulations on the housing market and economy.

Source: “Trump Administration to Take on Local Housing Barriers,” The Wall Street Journal (June 25, 2019) [Log-in required.]

Supreme Court Rules Landowner Can Sue Over Government Access

The U.S. Supreme Court ruled on Friday that property owners can challenge government access to their land, which some view as a major victory for property rights.

The court’s ruling stemmed from a case involving a Pennsylvania woman, Rose Mary Knick, whose land the town of Scott Township used in 2013 to access an old burial ground. Knick didn’t grant the town permission to come on her property, and she sought damages in court for what she viewed as an invasion of her privacy. Local rules, however, require property owners to allow access to private cemeteries discovered on their land.

Supreme Court justices ruled, in a 5-4 opinion, that the woman can now seek compensation in federal court. “A property owner has a claim for a violation of the Takings Clause as soon as government takes his property for public use without paying for it,” Chief Justice John Roberts wrote in the ruling. “The property owner may sue the government at that time in federal court.”

Rates Hover Near 2-Year Lows

Lower mortgage rates are proving to be a boon for home shoppers.

“While the continued drop in mortgage rates has paused, home buyer demand has not,” says Sam Khater, Freddie Mac’s chief economist. “This is evident in increased purchase activity and loan amounts, indicating that home buyers still have the willingness and capacity to purchase homes. Today’s low rates, strong job market, solid wage growth, and consumer confidence are typically important drivers of home sales.”

Freddie Mac reports the following national averages for the week ending June 20:

  • 30-year fixed-rate mortgages: averaged 3.84%, with an average 0.5 point, up from last week’s 3.82% average. Last year at this time, 30-year rates averaged 4.57%.
  • 15-year fixed-rate mortgages: averaged 3.25%, with an average 0.4 point, falling from last week’s 3.26% average. A year ago, 15-year rates averaged 4.04%.
Source: Freddie Mac

Flood Insurance Extension

The Financial Services Committee of the U.S. House of Representatives voted unanimously on Tuesday to approve a five-year extension to the National Flood Insurance Program, the nation’s largest flood insurer. The bill also includes a mandate to improve the country’s flood maps.

Federal law requires the purchase of flood insurance for a federally backed mortgage in special flood hazard areas designated by FEMA. Private flood insurance is also available in many high-risk areas, but the NFIP may be the only option for some.

The bill will now go before the full House for approval. The Senate must be then approve it to bring it to President Donald Trump.

‘New Frontier’ for ‘Healthy’ Homes

Indoor air quality is one of the top five environmental risks to public health, researchers say. After all, most people spend 90% of their time indoors, whether in homes, office buildings, or other structures. Ventilation is the “new frontier for making houses healthy,” Carl Seville of SK Collaborative, a green building consulting and certification firm, told Forbes.com in a recent article.

There’s reason for the added attention. Recent studies have shown indoor air is polluted with lead, dust mites, radon, pests, carbon monoxide, pet dander, mold, and secondhand smoke, according to the National Environmental Education Foundation. Ventilation in the form of bathroom fans and kitchen range hoods can help remove some of the bad air from homes. Older homes, however, may be prone to leaks of these pollutants.

Source: “Why You Should Take Home Ventilation Seriously,” Forbes.com (May 28, 2019)

Planning for Home Ownership?

When is the right time to purchase your first home? The answer differs across age groups, family pressures and life goals.

One in five parents say they expect their child to own a home by age 25, yet this doesn’t match up to reality. Younger adults tend to feel the most pressure to own a home, but they’re still waiting on their own time terms, according to a new survey from Porch.com, a home remodeling website. Porch.com surveyed nearly 1,000 individuals, ages of 18 to 81.

“Purchasing a home is one of the most complex and expensive decisions most of us make, so it’s easy to see how not choosing the right style, location, or size can invoke criticism from relatives,” the report notes. “Of the three generations, millennials felt the least amount of pressure from relatives when it came to housing choices, whereas both baby boomers and Gen Xers felt slightly more judged.”

Source: “Exploring Generational Differences in Life Goals,” Porch.com (June 4, 2019)

Homeowners may ‘Benefit from Refinancing’

A recent sharp drop in mortgage rates hasn’t unlocked savings just for those looking to purchase a home—homeowners may also benefit. About 5.9 million borrowers could see their rates drop by at least 75 basis points by refinancing their mortgages, according to Black Knight, a mortgage software and analytics firm. That is up by 2 million in the past month alone.

That’s the largest population of eligible borrower candidates in nearly three years for savings. The savings could add up to about $271 per month per borrower.

The average 30-year fixed-rate mortgage averaged 3.94% in the latest week.

Home Buyers: Going to the Exurbs

In their search for affordability, home buyers are taking their house hunts further out from the city limits. Exurbs are the outskirts of major metro areas that lie beyond the suburbs. Many offer more land and greater affordability in new-home construction.

Single- and multifamily activity in the exurbs makes up only a small share of permit activity across the country, but their quarterly growth rates reached a new high in the first quarter of 2019, according to the National Association of Home Builders’ new Home Building Geography Index. Single-family permit activity has posted a 5.6% year-over-year growth rate, which is higher than that for large metro areas and suburbs, the index reveals.

Source: “Exurbs Grow During a Weak First Quarter per NAHB HBGI,” National Association of Home Builders’ Eye on Housing blog (May 28, 2019)

Consider Adding a ‘Granny Flat’

Home improvement professionals say they’re fielding more inquiries from homeowners about adding accessory dwelling units—often nicknamed “granny flats.” A fifth of remodeling contractors say they undertook projects over the last year to create an ADU by converting an existing space, and a similar number say they created an ADU by building a new addition to a property, according to a new survey released by the National Association of Home Builders.

ADUs are smaller units added to a property, and they can be pricey to build. Only 6 percent of remodeling contractors report completing an ADU project for less than $25,000. Three-fourths say ADU projects cost at least $50,000, and 28 percent report projects costing at least $150,000.

Source: “Many Remodelers Are Now Creating ADUs,” National Association of Home Builders’ Eye on Housing blog (May 22, 2019)

Who Needs to Downsize?

A growing number of baby boomers are choosing not to downsize in retirement. Instead, they’re opting to remain in the homes where they raised their children, USA Today reports. But their reluctance to move is contributing to low inventory across the country, says realtor.com® Chief Economist Danielle Hale.

Baby boomers “have refused to follow what the traditional expectations were,” Barbara Risman, a sociology professor at the University of Illinois at Chicago, told USA Today. Baby boomers, mostly between the ages of 54 to 73, are working longer and, therefore, putting retirement off longer than previous generations. Their millennial children increasingly are living at home with them and staying well into adulthood.

For baby boomers who do plan to move, 43% say they want their next home to be the same size as their current one. Twenty-two percent say they want their next home to be even larger, according to a January surveyof 50- and 60-year-olds by Del Webb.