Reform of the Housing Finance System a Top Priority

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The National Association of Home Builders (NAHB) created a white paper in 2012 called “A Comprehensive Framework for Housing Finance System Reform” which recommended utilizing both public and private sources of housing capital to keep the current federal government housing agencies. Recently NAHB has amended the 2012 white paper regarding the advancing of housing finance so there will be a secure and strong national financial market, job market and economic growth.

This is important when it comes to the housing market.  Without housing finance there would be no reason for new Housing Finance is vital to a stabilization and continued growth of the real estate market.developments and construction of new housing around the country. The home building industry is dependent on the housing finance system. One of the biggest hindrances mentioned in the white paper are the credit challenges home builders and home buyers are still facing that stemmed from the Great Recession.

The white paper clearly defines the importance of federal government support within the new system but limits the extent of the federal government’s duties. Conventional mortgages will be supported by private capital and a privately funded, mortgage-backed insurance fund with a federal government backstop to ensure it will be covered in case of a cataclysmic occurrence such as what happened in 2008.  Now the housing finance will be more private-sector with Fannie Mae and Freddie Mac transforming into a private-sector oriented system.

NAHB has challenged Congress and federal regulators to redefine housing finance reform because every American should have a decent place to live as stated in The Housing Act of 1949.  Homeownership is one of the best financial decisions one could make and proves to be a stable investment. It provides solid jobs for Americans through home building and manufacturing products used in construction.  Hopefully these steps and challenges will reduce the risk that America will be hit by another Great Recession.

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Housing Market is Bouncing Back According to Home Depot

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Home Depot is the world’s largest home improvement retailer, and what better resource to tap into to see a glimpse of how the housing market is bouncing back after the recession?  The retailer reported a record number of transactions over the last three months.  In fact, consumers have spent more than ever since 2006.  In stores that have been open for a year or more sales of increased 6%.

“We continue to see positive signs in the housing market,” said Carol Tome, Home Depot’s chief financial officer.The Housing Market Bouncing Back  Americans are increasing their spending when it comes to putting their personal touches on their newly-purchased homes, on a remodel or updates to sell a house.

There are two factors that Home Depot recognizes, housing turnover and household formation, that are higher than expected by the retailer. “When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,” Tome said.

Home prices are increasing, and that is an impetus for buyers to make a real estate investment. With a hot housing market, consumers are also increasing their spending on things they need for their homes such as appliances, tools, plumbing, decor, lighting, kitchen and bath hardware and flooring.  Home Depot reported transactions that were $900 or more increased 6% last quarter.

New homes are being built which is good for both home buyers and home builders. In July of this year construction on new single-family houses increased 13% from the last month, making it the biggest percentage increase since New Home Construction Increases Consumer SpendingDecember 2007.  The National Association of Home Builders (NAHB) measure of builder confidence also rose to its highest level in August of this year.

Young consumers are also starting to get in on the action.  During the Great Recession many experienced losing their homes or knew of someone who lost their home. “They really got chastened on how much debt they should have. But some of that caution is beginning to diminish a little bit,” Bob Baur, chief global economist at Principal Global Investors said.

A big factor is the stronger job market which has ushered household formation.  Young people are secure now and want to move into their own house.  This has led to them making big purchases on appliances, furniture and other household items.  Good news for our country’s housing market.  While it is not completely back to pre-crisis levels, it is definitely looking a lot stronger.

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Newly built home sales in the Greater New Orleans increased significantly in July, 2015.

Newly Built Home Sales Rise 25.8% Year-Over-Year

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Just like summer here in New Orleans, July’s housing market was hot! The new home sales activity is on its way back to normal with annual home sales already reaching 507,000. The Census Bureau and HUD reports that newly built home sales rose 5.4% from June of this year and 25.8% from July of last year.  New home inventories were reported at 218,000 in July which is the highest level that have been seen in over five years.

This increase can also be seen in private residential construction spending where the high was at an annual rate ofNewly built home sales in the Greater New Orleans increased significantly in July, 2015. $387 billion in July.  This solidifies the continuing economic growth in the construction industry.  Single-family homes have pushed construction expansion 15.8% on a year-over-year basis and multifamily new home construction spending is 21.2% higher than it was reported a year ago.

Developers are not the only ones that are seeing a positive growth, the National Association of Realtors (NAR) reports increase in existing home sales.  Existing home sales increased in July 0.5% from June and 7.4% from July of last year. Completed sales (closings) were reported at the highest since February 2007.

The confidence for home buyers stems from the strengthening economy.  The Bureau of Economic Analysis reports that the global economic developments (GDP) growth is at a strong 3.7% rate.  These findings were based on several factors including investment, faster growth for consumption, government spending and trade components.

Now is the time for buyers buying new homes or existing homes to tap into the housing market. Sales are solid which makes the real estate market a stable venture. New home prices are continuing to strengthen making real estate a great investment.

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Good News for the Single-Family Housing Market in New Orleans

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After the devastating blow of Hurricane Katrina, local residents were worried about the recovery and “return” of New Orleans.  Luckily there is good news to report about the recovery of the real estate market from the decade-old storm. The New Orleans Metropolitan Association of Realtors reports home prices are up 46% since Hurricane Katrina, and the average price per-square-foot has jumped up 8.5% in the last six months in the community.  Many predicted that the price growth would slow down this year but that is just not the case.  The single-family housing market in New Orleans is seeing a significant increase in the price per square feet for new homes.

The single-family housing market in the New Orleans metro area has an average selling price of $121 per-square-foot which is an 18.6% increase since the storm. The average house sold for $339,743 in the city between January and June of this year. On the Northshore in St. Tammany Parish there has been a 10% increase since Katrina. The average home in the parish sold for $243,770 this year which calculates out to $113 per-square-foot.

The prediction for this year is to see about 2,800 homes for sale which is close to the 3,300 sales in 2005 before Katrina. Rick Haase, President of Latter & Blum Inc., had expressed concern that household members in New Orleans’ neighborhoods are still worried about affordability in the housing market.  Fortunately he believes this will not be an issue as the mortgage lending standards for credit 176 St. Calais Place Front Exteriorscores are beginning to slacken, making it easier for first time homebuyers to be able to purchase and finance a new or previously owned home.

“Rates are low, job creation is continuing to happen, consumer confidence is high and improving, and the Millennial marketplace, which represents a huge slice of the population in greater New Orleans, is now able to get financing even though they haven’t had a lot of time in life to build their credit scores,” Haase said.

In St. Tammany Parish, not only has the new, masterplanned community of Bedico Creek seen an increase in new home prices, but it has also seen a huge surge in home buying in the 10 available Neighborhoods for sale.  Many home buyers are also delving into the custom home market and are buying lots for sale and then hiring one of the qualified St. Tammany builders of Bedico Creek to build their new home.  If you are interested in acquiring a home in the Greater New Orleans area, Contac Bedico Creek at 985-845-4200 or E-mail Info@LiveBedico.com.

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