Homelessness Continues to Decline in U.S.

Homelessness Continues to Decline in U.S.

Fewer people are homeless in the U.S., especially among families with children, veterans, and individuals who have long-term disabilities, according to HUD’s 2016 Annual Homeless Assessment Report to Congress.

The report says that 549,928 people were homeless on a single night recorded in 2016, a 14 percent drop since 2010. HUD credits some of the drop to the Obama Administration’s launch in 2010 of Opening Doors, a road map for 19 federal member agencies to help prevent and eliminate homelessness in the country. Over the past 7 years, HUD says the country has seen a 23 percent drop in families who are homeless, a 47 percent decrease in veteran homelessness, and a 27 percent decline in individuals experiencing chronic homelessness.

The number of people who are homeless dropped in 37 states between 2015 and 2016. The largest decreases were in Florida (2,341 fewer people were homeless), New York (1,898 fewer people), Illinois (1,587), Massachusetts (1,527), and Nevada (1,345). Meanwhile, the largest percentage decreases were in North Dakota (29%), Vermont (27%), West Virginia (24%), Montana (17%), and Nevada (15%).

The following chart shows estimates of the number of homeless people by state.

While homelessness is improving in the nation, HUD Secretary Julian Castro noted that the number of “doubled up” or rent-burdened families remains a top concern.

“While our continued progress reinforces that we are on the right path, the data also makes clear that we must increase the pace of that progress,” adds Matthew Doherty, executive director of the U.S. Interagency Council on Homelessness. “To do so, we must be unwavering in our commitment to strategies and investments that are working. Our communities and our citizens deserve nothing less.”

Source: U.S. Department of Housing and Urban Development

Wage Growth Is Giving a Boost to Affordability

Wage Growth Is Giving a Boost to Affordability

Recent increases in mortgage rates aren’t — yet at least — dampening home buyers’ purchasing power. In fact, housing affordability is at its best in a quarter-century, says Mark Fleming, chief economist for First American Financial Corp. Recent wage growth is helping to offset rising rates and home prices.

The firm’s September house price index shows that real house prices rose 1 percent month-over-month. The First American Real House Price Index measures the price changes of single-family properties and adjusts for the impact of income and interest rate changes across the country. Real house prices currently are 40.4 percent below their housing boom peak in July 2006, and nearly 20 percent below the level of prices in January 2000, according to the index.

“While a small uptick in rates in September caused an increase in real house prices compared to August, it is important to remember that mortgage rates remain at historically low levels,” says Fleming. “The low rates, combined with recent meaningful income gains, fueled an increase in consumer house-buying power, meaning affordability is at a quarter-century best. Even as interest rates increase above 4 percent post-election, housing, on a purchasing-power adjusted basis, will continue to be more affordable than it was in the early 1990s.”

Mortgage rates rose from 3.4 percent to 3.6 percent between August and September.

Affordability continues to increase in more markets, including markets considered by many to be overvalued, such as San Francisco and New York, Fleming notes. In fact, San Francisco, Virginia Beach, Va., Oklahoma City, and San Jose, Calif. topped First American’s list for improved affordability. Each metro saw year-over-year declines of 3 percent or more.

Rising incomes are having a big impact on consumer’s buying power. The median household income rose an estimated 2 percent year-over-year.

“Long-awaited increases in income levels are contributing to falling real house prices in many markets,” says Fleming. “Nominally, the price recovery is officially complete, but in real purchasing-power adjusted terms, house prices are still far below the pre-decline peak. The underlying story is consumer house-buying power is better than it has been in a generation.”

Source: First American Financial Corp.

Plants Can Improve a Home’s Air Quality

A study 30 years ago by NASA revealed that certain houseplants can help clean the air inside space stations, and studies since then have confirmed they may be able to do that for a home or office too. Further, studies have linked certain houseplants to an increase in productivity, calmness, creativity, and even a better night’s sleep.

Plants Can Improve a Home’s Air Quality

NASA recommends placing up to 18 plants in an 1,800 square foot house to help purify the air.

The best plants to purify the air around you? Studies highlight these:

• Philodendron
• Aloe
• Snake plant
• Peace lily
• English Ivy
• Spider plant
• Gerbera Daisy
• Dragon tree
• Bamboo

Source: “NASA’s Top Houseplants for Improving Your Wellbeing and Removing Air Pollution,” inhabitat.com (Nov. 15, 2016)

You’re Not Investing in Real Estate?

Most real estate professionals are independent contractors, which means they’re largely on their own when it comes to putting money away for retirement. One way to prepare for the future is to buy investment property. Having an appreciating asset like that gives you something to sell when you’re no longer working, but only about 30 percent of REALTORS® own investment property.

That’s one reason why NAR will be making it a priority in the coming year to help educate its members about ways to prepare for retirement.

The association launched a class earlier this month on working with real estate investors and becoming one on your own. And going forward, it will offer other resources.

“We find that our members work very hard for 30 years and in the end they don’t have anything to show for it,” NAR President Bill Brown says. “That’s why we’d like our members to start thinking about the future now.”

NAR’s effort on retirement is a top story in the latest Voice for Real Estate news video. The video also looks at the recent jump in mortgage interest rates. Although they’re still historically low, they are moving up quickly. After being at around 3.5 percent for many months, over the last few weeks they’ve risen to about 4 percent. That’s driven in part by a rise in bond yields, which are pricing in anticipated stimulus action in Washington under a new Administration and Congress. “Any time interest rates rise, it is a hindrance to home buying,” says NAR Chief Economist Lawrence Yun.

Yun thinks that will be partly offset by positive growth stemming from any stimulus effect of the federal policy changes (like reduced taxes, deregulation, and increased infrastructure spending). Also working in favor of today’s market is relatively strong job and wage growth. As long as these indicators stay positive, negative effects of higher rates will be offset to a degree.

The video also looks at what is expected to happen in Congress over the next month, during the lame-duck session, as lawmakers finalize last-minute legislation. NAR Deputy Chief Lobbyist Jamie Gregory says the agenda will likely be minimal, focused mainly on passing a short-term measure to fund the federal government until lawmakers and the Administration start tackling big-ticket items early next year like tax reform and reform of the secondary mortgage market.

The video also looks at what coming tax reform could look like for commercial real estate. Among other things, look for changes to be proposed for the expensing of business interest, treatment of carried interest, 1031 tax-deferred exchanges, and depreciation of property assets. Also, look for broad reductions in tax rates and more infrastructure spending.

Also covered in the video is a look at a bifurcation in commercial real estate markets, with smaller markers continuing to see increased transactions while in larger markets transactions are slowing down.

—By , REALTOR® Magazine