IRS Backtracks on Selfie Requirement

The Internal Revenue Service says it will no longer require facial recognition software to be used to verify the identities of taxpayers online.

In January, the IRS announced that it was transitioning away from having accounts use just a username and password at IRS.gov for managing personal tax accounts online. Instead, the IRS said that it planned to use the private identity verification company ID.me, requiring users to upload a picture of themselves, to log into their accounts.

But the move sparked widespread criticism, including from some lawmakers, over giving a third party access to sensitive information in a biometric database. Critics also said that it could prompt bias among those with limited internet access.

“The IRS takes taxpayer privacy and security seriously and we understand the concerns that have been raised,” Chuck Rettig, IRS commissioner, said in a statement. “Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition.”

The IRS has said it will use another online authentication system but says it will not require facial recognition. Taxpayers should file their returns or pay the taxes owed as they normally would this year, it said.

The agency has been seeking technology solutions to try to address a growing number of scammers who have been impersonating taxpayers to claim refunds or impersonating the IRS to dupe people out of information or money. Source: IRS.gov; “IRS Will End Use of Facial Recognition After Widespread Privacy Concerns,” The Verge (Feb. 7, 2022); and “IRS Says It Will Stop Using Facial Recognition After Controversy Over ID.me Verification,” Fast Company (Feb. 7, 2022)

©National Association of REALTORS®
Reprinted with permission

Homes are selling even faster than they were at this time last year as buyers continue to compete in the housing market. Housing inventories are lower as well, down 28% from a year ago. In December 2021, the National Association of REALTORS® reported that existing homes for sale fell to an all-time low.

With fewer listings of homes last week, buyer interest again outpaced homes available, writes Danielle Hale, realtor.com®’s chief economist, in a weekly analysis posted at the site.

“With fewer homes for sale now than this time last year, homes are selling faster and successful buyers have to move quickly,” Hale writes.

Seventy-nine percent of homes sold in December 2021 were on the market for less than a month, according to the National Association of REALTORS®. Properties typically remained on the market for just 19 days in December.

As rents rise at a double-digit pace, renters are looking to homeownership for the safety net of a steady mortgage and hopes of long-term appreciation. Mortgage rates that remain under 4% are also an incentive.

However, the fear of rising rates has driven a “rush on new-home sales as buyers try to sign contracts to lock-in rates and beat further cost increases,” Hale says.

Hale says housing indicators point to additional sellers entering the market this spring, which buyers would welcome as they look for a bigger selection in the housing market. Surveys show that more homeowners are planning to sell over the next 12 months. With single-family home construction at a 1 million–plus pace, inventory is expected to improve in the coming months.

“Additional housing supply is what’s needed to help first-time home buyers and add momentum to the homeownership rate,” Hale says. Source: realtor.com®

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Reprinted with permission

Mortgage Rates Hold at 3.55%

Borrowing costs held mostly steady this week, but how long will the reprieve last?

Mortgage rates continue to follow the trend of the 10-year Treasury yield and have stayed flat over the last three weeks.

As the economic recovery continues through the spring and summer, mortgage rates are expected to resume their upward trajectory, says Sam Khater, Freddie Mac’s chief economist.

But for now, “since mortgage rates are still near historic lows, many people are rushing to benefit from these rates,” Nadia Evangelou, National Association of REALTORS®’ senior economist and director of forecasting, writes on the association’s blog.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 3:

• 30-year fixed-rate mortgages: averaged 3.55%, with an average 0.8 point, unchanged from last week. Last year at this time, 30-year rates averaged 2.73%.
• 15-year fixed-rate mortgages: averaged 2.77%, with an average 0.7 point, dropping from last week’s 2.80% average. A year ago, 15-year rates averaged 2.21%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.71%, with an average 0.3 point, rising slightly from last week’s 2.70% average. A year ago, 5-year ARMs averaged 2.78%.

Freddie Mac reports commitment rates along with average points to better reflect the total upfront costs of the mortgage. Source: Freddie Mac and “Instant Reaction: Mortgage Rates: February 3, 2022,” National Association of REALTORS® Economists’ Outlook blog

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A new survey shows that real estate agents are more confident about the state of the market than many consumers. Seventy-seven percent of home buyers and sellers say they believe there’s a housing price bubble where they live, according to a Redfin consumer survey of 1,500 respondents who plan to buy or sell in the next year. 

On the other hand, less than half—44%—of real estate agents say they believe there’s a housing bubble in their market, with the rest feeling far more confident about the state of the market.

Over the last year, many leading housing economists have said that while housing prices are indeed rising quickly, this isn’t a housing bubble, bearing little resemblance to the booming market conditions that led to a financial crisis in the mid-2000s.

Housing bubbles occur when home prices reach unsustainable growth. They eventually burst when demand can no longer justify the rapidly rising home prices. Sharp price declines can result.

NAR Chief Economist: ‘This Isn’t a Bubble’

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans as they did then.

“Home buyers and sellers are rightfully concerned about how fast prices are rising, especially those who remember the housing market crash during the Great Recession,” says Daryl Fairweather, Redfin’s chief economist. “What we’re going through right now is closer to a ripple in the water than a bubble. Mortgage rates are already going up, which will likely stabilize demand and reduce the risk of a bubble that could burst.”

Home prices are expected to slow in 2022. The National Association of REALTORS® predicts price growth to moderate to 3% to 5% in 2022, much lower than the nearly 16% annual growth existing-home sale prices posted in December 2021. Source: “Are We in a Housing Bubble? Homebuyers Say Yes, Redfin Experts Say No,” Redfin (Jan. 21, 2022)

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Reprinted with permission

Greens may dominate paint firms’ lists of the hottest color of the year, but neutral colors still reign for the largest buyer pool. Eighty-one percent of interior design experts recently surveyed say whites and creams are the best colors to use when selling a house in 2022, according to the Paint & Color Trends 2022 Report conducted by Fixr, a home improvement resource.

“Whites and creams make a neutral, clean, fresh backdrop for many rooms,” according to the report. “You can still include color in your textiles if you want to add personality to the space, but it can make it easier for prospective buyers to see their own furnishings in a space when looking at a white or light-colored wall.”

On the exterior of homes for sale, white is the most frequently recommended color for the second consecutive year, according to Fixr. White received 58% of the vote from designers this year. Off-white also has increased in popularity, nabbing 41% in this year’s survey.

“White and off-white can both make a home look fresh, clean, and new regardless of age,” the study says. “These colors have nearly universal appeal, helping improve the curb appeal of a home and making it more likely to sell in a timely way.”

Source: “Paint & Color Trends 2022,” Fixr.com (2022)

©National Association of REALTORS®
Reprinted with permission