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News, Information & Hot Issues
[ GOVERNMENT ]
C.A.R. Supports $1.3 Billion Affordable Housing Proposal
The Board of Directors of the CALIFORNIA ASSOCIATION OF REALTORS® recently voted to support a $1.3 billion proposal by California Assembly members to create affordable housing programs.
“With a historically low homeownership rate of 54 percent and record high rental costs, the dream of owning a home in California is evaporating. Our teachers, nurses, firefighters, police officers, and other middle class workers should be able to afford to live in the communities they serve,” said C.A.R. President Pat “Ziggy” Zicarelli. “C.A.R. recognizes the urgency of California’s housing crisis and is fully supporting the proposal by the Assembly Housing and Community Development Committee to invest a portion of our state’s budget surplus to address this housing crisis.”
C.A.R. formed an Affordable Workforce Housing Task Force in August 2015 to examine existing policies in California designed to expand the availability of “affordable housing” and to make recommendations to increase the availability of affordable workforce housing in California.
[ THE NUMBERS ]
Homeownership Rate Down
Last year saw housing sales improve tremendously, according to data from the CALIFORNIA ASSOCIATION OF REALTORS® and NATIONAL ASSOCIATION OF REALTORS®. Despite those gains, the Department of Commerce’s Census Department figures from first quarter 2016 show that U.S. homeownership fell to 63.5 percent–near the 48-year low of 63.4 percent in the second quarter of 2015.
Toward the end of 2015, economists said that homeownership rates appeared to have stabilized and predicted a modest uptick, according to a Wall Street Journal analysis. However, the Journal noted that “some economists caution against reading too much into such a statistically small change in quarterly estimates.” That’s because homeownership is essentially flat and the drop from the previous quarter ( a seasonally adjusted 63.7 percent in the fourth quarter of last year) is fairly small.
Newscan
Business Briefs & Bottom-line Boosters
Helping Struggling Homeowners
The Federal Housing Finance Agency (FHFA) recently announced that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes. The new Principal Reduction Modification program is a one-time offer for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria.
HUD Renting Guidelines
Private landlords cannot implement blanket bans on would-be renters with an arrest or criminal record. If so, they are in violation of the Fair Housing Act and can face penalties or a lawsuit for discrimination, according to the Department of Housing and Urban Development.
CalHFA Program Expansion
The California Housing Finance Agency has a new program change that could help more California households qualify for CalHFA Conventional mortgages. Families who earn up to 120 percent of their county’s median income were eligible for CalHFA loans, though home prices in several communities throughout California exceed what the median income household can afford. CalHFA identified 35 California counties that have the greatest disparity between housing costs and household incomes. As a result of those findings, the program now raises the maximum qualifying income in these counties to 140 percent of the median income.
[ POLICY ]
Housing Panel Takes On Affordability
Housing affordability remains a pressing problem in the state of California, and the urgency for policy solutions has only grown as social consequences pose significant threats to the state’s future prospects. To spur discussion on potential solutions for housing affordability, the CALIFORNIA ASSOCIATION OF REALTORS®’ Center for California Real Estate (CCRE), an institute dedicated to advancing real estate knowledge, presented a panel discussion in partnership with the University of California Center Sacramento.
Michael Lens, assistant professor of Urban Planning in the Luskin School of Public Policy at UCLA, and Kerry Vandell, director of the Center for Real Estate at the UC Irvine Merage School of Business, provided an overview of the extent of the problem and what is at stake for California—beyond basic economics—if affordability hampers workforce diversification, equality of opportunity, and economic mobility, among other factors. Both professors called attention to the lack of policy solutions that focus on growing income rather than merely reducing prices. They agreed that both the costs of housing and the ability of people to afford it are equally deserving of policy prescriptions.
CCRE is a platform for the CALIFORNIA ASSOCIATION OF REALTORS® to engage experts on the issues that matter most to the real estate industry, thereby ensuring CCRE, and by extension C.A.R., arms its 180,000 members with ideas that help them become more knowledgeable, professional, and insightful in their work as practitioners and stakeholders in the future of real estate.
[ GENERATIONAL TRENDS ]
The Bank of Mom and Dad
According to Fannie Mae’s National Housing Survey®, half of young renters cite affording a down payment or closing costs as the biggest obstacle to obtaining a home purchase loan. A new study examined parental financial assistance to see how much they affect younger Americans’ ability to purchase a home. “The Role of Parental Financial Assistance in the Transition to Homeownership by Young Adults” found that the probability of becoming a homeowner jumps 23 percent among adult children who receive a money transfer from their parent.
Professors Dowell Myers, Gary Painter, and Julie Zissimopoulos of the University of Southern California analyzed two data sets—the Panel Study of Income Dynamics (PSID) and the Health and Retirement Survey (HRS)—that provide information on parental financial transfers, adult children’s transitions into homeownership, and a variety of child and parent demographic, social, and financial characteristics.
The working paper shows that only about one in 17 adult children between the ages of 20 and 49 and who are not already homeowners receive substantial parental financial assistance. The likelihood of receiving parental assistance varies substantially with the age, race, and ethnicity of the child and with the wealth of the parent.
[ COMMUNITY OUTREACH ]
Get Involved With the Boys & Girls Club
Earlier this year, the NATIONAL ASSOCIATION OF REALTORS® began collaborating with Boys & Girls Clubs of America in an effort to strengthen communities and support the country’s youth.
Every local Boys & Girls Club has specific needs, so local and state associations of REALTORS® and their members are encouraged to work with their local club to determine the best way to volunteer and offer resources to have the greatest impact.
Learn More > Learn more about how you can get involved at http://bit.ly/1Wt9uDr
[ HELPING POTENTIAL BUYERS ]
Expanding Ownership Opportunities Through FHA Programs
California’s rapid rate of house price appreciation, coupled with the lack of affordable inventory, is in the process of creating a serious housing crisis. Throughout the United States, around 10 percent of condominium associations are certified by the Federal Housing Administration.
In 2015, pilot programs were conducted with The Beverly Hills/Greater Los Angeles Association of REALTORS® (BHGLAAR) and the South Bay Association of REALTORS® (SBAOR) to increase Housing and Urban Development (HUD) certification for condo complexes. The program saw an opportunity to expand ownership and strengthen communities.
Annette V. Graw, a REALTOR® and the vice chair of C.A.R.’s Affordable Workforce Housing Task Force, noted the importance of working with committed lending partners, such as Wells Fargo which participated in their program. She also explained that it is possible to strengthen certification, including Veterans Affairs (VA) certification for condos, through education and targeting complexes without the credentials. “This is a niche that is being underserved in our communities,” she told California Real Estate.
Onerous regulations have meant that 60 percent of condominium associations that sought certification in 2013 were denied by the HUD.
“We found that a lot of HOAs have a perception that an FHA loan recipient is formerly homeless,” said Irma Vargas, REALTOR® and chair of the Housing Affordability Fund. “FHA is for teachers, nurses, and veterans. It’s for the people who work in their communities every day.”
By increasing the number of condominium complexes certified by HUD for either VA or FHA financing, more underserved borrowers will have access to mortgages to finance affordable homeownership, Vargas and Graw said.
[ RECOVERY ]
Winners and Losers
While the overall U.S. housing market has recovered from the crisis that propelled the country into a recession, it has been a deeply uneven recovery. A new analysis by The Washington Post shows that the recovery has created winners and losers along lines of race, income, and geography.
For instance, the Post found that many minority neighborhoods lag in the recovery. “ZIP codes where blacks are the largest population group are more than twice as likely as white ZIP codes to have homes now worth less than in 2004,” the report noted.
[ GOVERNMENT ]
C.A.R. Supports $1.3 Billion Affordable Housing Proposal
The Board of Directors of the CALIFORNIA ASSOCIATION OF REALTORS® recently voted to support a $1.3 billion proposal by California Assembly members to create affordable housing programs.
“With a historically low homeownership rate of 54 percent and record high rental costs, the dream of owning a home in California is evaporating. Our teachers, nurses, firefighters, police officers, and other middle class workers should be able to afford to live in the communities they serve,” said C.A.R. President Pat “Ziggy” Zicarelli. “C.A.R. recognizes the urgency of California’s housing crisis and is fully supporting the proposal by the Assembly Housing and Community Development Committee to invest a portion of our state’s budget surplus to address this housing crisis.”
C.A.R. formed an Affordable Workforce Housing Task Force in August 2015 to examine existing policies in California designed to expand the availability of “affordable housing” and to make recommendations to increase the availability of affordable workforce housing in California.
[ THE NUMBERS ]
Homeownership Rate Down
Last year saw housing sales improve tremendously, according to data from the CALIFORNIA ASSOCIATION OF REALTORS® and NATIONAL ASSOCIATION OF REALTORS®. Despite those gains, the Department of Commerce’s Census Department figures from first quarter 2016 show that U.S. homeownership fell to 63.5 percent–near the 48-year low of 63.4 percent in the second quarter of 2015.
Toward the end of 2015, economists said that homeownership rates appeared to have stabilized and predicted a modest uptick, according to a Wall Street Journal analysis. However, the Journal noted that “some economists caution against reading too much into such a statistically small change in quarterly estimates.” That’s because homeownership is essentially flat and the drop from the previous quarter ( a seasonally adjusted 63.7 percent in the fourth quarter of last year) is fairly small.
Newscan
Business Briefs & Bottom-line Boosters
Helping Struggling Homeowners
The Federal Housing Finance Agency (FHFA) recently announced that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes. The new Principal Reduction Modification program is a one-time offer for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria.
HUD Renting Guidelines
Private landlords cannot implement blanket bans on would-be renters with an arrest or criminal record. If so, they are in violation of the Fair Housing Act and can face penalties or a lawsuit for discrimination, according to the Department of Housing and Urban Development.
CalHFA Program Expansion
The California Housing Finance Agency has a new program change that could help more California households qualify for CalHFA Conventional mortgages. Families who earn up to 120 percent of their county’s median income were eligible for CalHFA loans, though home prices in several communities throughout California exceed what the median income household can afford. CalHFA identified 35 California counties that have the greatest disparity between housing costs and household incomes. As a result of those findings, the program now raises the maximum qualifying income in these counties to 140 percent of the median income.
[ POLICY ]
Housing Panel Takes On Affordability
Housing affordability remains a pressing problem in the state of California, and the urgency for policy solutions has only grown as social consequences pose significant threats to the state’s future prospects. To spur discussion on potential solutions for housing affordability, the CALIFORNIA ASSOCIATION OF REALTORS®’ Center for California Real Estate (CCRE), an institute dedicated to advancing real estate knowledge, presented a panel discussion in partnership with the University of California Center Sacramento.
Michael Lens, assistant professor of Urban Planning in the Luskin School of Public Policy at UCLA, and Kerry Vandell, director of the Center for Real Estate at the UC Irvine Merage School of Business, provided an overview of the extent of the problem and what is at stake for California—beyond basic economics—if affordability hampers workforce diversification, equality of opportunity, and economic mobility, among other factors. Both professors called attention to the lack of policy solutions that focus on growing income rather than merely reducing prices. They agreed that both the costs of housing and the ability of people to afford it are equally deserving of policy prescriptions.
CCRE is a platform for the CALIFORNIA ASSOCIATION OF REALTORS® to engage experts on the issues that matter most to the real estate industry, thereby ensuring CCRE, and by extension C.A.R., arms its 180,000 members with ideas that help them become more knowledgeable, professional, and insightful in their work as practitioners and stakeholders in the future of real estate.
[ GENERATIONAL TRENDS ]
The Bank of Mom and Dad
According to Fannie Mae’s National Housing Survey®, half of young renters cite affording a down payment or closing costs as the biggest obstacle to obtaining a home purchase loan. A new study examined parental financial assistance to see how much they affect younger Americans’ ability to purchase a home. “The Role of Parental Financial Assistance in the Transition to Homeownership by Young Adults” found that the probability of becoming a homeowner jumps 23 percent among adult children who receive a money transfer from their parent.
Professors Dowell Myers, Gary Painter, and Julie Zissimopoulos of the University of Southern California analyzed two data sets—the Panel Study of Income Dynamics (PSID) and the Health and Retirement Survey (HRS)—that provide information on parental financial transfers, adult children’s transitions into homeownership, and a variety of child and parent demographic, social, and financial characteristics.
The working paper shows that only about one in 17 adult children between the ages of 20 and 49 and who are not already homeowners receive substantial parental financial assistance. The likelihood of receiving parental assistance varies substantially with the age, race, and ethnicity of the child and with the wealth of the parent.
[ COMMUNITY OUTREACH ]
Get Involved With the Boys & Girls Club
Earlier this year, the NATIONAL ASSOCIATION OF REALTORS® began collaborating with Boys & Girls Clubs of America in an effort to strengthen communities and support the country’s youth.
Every local Boys & Girls Club has specific needs, so local and state associations of REALTORS® and their members are encouraged to work with their local club to determine the best way to volunteer and offer resources to have the greatest impact.
Learn More > Learn more about how you can get involved at http://bit.ly/1Wt9uDr
[ HELPING POTENTIAL BUYERS ]
Expanding Ownership Opportunities Through FHA Programs
California’s rapid rate of house price appreciation, coupled with the lack of affordable inventory, is in the process of creating a serious housing crisis. Throughout the United States, around 10 percent of condominium associations are certified by the Federal Housing Administration.
In 2015, pilot programs were conducted with The Beverly Hills/Greater Los Angeles Association of REALTORS® (BHGLAAR) and the South Bay Association of REALTORS® (SBAOR) to increase Housing and Urban Development (HUD) certification for condo complexes. The program saw an opportunity to expand ownership and strengthen communities.
Annette V. Graw, a REALTOR® and the vice chair of C.A.R.’s Affordable Workforce Housing Task Force, noted the importance of working with committed lending partners, such as Wells Fargo which participated in their program. She also explained that it is possible to strengthen certification, including Veterans Affairs (VA) certification for condos, through education and targeting complexes without the credentials. “This is a niche that is being underserved in our communities,” she told California Real Estate.
Onerous regulations have meant that 60 percent of condominium associations that sought certification in 2013 were denied by the HUD.
“We found that a lot of HOAs have a perception that an FHA loan recipient is formerly homeless,” said Irma Vargas, REALTOR® and chair of the Housing Affordability Fund. “FHA is for teachers, nurses, and veterans. It’s for the people who work in their communities every day.”
By increasing the number of condominium complexes certified by HUD for either VA or FHA financing, more underserved borrowers will have access to mortgages to finance affordable homeownership, Vargas and Graw said.
[ RECOVERY ]
Winners and Losers
While the overall U.S. housing market has recovered from the crisis that propelled the country into a recession, it has been a deeply uneven recovery. A new analysis by The Washington Post shows that the recovery has created winners and losers along lines of race, income, and geography.
For instance, the Post found that many minority neighborhoods lag in the recovery. “ZIP codes where blacks are the largest population group are more than twice as likely as white ZIP codes to have homes now worth less than in 2004,” the report noted.
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