Throughout the week, the BPC Housing Commission will highlight news articles that address critical developments in housing policy. Any views expressed in the content posted on this forum do not necessarily represent the views of the Commission, its co-chairs or the Bipartisan Policy Center.
The Associated Press
“Home construction has begun a gradual rebound and likely added to the nation’s economic growth in 2011. The chief reason is apartments are being built almost twice as fast as two years ago. Renting is the only option for many people who have lost their jobs, their homes or both. Private residential construction increased 2 percent in November to a seasonally adjusted $522.3 billion. It was the fifth consecutive gain. Single-family construction rose 1.5 percent while multi-family construction including apartments climbed 1.3 percent. The category that covers home remodeling rose 9.5 percent.” Read more here.
By Michael A. Fletcher
The Washington Post
“Across most of the country, home values are stuck in the doldrums, crimping consumer spending and leaving anxious owners in search of relief. You’d think the situation would present an inviting opening for the Republican candidates vying to challenge President Obama, who has acknowledged his failure to solve the real estate problem as one of his major policy shortcomings. Three years into the president’s term, the nation’s housing market remains a mess. Although some data shows some signs of improvement in recent months, one in four homes with mortgages is underwater and homeowners are struggling to cope with the loss of $7 trillion in home equity. Meanwhile, the National Association of Home Builders calls 2011 the worst in its 69-year history when it comes to construction of new homes. “Even so, with Iowa voters set to caucus on Jan. 3, the GOP candidates are not rushing forward with alternatives, making it very likely there will be no help on the way if a Republican recaptures the White House next fall. In fact, some of the ideas proposed by Republican presidential candidates could further harm the housing industry, according to industry leaders.” Read more here.
By Justin T. Hilley
“Benefits that distressed homeowners receive from credit counseling translate into mortgage servicers saving millions of dollars, according to The Stratmor Group. Counseling enables borrowers to remain in their homes and avoid foreclosure, short sales or deed‐in‐lieu transfers of their property to the lender, allowing servicers to avoid substantial losses on the loans, the mortgage banking consultants said. Statmor found the total economic benefit for investors and servicers providing counseling to 10,000 borrowers is $112.39 million versus $73.44 million for borrowers who receive counseling. The findings are exclusive of costs associated with providing counseling and loan modification services.” Read more here.
The Associated Press
“Americans bought slightly more new homes in November, but 2011 will likely end up as the worst year for sales in history. The Commerce Department says new-home sales rose 1.6 percent last month to a seasonally adjusted annual rate of 315,000. That’s less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market. It’s also below the 323,000 homes sold last year — the worst year for sales on records dating back to 1963. New homes account for just a fraction of the housing market, but they have a big impact on the economy. Each new home built creates roughly three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.” Read more here.
By Andrew Scoggin
“An index from Standard & Poor’s shows a narrowing gap between the cost of buying a house and renting… The rent-buy ratio has a 1987 benchmark reading of 100. Vertical movement on the index indicates a price difference, with upward movement showing an increase in rental prices, and vice versa. Rental costs peaked in the late 1990s when the index approached 120, and buying costs topped out at a reading near 50 in the housing boom of the mid-2000s. The index has moved closer to average levels since the ensuing housing bust.” Read more here.
By Martha C. White
“It’s a tarnished silver lining for people at risk of losing their houses and homeowners in neighborhoods blighted by bank-owned properties, but the robosigning scandal that slowed the foreclosure process to a crawl appears to have increased lender interest in short sales. ‘Foreclosure sales are pretty devastating,’ said Faith Schwartz, executive director of Hope Now, a resource for homeowners facing foreclosure. ‘We’d much prefer a modification, but if [homeowners] don’t quality, then the next best alternative is deed-in-lieu or short sales.’ “Short sales, in which the lender agrees to let the owner sell the home for less than the amount owed on the mortgage, and foreclosures both climbed in 2010, but while short sales rose by 26,000 this year, the number of foreclosures fell by 255,000, according to Hope Now. Short sales, along with deed-in-lieu of foreclosure deals in which the lender takes the deed essentially as payment for the mortgage, still upend families, torch credit ratings and hurt neighboring property values, but they’re far less toxic than foreclosures. ” Read more here.
By Delen Goldberg
Las Vegas Sun
“Las Vegas’ sluggish economy has changed the way some families live. Laid-off parents have moved in with adult children. Boomerang kids with college degrees but no jobs have returned home to mom and dad. Home builders are answering the call. Multigenerational houses — those with attached in-law suites or backyard casitas meant to accommodate grandparents, adult children or other extended family members — are being added to the valley’s landscape with increasing frequency. Developers with Pulte Homes, for example, included casitas in a dozen layouts offered in Henderson, Summerlin and other parts of Las Vegas. Home builder Lennar recently completed a wave of multigenerational construction in the Madison Grove at Providence development near Centennial Hills and plans to build similar homes in six more communities in the coming months.” Read more here.