Tuesday, September 30, 2014

Yes, Millenials aspire to own a home

A recent survey of younger Americans illustrates that the goal of homeownership remains an important part of the American Dream.

The economic future of Millennials is key to the future of housing demand. A record number of individuals aged 18 to 34 years are delaying household formation as a consequence of the Great Recession. In a recent Eye on Housing blog post, this situation was referred to as the “Great Delay,” as slow wage growth and rising student loan burdens have reduced attainment of traditional goals associated with the American Dream, including marriage and homeownership.

An important research question is whether these delays represent deferrals due to economic conditions or true changes in preferences and goals.

A recent survey from the Demand Institute provides new evidence. The study surveyed 1,000 18- to 29-year-olds about current conditions and market preferences. The findings indicate that homeownership remains an important long-term goal.

Among the findings for Millennials:
  • Over the next five years, 8.3 million new Millennial households will form.
  • 74% plan to move over the next five years, with the top reason being need for better housing.
  • 64% expect to be married in five years and 55% expect to have kids.
  • 75% believe homeownership is an important long-term goal and 73% believe ownership is an excellent investment.
  • 24% currently own a home and another 60% plan to purchase.
  • 36% expect their next home to be a multifamily rental, while another 36% expect it to be a single-family owner-occupied residence.
  • 48% prefer their next home to be in the suburbs, while 38% want urban locations.
  • 88% own a car.
  • Student loans do delay homeownership (but college raises lifetime incomes).
  • 44% think it will be difficult to qualify for a mortgage.

For more details, read the survey findings from the Demand Institute.

FHFA Index Shows Mortgage Interest Rates Flat in August


Nationally, interest rates on conventional purchase-money mortgages decreased slightly from July to August, according to several indices of new mortgage contracts.

The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.08 percent for loans closed in late August, down 1 basis point from 4.09 percent in July.

The average interest rate on all mortgage loans was 4.09 percent, reflecting no change from July.

The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.33 percent, a decrease of 1 basis point from 4.34 in July.

The effective interest rate on all mortgage loans was 4.24 percent in August, down 1 basis point from 4.25 percent in July. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

The average loan amount for all loans was $287,100 in August, down $700 from $287,800 in July.

Monday, September 29, 2014

BAR, PREP Now Available Online

Builders who want to earn the Certified Graduate Builder (CGB) educational designation and remodelers seeking to complete the requirements for the Certified Graduate Remodeler (GGR) designation have traditionally sat for the Builder Assessment Review (BAR) or theProfessional Remodeler Experience Profile(PREP) to determine what courses they need to complete.

Now, these industry professionals can complete these assessments online: at a lower cost and with a quicker turnaround time.

While builders and remodelers had often enjoyed the networking opportunities that are part and parcel of the BAR and PREP, the logistics were too daunting for too many potential candidates: Travel costs and time away from work add up and prevented these professionals from benefiting from these advanced designations.

The new online assessment tools remove those barriers – and add incentives, including:
  • A significantly shorter results turnaround time: 24 hours instead of the current 4-6 weeks.
  • Lower cost: NAHB members can take either the BAR or the PREP for $95 – less than half what the in-person class cost.
Students have the option to take the BAR and PREP online or in person through Dec. 31. However, only the online version of these assessments will be available to students next year, effective Jan. 1, 2015.

Big Changes Coming for Water Heater Efficiency. Ready?

Home builders and remodelers who install large capacity water heaters (greater than 55 gallons) need to be aware that revised federal energy standards that go into effect in April 2015 are expected to have a significant impact on space requirements for these water heaters and on the way they are installed.

Smaller water heaters must also comply with the increased energy-efficiency requirements and are expected to be more costly as a result. However, they are not expected to have additional space and/or venting requirements like the larger capacity units.

The revised standard was imposed by the Department of Energy and will go into effect following a five-year transition period to allow manufacturers to gear up for production of the more efficient units. As of April 2015, manufacturers will no longer be allowed to construct water heaters not meeting the new requirements, but builders and remodelers will still be able to install the existing stock.

Water heaters that comply with the new energy-efficiency standard are expected to be more costly and bulkier than current models. In particular, some current models of large capacity electric water heaters may no longer be available because the higher energy factor standards will require heat pump water heater technology. This new technology requires the water heater to be installed in an area with sufficient household air volume for heat exchange.

Builders and remodelers whose projects include installation of large capacity gas-fired water heaters must accommodate the positive pressure venting needs of higher efficiency gas- or propane-fired units during installation. And remodelers and home owners replacing a water heater may also find that these bulkier large capacity water heaters are too large to fit into the existing space and/or require new exhaust venting. According to DOE’s market assessment, about 4 percent of gas-fired storage water heater shipments and about 9 percent of electric storage water heater shipments fall into the large-volume water heater category.

In preparation for the new energy-efficiency standard, builders and remodelers who routinely install large capacity water heaters are encouraged to reach out to manufacturers for details about availability and space and venting requirements. NAHB will continue to follow this issue and will provide members with information about installation and potential alternatives to the larger capacity units as it becomes available.

To read more about changes to efficiency standards for water heaters, click here.

The Typical American Subdivision

A landmark survey conducted by your Home Builders Association provides a unique look at a typical residential subdivision being built today. The results were recently published as a Special Study in HousingEconomics.com.

For subdivisions of single-family detached homes, the figures show:
  • Median size: 22 acres.
  • Median number of housing units: 48.
  • Median gross density: 2.1 units per acre.
  • 4 percent include retail space.
  • 4 percent include other (non-retail) commercial space.
The data come from a survey sent to 2,042 land developers. A total of 266 developers responded (a 13 percent response rate). Eighty-eight of them provided information on one of their development projects, 56 provided information on two, and 111 provided information on three projects. Overall, the sample contains data on 533 development projects, the vast majority of which meet a commonly used criterion for residential subdivision (at least four housing units).

Not surprisingly, the typical characteristics vary quite a bit depending on the type of subdivision. This chart shows how the number of homes per subdivision varies across six basic types.

To establish a consistent, working concept of a metropolitan area, the survey provided a brief summary of the Office of Management and Budget definition: a densely settled urban area and surrounding counties tied to the urban area by frequent commuting. In terms of number of housing units, subdivisions inside and outside of metropolitan areas are quite similar. The median number of housing units in subdivisions built inside metro areas is 59, and the median outside is 63.

The survey also collected information on the type of housing built in the subdivision: single-family detached, townhomes, multifamily or some mix of these types. The “mixed” subdivisions contain every possible combination of housing types – including all three in the same subdivision – and tend to be relatively large. The median in mixed subdivisions is 291 housing units, compared to 48 in single-family-only, 56 in townhome-only, and 86 in multifamily-only subdivisions.

For additional details, including a separate profile for each of the six basic subdivision types, consult the full study at NAHB.org.

Wednesday, September 24, 2014

FHFA: Foreclosure Preventions Total Nearly 3.3 Million; Delinquencies Down In Second Quarter

The Federal Housing Finance Agency (FHFA) today released a report showing that Fannie Mae and Freddie Mac completed approximately 80,000 foreclosure prevention actions in the second quarter, bringing the total to nearly 3.3 million since the start of the conservatorships in September 2008. These measures have helped about 2.7 million borrowers stay in their homes, including nearly 1.7 million who received permanent loan modifications.

Further detail can be found in FHFA’s quarterly Foreclosure Prevention Report, which also includes data on Fannie Mae and Freddie Mac home retention actions, delinquency data and real-estate owned (REO) inventory. FHFA publishes the report data in an online, interactive Borrower Assistance Map accessible through FHFA.gov.

Also noted in the quarterly report:
  • The number of 60+ days delinquent loans declined 5 percent to the lowest level since the start of conservatorships.
  • The serious delinquency rate fell to 2.1 percent at the end of the second quarter compared with 6.2 percent for Federal Housing Administration loans, 3.4 percent for Veterans Affairs loans and 4.8 percent for all loans.
  • As of June 30, 2014, about 13 percent of loans modified in the second quarter of 2013 had missed two or more payments, one year after modification.
  • Approximately 37 percent of all permanent loan modifications helped to reduce homeowners' monthly payments by more than 30 percent in the second quarter.
  • Approximately 25 percent of borrowers who received permanent loan modifications in the second quarter had portions of their mortgage balance forborne.
  • Approximately 14,500 short sales and deeds-in-lieu were completed in the second quarter, bringing the total to more than 581,400 since the start of the conservatorships.
  • Third-party sales and foreclosure sales fell 10 percent to 42,800 while foreclosure starts increased slightly in the second quarter.
  • The REO inventory of Fannie Mae and Freddie Mac declined 10 percent during the quarter to approximately 131,500, as property dispositions outpaced property acquisitions.
 To read the full foreclosure prevention report at FHFA.gov, click here.

Tuesday, September 23, 2014

New Member Reception and Meet the Board THIS Thursday!

New Member Reception sponsored by PestBan
Thursday, September 25th at 8 a.m.
The HBA of Greenville would like to officially welcome you, please join us for new member orientation on Thursday, September 25th beginning at 8 a.m. at the HBA office. The reception will start with a short meeting on what the HBA of Greenville is about and how you can get the most out of your membership and get involved. After which, please stay for a reception with the board of directors and current members of the HBA.
We hope that you will join us!
For more information or to register for this event please contact the HBA office (864) 254-0133.