Homeownership is experiencing the lowest rates seen in 13 years, according to the U.S. Census Bureau Reports. The homeownership rate reached a record high of 69.2% during the second and fourth quarters of 2004, a sight not seen in 7 years.  In June of this year they dropped to a low of 65.9%, in an annual comparison.

Wayne Yamano, director of research at John Burns Real Estate Consulting in Irvine, Calif., told Bloomberg News, “Tight underwriting standards and the lack of a downpayment are keeping a big chunk of buyers out of the market and other people are being displaced by foreclosures.”

Many analysts believe that the homeownership rate may continue to fall well into 2015 and that the younger generation will be the ones that drive the housing market into the next decade.



 

There is talk of the Obama Administration considering a plan that would not only take a large portion of the foreclosed homes off the market, but will provide more homes available to rent.   This move is in an effort to prevent the drop of home values, according to the Wall Street Journal.

Foreclosed homes are typically sold at a lower price, which lowers the national home values.  Although this move could put lenders as well as the government in the unknown role of being landlords, the thought of removing some of the foreclosed homes off the market is "worth looking at", according to Ben Bernanke, Federal Reserve Chairman.

Lenders would be able to cover the costs of upholding the properties until such time as the homes can be resold and the market stabilizes itself.  

 

Existing home sales dropped in June by .08%, however home prices took a slight incline, according to the National Association of Realtors (NAR).  The gains in the Midwest and the South offset the loss in the Northeast and West.

According to Lawrence Yun, Chief Economist of NAR, “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market, including an unusual spike in contract cancellations in the past month. The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year.”

In a breakdown, 30% of the home sales came from first time buyers, which shows a 5% decline in a monthly comparison, 19% came from investors, which remained unchanged from the month before and the remaining 50% were repeat buyers, which showed jumped from 45% in May.



 

The Federal Trade Commission (FTC) has announced that they will NOT enforce a majority of the provisions of the Mortgage Assistance Relief Services (MARS) rule against real estate licensees.

Real estate licensees that are affected by the stay are defined by the FTC as: those who are licensed and in good standing under the state licensing requirements, those who comply with state laws governing the practices of real estate professionals and those who assist or are attempting to assist consumers in obtaining short sales in an effort to secure the sale of their homes.

The National Association of Realtors (NAR) is pleased with this announcement and even calls it “a substantial victory for Realtors,” as the organization has been working with the FTC for months now to minimize the potential impact on real estate professionals who are helping struggling homeowners obtain short sales.

For more information please visit the FTC website.




 

Over 2 million homeowners that were in the process of foreclosure or actually foreclosed upon during 2009 or 2010 can receive a second chance for their case to be reviewed. Homeowners that may be eligible will receive a letter from their lender explaining their rights.  

In an effort to find homeowners that may have been foreclosed on improperly, the reviews are part of the investigation in the fall of 2010 that revealed that foreclosure practices by some banks were not done properly. Mortgage servicers will be hiring independent auditors to review the homeowner’s cases to determine if they should receive financial compensation if the foreclosures were indeed not properly conducted.  

Borrowers that were denied loan modifications when they were eligible will also be re-evaluated during this process.  Banks have until Wednesday to submit their plans for revamping foreclosure practices to the Office of the Comptroller of the Currency (OCC).




 

According to the 2011 National Housing Pulse Survey that was released recently by the National Association of Realtors (NAR), 72% of renters said that owning a home is a priority for them in the future.  The survey also revealed that 7 in 10 Americans agree that purchasing a home is a good financial decision; however 71% agree that the controversial 20% down payment would have a negative effect on the real estate market.

According to Ron Phipps, NAR President, “Despite the economic setbacks Americans have experienced in today’s current climate, it is clear that a strong majority still believe in home ownership and aspire to own a home. However, achieving the dream of home ownership will become increasingly difficult for buyers if they are required to make a 20 percent down payment, which may be a reality for many of tomorrow’s buyers if a proposed Qualified Residential Mortgage rule is adopted. That is why Realtors® are strongly urging regulators to go back to the drawing board on the proposed rule.”

The National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for the National Association of Realtors Housing Opportunity Program.  1,250 adults across the nation were polled; the study has a margin error of plus/minus 3.1%.


 

One of the big questions in the real estate market today is "How much down payment should a buyer have to purchase a home?"  Some lawmakers and regulators are saying it should be 20% or 10%, however The Center for Responsible Lending is arguing that the requirements are too high and that it could take between 9-16 years for creditworthy potential homebuyers to meet the down payment rule.

According to Kathleen Day, a spokesperson for the Center of Responsible Lending, “We’re not advocating for zero percent down, we think down payments are good. But we think the market should set them, based on the underwriting.” This new down payment proposal comes in part from the new rules for mortgage lenders under the Dodd-Frank law.  Federal Housing Agency’s loans would be exempt from the new rules.  

To respond to the National Association of Realtors (NAR) call from the REALTOR Action Center, visit the website and tell your Senators and Representatives that you do not wish for the cost of mortgages to rise, you want your clients to have affordable mortgages and you want the real estate market to recover.


 

Due to the extreme rise in gas prices, the IRS announced that they have decided to increase the standard business mileage rate from .51 cents per mile to .555 cents per mile. This increased deduction can only be applied to miles that were driven between July 1, 2011 and December 31, 2011.  The first half of the year, the lower rate must be used.

The IRS Announcement 2011-40 will also apply to the miles that are driven for medical and moving purposes. This mileage increase will be raised to .235 cents a mile from .19 cents a mile.  Miles driven for charitable purposes will remain the same, .14 cents a mile.

According to the IRS Commissioner Doug Shulman, “This year’s increased gas prices are having a major impact on individual Americans.  The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices. We are taking this step so the reimbursement rate will be fair to taxpayers.

The IRS would also like to remind taxpayers that they can calculate their vehicle-use deduction based on the actual costs of using the vehicle.



 

For the first time in 8 month, home prices in major cities across the US have shown an incline during the spring months, according to Standard & Poor's/Case-Shiller home price index.

April's report showed a rise in 13 of the 20 cities that were tracked with Washington D.C in the lead, followed by San Francisco, Atlanta and Seattle.  According to David M. Blitzer, chairman of Standard & Poor's index committee, “It is much too early to tell if this is a turning point or simply due to some warmer weather.”

Despite the rise in 13 of the cities, there are six metro areas that are at the lowest levels seen in almost 4 years.  Those markets are Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.  

Many analysts believe that the index does not mark an end to falling home prices as the rise in foreclosures continues to overwhelm the market.  According to Johnathan Basile, the director of economics at Credit Suisse Securities, “It’s hard to sell when buyers have the leverage and foreclosures continue to create a gap between distressed sale prices and non-distressed sale prices."