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Give Thanks for Homeownership Wealth
On the eve of Thanksgiving, you may typically find economists writing posts about the inflation-adjusted price of a Thanksgiving dinner (less than last year and 23 percent lower than in 1986), or the global price over time of the meal inputs (that’s economist “speak” for Thanksgiving dinner ingredients). Instead, as a housing economist, I think it is important to give thanks for the benefits of homeownership. I am passionate about the importance of homeownership as a key part of the American Dream and write about it regularly. Homeownership is critical to economic mobility and delivering financial and social benefits to families and communities throughout the U.S. but most importantly, homeownership is the single greatest source of wealth generation for most middle-class American households.
5 Holiday Splurges to Avoid If You Hope to Sell Your Home Next Year
The holidays are officially here—and while merrymaking and gift shopping are likely top of mind, you may have to keep some of those celebratory urges in check if you're planning to sell your home next year. Why? Because many holiday season activities can come back to haunt you when your house is on the market, even if it's months later. Don't believe us? Here are five holiday splurges to avoid if you hope to have a smooth home-selling process next year. It's our gift to you!
Existing Home Sales Hit Highest Pace Since Summer Months
Existing home sales increased in October, hitting their highest pace since earlier this summer, however, sales are still down year-over-year, according to the latest report from the National Association of Realtors. Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2% to a seasonally adjusted annual rate of 5.48 million in October. This is down from a downwardly revised 5.37 million in September. This increase marks the strongest pace of sales since June’s 5.51 million, however, it is still down 0.9% from last year, marking the second consecutive month of annual declines. “Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home,” NAR Chief Economist Lawrence Yun said. “While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated.”
Preserving Homeownership Incentives – a National Priority in Tax Reform
The Community Home Lenders Association is very supportive of the goals of the pending House and Senate tax bills of providing tax relief for individuals and corporations and simplifying and reforming the tax code. And if this means reforming existing homeownership tax provisions in order to help finance these tax cuts, that is fine with us. Unfortunately, the combination of almost doubling the standard deduction, eliminating deductions for state income tax, and limiting or eliminating deductions for property taxes will mean that less than 10% of homeowners will use the mortgage interest deduction – the key tax incentive driving home purchases. This could dramatically reduce home purchases, our homeownership rate, and ultimately home prices. Homeownership is a vital part of the economy, contributing roughly 15% of GDP. The importance of the housing market to the overall economy was vividly demonstrated by the 2008 housing collapse, which resulted in millions of Americans losing their home to foreclosure, a multi-trillion dollar bailout of our largest financial institutions, and the worst recession since the Great Depression. For those reasons, CHLA is opposing the current versions of House and Senate tax reform – unless substantive changes are made to ameliorate their negative impact on housing. But CHLA is not just raising concerns, we have a proposed solution.
The Docket: Missouri Supreme Court Rules for Borrower in Foreclosure Action
Importance to the title industry: The Holm case is important to the title industry for a couple of reasons. One, it differentiates between the causes of action that arise out of a foreclose sale gone awry. The mortgagor can either sue in equity to have the foreclosure sale set aside, or two, sue for wrongful foreclosure and pray for money damages. To state a cause of action for wrongful foreclosure, however, a plaintiff must plead and allege that the foreclosure sale was absolutely void. This gives rise to the second important impact that the Holm case has on the title industry: alleging that a previously conducted foreclosure sale is absolutely void may cause concern to a title searcher who may be participating in a post-foreclosure sale purchase of the same property. The searcher can rest easy, however, because it appears that so long as the plaintiff is not asking for the additional relief that the sale be set aside (and is not naming the current owners of the subject real estate), that an allegation that a sale is void in a wrongful foreclosure lawsuit will not affect title to the property.
ALTA, Other Trades Warn Limiting Capital Gains Exemption Would Disrupt Housing Market?
ALTA and 12 other trade associations warned the Senate that limiting the capital gains exemption would severely disrupt the U.S. residential real estate industry and the well-being of local communities. Currently, homeowners can exclude from their taxable income up to $250,000 in capital gains ($500,000 for married taxpayers) from a sale of their primary residence. Under the proposals—to qualify for this break—homeowners must have owned and lived in their home for at least five of the last eight years. The current rule requires two of the last five years. On Thursday, the U.S. House of Representatives passed a $5.5 trillion tax bill, which includes the provision to limit the capital gains exemption. In a letter to Sen. Orrin Hatch, chair of the Senate Committee on Finance, and Ron Wyden, the committee’s ranking member, ALTA said this provision if enacted “will act as a disincentive for many homeowners to move up or move down as life events occur – expanding family, medical issues, job changes, and other life contingencies.”