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AI Opposes Residential Appraisal Threshold Increase

The Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the Massachusetts Board of Real Estate Appraisers participated in bipartisan meetings with members of Congress Jan. 15, urging them to review a proposed increase to the residential appraisal threshold.
 
The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have proposed raising the residential appraisal threshold from $250,000 to $400,000.
 
The Appraisal Institute is asking appraisers to voice their opposition to the proposed increase. AI created an action alert where its professionals and others can weigh in on this important matter. The action alert provides talking points that appraisers can use in their letters, and AI encourages appraisers to share their own stories and experiences when speaking against the proposal. 
 
Use the AI action alert to make your voice heard.
 
If you have any questions regarding this issue, contact Bill Garber, AI’s director of government and external relations, at 202-298-6449 or by email at [email protected].

AI Seeks Public Hearing on Appraisal Threshold Increase

The Appraisal Institute and 15 other organizations submitted a letter Dec. 21 to the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency requesting that they hold a public meeting as part of the process to determine whether to increase the residential appraisal threshold from $250,000 to $400,000. 

Click here to read the letter.

AI Rejects Proposed Residential Appraisal Threshold Increase

The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve on Nov. 20 released a proposal to increase the threshold at which residential home loans require an appraisal to $400,000 from $250,000.
 
The rule would not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored enterprise.
 
“The Appraisal Institute strongly objects to the FDIC’s proposal to raise residential appraisal thresholds,” said 2018 AI President James L. Murrett, MAI, SRA. “Congress just considered establishing a residential appraisal exemption and instead chose to enact a vastly different allowance involving appraisers in rural areas. This proposed rulemaking flies in the face of this action, and recreates the same type of environment that led to the housing crisis.
“By increasing the residential appraisal threshold from $250,000 to $400,000, FDIC would threaten the vital role that appraisers play in real estate transactions” said Murrett. “This action would undermine the crucial risk mitigation services that appraisers provide clients and users of appraisal services.
 
Murrett noted, “Raising the threshold means more evaluations will be allowed in place of appraisals. “The Appraisal Institute anticipates that will result in a return to the loan production-driven environment seen during the leadup to the financial crisis, where appraisal and risk management were thrust aside to make more – not better – loans. Apparently, the FDIC has learned nothing from that experience.
 
“Reducing regulations may seem to make sense initially, but the FDIC’s announcement raises significant safety and soundness concerns that the Appraisal Institute finds deeply disturbing,” Murrett said.

Reverse Mortgage Volume Reaches 14-year Low in November: Data

By Jessica Guerin

After months of uneven recovery following last October’s program changes, reverse mortgage volume has fallen to a low it hasn’t seen since 2004.

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Commercial, Residential Real Estate on Different Paths: Fed Beige Book

Commercial real estate activity was modest to moderate in most Federal Reserve districts, while residential activity was reported to be mostly flat or declining — although the majority of districts reported increased home prices, according to the Fed Beige Book released Dec. 5. 

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Incentive Programs Benefit Multifamily, CRE in Urban Areas, State Agencies Say

By Andrea Riquier

Commercial real estate in large urban areas will be the big winner from the tax scheme aimed at boosting investment in needy areas, according to an analysis released in November.

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Housing Market to Continue Challenging Buyers in 2019: Realtor.com

By Kelsey Ramirez

Buying and selling a home is about to get a lot more difficult in 2019, or so says one expert in her forecast for next year.

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FHFA Sets Conforming Loan Limits for Fannie Mae and Freddie Mac

The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019.  In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. 

Baseline limit

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Affordability Index Drops as Median Home Price Reaches New High: NAHB

A modest increase in interest rates and home prices kept housing affordability at a 10-year low in the third quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today.

In all, 56.4 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 $71,900. This is down from the 57.1 percent of homes sold in the second quarter that were affordable to median-income earners and the lowest reading since mid-2008.

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Millennials, First-time Buyers Boost Homeownership Rates: Census Bureau

By Kelsey Ramirez

The homeownership rate increased slightly in the third quarter, driven primarily by a jump in first-time homebuyers.

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Mortgage Rates See Slight Uptick That Could Benefit Some Homebuyers

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that rates increased slightly across the board.

Sam Khater, Freddie Mac’s chief economist, says, “Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just 1 basis point to 4.86 percent this week. We expect rates to continue to rise, which will put downward pressure on homebuying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.86 percent with an average 0.5 point for the week ending October 25, 2018, up from last week when it averaged 4.85 percent. A year ago at this time, the 30-year FRM averaged 3.94 percent. 
  • 15-year FRM this week averaged 4.29 percent with an average 0.4 point, up from last week when it averaged 4.26 percent. A year ago at this time, the 15-year FRM averaged 3.25 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.10 percent. A year ago at this time, the 5-year ARM averaged 3.21 percent.
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Banks Say New FHA Appraisal Rule on HECMs Has Had Minor Impact

By Jessica Guerin

It’s been just a few weeks since the Federal Housing Administration announced that it will now require a second appraisal on select reverse mortgage loans, but lenders are already feeling the effects.

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Charlotte, North Carolina, Has Most New High-end Rental Property, Data Shows

Visit any urban center in a major U.S. city and you'll see a similar view: cranes dotting the landscape and billboards advertising units in the latest luxury apartment projects. Has the focus on high-end units gotten out of hand?

New research from RentCafe found that luxury rental properties had accounted for 79 percent of all apartment construction in the U.S. And in the 2018 that number has grown to a whopping 87 percent. In many cities, a full 100 percent of projects completed in the first half of the year were upscale units.

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FHA Cites Appraisal Concerns Because of 'Technological Shortcomings'

By Ben Lane

The world’s largest mortgage insurer can only check for mortgage defects on a “small” number of mortgages due to technological shortcomings and that’s leading to a potential rise in appraisal-related issues.

Residential Foreclosure Rates Down Quarterly and Yearly, Report Shows

 ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q3 2018 U.S. Foreclosure Market Report™, which shows a total of 177,146 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the third quarter, down 6 percent from the previous quarter and down 8 percent from a year ago to the lowest level since Q4 2005 — a nearly 13-year low.

U.S. foreclosure activity in Q3 2018 was 36 percent below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the eighth consecutive quarter where U.S. foreclosure activity has registered below the pre-recession average.

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FHA Reports Appraisal Issues on 37 Percent of Reverse Mortgage Loans

By Jessica Guerin

The Federal Housing Administration’s investigation into possible appraisal inflations on reverse mortgage loans revealed an issue the agency decided it must address.

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Starter Home Prices Reach Highest Point in a Decade, NAR Announces

Starter homes are now more costly to purchase than at any time since 2008, when the last boom came to a crashing halt. In the second quarter, first-time buyers needed almost 23 percent of their income to afford a typical entry-level home, up from 21 percent a year earlier, according to an analysis by the National Association of Realtors.

The property market, after years of price gains that outpaced income growth, is showing signs of slowing as sales decline. The affordability crunch is especially severe at the low end of the market and in hot areas where supplies are tightest and values have risen most. A jump in mortgage rates this year only made it worse.

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Confidence in Multifamily Market Drops, But Stays Positive, NAHB Finds

Confidence in the multifamily housing market edged down in the second quarter of 2018, according to the Multifamily Production Index (MPI) released today by the National Association of Home Builders (NAHB). The MPI dipped two points to 51 compared to the previous quarter.

The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

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Existing Home Sales at 2-year Low: NAR

Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors®. The West was the only major region with an increase in sales last month.

Total existing-home sales1https://www.nar.realtor/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.

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National Mortgage Settlement Involving Feds, States and Banks Wraps Up

By Ben Lane

One of the vestiges of the financial crisis is now officially in the past.

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