Median Sales Price
Price Per Sqft
Median Rent Per Month
The Freddie Mac House Price Index (FMHPISM) provides a measure of typical price inflation for houses within the United States. Values are calculated monthly and released at the end of the following quarter. For example, the FMHPI for October, November and December are published in late February of the following year. Series are available at three levels of geographical aggregation: Metropolitan Statistical Area (MSA), state, and national. All series begin in January 1975. The national index is defined as a weighted average of the 50 states and Washington, D.C. indices. The FMHPI is based on an ever expanding database of loans purchased by either Freddie Mac or Fannie Mae.
Opinions, estimates, forecasts and other views contained in this document are those of Freddie Mac's Economic & Housing Research group, do not necessarily represent the views of Freddie Mac or its management, should not be construed as indicating Freddie Mac's business prospects or expected results, and are subject to change without notice. Although the Economic & Housing Research group attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. The information is therefore provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution. Alteration of this document is strictly prohibited. ©2017 by Freddie Mac.
The GOP tax bill dominated news headlines this week, especially after its official announcement on Thursday. The housing industry was quick to lambaste several of the provisions as having massively negative impacts.
I won't get into a judgment of bill's pros and cons (though Homebuilders and Realtors are happy to oblige), but I can offer some perspective that may help address the question of housing market fallout.
First thing's first: we have no idea what the housing market fallout will be yet because this bill is still just a bill (and yes, it is likely "sitting there on Capitol Hill"). Unlike the charismatic little cartoon, this particular bill isn't going to serve as a shining example of the legislative process. It is a starting point... a rough draft. Some of the deepest lobbying pockets will certainly see to that and few are deeper than the National Association of Realtors'.
By the time we add the lobbying efforts of Builders and Mortgage Bankers to the mix, there is already a lot of resistance to what many see as the bill's most notable feature: a change of the mortgage interest deduction (MID) limit to $500k from $1 million.
The MID has long been considered sacred with respect to tax code. It was one of the few interest deductions that successfully evaded the Tax Reform Act of 1986. That made comments from Jerry Howard, CEO of National Association of Homebuilders (NAHB) all the more interesting. Howard likened the possible effects of the current bill to the 1986 legislation, saying "after that tax bill passed, there was a significant housing recession." He also noted that it would jeopardize homeownership for millions of families.
There's some truth to some of this, but to whatever extent 1986 continues to be used as a talking point for the current tax bill, it's worthwhile to brush up on historical facts.
It's true that construction numbers dropped after the 1986 tax bill, but not because homeowners were any less able to deduct mortgage interest. The Tax Reform Act of 1986 actually marked a shift in tax policy in favor of individual homeowners at the expense of landlords, developers, and builders. Homeownership actually didn't change much during that time, but the nature of borrowing money changed in a major way.
With the Savings and Loan crisis blossoming at the same time that builders were losing valuable tax incentives, it's no surprise that construction declined, but it was the multi-family sector that did the most damage.
This time around, the tax changes that pertain to borrowing money pale in comparison to the mass extinction of almost all interest deductions seen in 1986. But unlike 1986, the current tax bill would indeed limit the mortgage interest and property tax deductions for many homeowners on their primary residences.
Whether or not it would impact homeowners in such a way that cripples the housing market remains to be seen. There's been growing consensus over the years that the MID isn't as critical to homeownership as once thought. Homebuilders were even ready to agree before changing their tune last weekend. But that doesn't mean capping the MID won't hurt.
Perhaps the most insidious and least-intended side effect would be to discourage owners of homes with mortgages well over $500k from moving (all existing mortgages as of November 2nd would be grandfathered with no deduction cap, even if after future refinances). That would put additional pressure on a housing inventory situation that's already precarious, to say the least.
Apart from tax bill drama, there were actually a few other pieces of news this week! Many of the stories are linked below, but a notable highlight is yet another stellar home price report, this time from S&P/Case-Shiller. The Case-Shiller Index (20-city) has had an uncanny run of ultra-stable year-over-year appreciation. It rose to 5.9% this month.
For a week with plenty of potential motivation, interest rates weren't too volatile. Mortgage rates fell to the lowest levels in more than 2 weeks, but they did so gradually. In the bigger picture, rates are near the middle of 2017's range and haven't moved much recently (based on 10yr Treasury yields--the best benchmark for long-term rate momentum).
But shorter-term rates are a different story. They continue rising because they're more closely-tied to Fed rate hike expectations. In fact, as of this week, the gap between 2 and 10yr Treasury yields was as narrow as it's been since before the Financial Crisis.
Why does that matter? It may not matter too much just yet, but if this trend continues, economists will quickly remind us that when this spread gets too narrow, recessions often follow. Here's a much longer-term view of the same 2yr/10yr spread with the last 3 major recessions highlighted. In all 3 cases, the spread went below zero (i.e. 2yr rates were higher than 10yr rates) just before the recessions became official.
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The Fall season is upon us, and so are our AZ Property Tax Bills. For Homeowners in Arizona who don't escrow their property taxes, following are the websites to pay your property tax bills online in Maricopa County AZ, Pima County AZ and Pinal County AZ: Maricopa County Property Tax Due Dates:The first half of 2017 property taxes are due Sunday, October 01, 2017, and delinquent after Wednesday, November 01, 2017. If you miss the first half payment date you may pay the full year amount by December 31 without incurring interest. You can Search For Your Maricopa County AZ Property Address and Parcel Number at: https://mcassessor.maricopa.gov/ - Then click on your APN at the top left of the page, and click on the View/Pay Tax Bill Tab. If you know your AZ Property Parcel Number, go directly to one of the following pages, to pay your AZ Property Taxes: Pay Your Maricopa County AZ Property Taxes: http://treasurer.maricopa.gov/Pima County Arizona Property Taxes can be paid at:
https://paylocalgov.com/BillPresentment/Home/AccountLookup?id=1006004778 Pima County Arizona Property Tax Due Dates:http://www.to.pima.gov/tax-payments/payment-informationPinal County Arizona Property Taxes can be paid at: http://www.pinalcountyaz.gov/Treasurer/Pages/PaymentOptions.aspx Pinal County AZ Property Tax Due Dates:http://www.pinalcountyaz.gov/Treasurer/Pages/ImportantDates.aspxInformation provided by Local Arizona Mortgage Expert Steve Bernstein : Arizona Central Mortgage : www.azcentralmortgage.com : (480) 424-7144, AZ MB 0933140.
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There are three primary factors that determine how large a mortgage loan you can qualify for:
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The lowest down payment mortgage loan in Arizona is determined by your middle credit score. The 1% down payment loan requires a 720 middle credit score, while the 3% down payment loan requires a 620 middle credit score. There is also a 3.5% down payment mortgage loan that only requires requires a 580 credit score. These are the minimum required scores, and may require compensating factors for loan approval. Following are some of the Compensating Factors underwriters consider when approving your Home Mortgage Loan:
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Mortgage Closing Costs are added to your down payment, and your mortgage escrow account, to determine your Total Cash Required To Close. The Property Seller will also pay separate title insurance and escrow fees. But Home Buyers are responsible for most of the closing costs related to Buying a Home in Arizona. Following is a list of Closing Costs typically paid by an AZ Homebuyer. These Buyer costs can also be paid by the Home Seller, but "Seller Paid Buyer Costs," will need to be negotiated in writing thru your Arizona Residential Real Estate Contract. Note, some Buyer Paid Closing Costs can also be paid by the Lender. Give us a call now to discuss Lender Paid Closing Costs. (480) 424-7144Bank Closing Costs
Title & Escrow Company Costs
Most Arizona Mortgage Loans Require An Escrow Account Property Taxes, Homeowner's Insurance and Flood Insurance, if required. The escrow account also includes prorated interest from the day you close escrow, until the end of the month. For example, if you close on the 20th of the month, there will be 10 or 11 days of prorated interest due. If you close on the 10th of the month, there will be 20 or 21 days of prorated interest due except if your closing date is in the month of February.An escrow account is setup by a mortgage lender to ensure your property taxes and homeowner's insurance are paid when due. Following is an example of escrow charges that will be collected by your Title Company's Escrow Officer, when you close your purchase or refinance loan in Arizona:
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If you are already shopping for an AZ Home, we can also assist you with a fast, automated preliminary mortgage approval for a Conventional, FHA, or VA Home Loan. The preliminary approval process will require the following financial documentation:1. 30 days recent consecutive pay stubs2. 2015 & 2016 W2's, 1099's or K1's3. 2 most recent consecutive bank statements all pages4. 1 quarterly retirement or investment account statement if applicable5. Current award letter if using social security or disability income6. Tax returns w/ all schedules, if using self employment or commission income 7. $35.00 credit card authorization for 3 bureau scored mortgage credit reportWe then run your preliminary mortgage approval thru our FNMA, FHLMC, FHA or VA automated underwriting engine, which will take 24 hours or less, from the time you provide your financial documentation. Then you will receive your written preliminary mortgage loan approval letter, or we will call you to review additional items required to procure your preliminary mortgage approval.Once you have an approved Home Purchase Contract, we will update your loan application and miscellaneous disclosure forms, and quickly move your file to underwriting, for your complete underwritten mortgage approval. At that point, the underwriter will likely have a couple of questions and/or additional requests. We will work with you closely throughout the mortgage approval process, to ensure your Home Loan is approved quickly and efficiently.
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NEW HOME SALES
NEW homes sold in May 2017, at a seasonally adjusted annual rate of 610,000 units, according to HUD and the U.S. Census Bureau. This is 2.9% above the revised April sales figure of 593,000 new homes sold, and 8.9% above the May 2016 estimate of 560,000 expected new home sales. Please realize these figures are for "NEW HOMES" only, and do not include existing home sales / resales for May 2017. Also the margin of error is higher than typical for the HUD and U.S. Census figures released.
The median sales price for NEW HOMES sold in May 2017 was $345,800 units, as compared to $406,400 for Existing Home Sales. The number of EXISTING / RESALE HOMES sold in May 2017, was 610,000 units, an annualized figure of 5.62 million homes expected to sell in 2017. Although we do not yet have the figures for Arizona, new homes and existing homes sold on the West Coast, were significantly higher than the national averages.
ARIZONA HOME BUYERS
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