This Week in Real Estate: Dec. 21, 2015


Finally, speculation ends after more than 9 years (June 2006) of no rate increase the Federal Reserve increased rates 0.25 percent This Week in Real Estate. The impact of the Feds action: still historically low rates. Below are a few of the highlights from the third week in December that influence our business:

* CoreLogic’s Equity Report Has Good News For Homeowners. The Equity Report provides a quarterly overview of the distribution of equity across all U.S. single-family residential properties with a mortgage. Nationwide, borrower equity increased year-over-year by $741 billion. During Q3, 256,000 residential properties regained equity, putting the number of mortgaged residential properties with equity at 46.3 million. That’s 92 percent of total mortgaged properties, CoreLogic said. The number of underwater home decreased year-over-year by 1.1 million, or 20.7 percent. 37.5 million borrowers have at least 20% equity in their home. Metro areas with the highest percentages of equity homes are: Seattle, Dallas, Denver, Portland, Oregon, Houston. The percentage of homes with positive equity in Washington is 96.5% and 96.4% in Oregon.
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* Washington Ends Year With Extended Tax Benefits For Homeowners. A significant piece of tax legislation is now on its way to the President’s desk, and the bill includes the extension of a number of expired tax provisions important to supporting homeowners and real estate investment including mortgage debt forgiveness and mortgage insurance premium deductions. Under the 2007 “Mortgage Forgiveness Debt Relief Act,” Congress changed the rules and said unpaid mortgage debt would not be regarded as taxable income, but only for five years. The rule has been continued through a series of extensions and now mortgage borrowers will be protected through 2016. The ability to write off mortgage insurance premiums has been in the tax code for several years but it’s a rule which is only extended annually. Under this regulation borrowers can deduct the cost of mortgage insurance premiums in the same way that they deduct mortgage interest. The mortgage insurance deduction was scheduled to end on December 31st but now Congress has decided it should continue until the end of 2016, at which point we can go through the extension process once again.
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* Single-Family Starts Reach Seven-Year High in November. Nationwide housing starts rose 10.5% to a seasonally adjusted annual rate of 1.173 million units in November.
Single-family starts were up 7.6% to 768,000, their highest level since January 2008. Every region except the Midwest experienced a rise in single-family starts. Permits also peaked at their highest level since August 2007 at 1.289 million which was up 11% from an upwardly revised October. Single-family permits were up modestly but enough to also set an eight year record of 723,000. Regionally, the Midwest, South and West posted respective permit gains of 22%, 5.6% and 21.7%. Permit levels in the Northeast held steady.
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Have a productive week!


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