Anthony Casa starts a new lender; Who is going to lead HUD net year?
The former leader of the Association of Independent Mortgage Brokers announced on his Linkedin he was opening a new mortgage lender. “I am excited to share the official launch of UMortgage a purpose-driven national mortgage company centralized in Philadelphia, PA,” he said in his post.
“We are committed to building a great company culture supported by a best in class learning and development team, and providing our team members with opportunities to grow with our company and in their personal development,” he added.
While UMortgage has its leader, who will lead the awesomely large Housing and Urban Development department next year? We know it won’t be Dr. Ben Carson.
Most chatter is pretty much assuming a woman will take the lead. But, it probably won’t be former deputy secretary Pam Patenaude. Why? HUD hasn’t had a woman in the top role since the Carter administration, so that’s where the thought is coming from. To be sure, there are a few men’s names are in the mix, too.
California Rep. Karen Bass is high on the list. She previously served as director of the public housing management and occupancy division at HUD during the Obama administration. However, some see her as a replacement for Kamala Harris’ Senate seat instead.
Atlanta Mayor Keisha Lance Bottoms, who was also considered as a potential running mate for Biden during his campaign. In April, she announced rent-relief measures for Atlanta residents dealing with income loss because of Covid-19.
Diane Yentel, president of the National Low Income Housing Coalition is also said to be in consideration. “The idea of Diane Yentel as HUD secretary has generated an almost starry-eyed enthusiasm among many housing justice advocates, who appreciate her forceful advocacy for rent relief, racial equity, and housing for those with the lowest incomes,” said Shelterforce writer Miriam Axel-Lute.
Former Jacksonville Mayor Alvin Brown is reportedly high on the list of candidates. The Florida politician was an adviser to Gov. Andrew Cuomo when Cuomo was HUD secretary during the Clinton years.
Also in the running is Maurice Jones. Maurice previously served as Deputy Secretary for HUD from April 2012 through January 2014.
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House prices up, can rent offer affordability?
This is a terrible reality so many Americans now face. While, there’s no doubt that the historically low-interest rates of late have tempted many to at least consider getting onto the housing ladder but for many Americans, buying a first home is simply not economically feasible.
The National Association of Realtors reported earlier this week that pending home sales fell slightly in October, dipping by 1.1%. Lawrence Yun, chief economist for the National Association of Realtors, said in a release that house prices may start to hurt affordability.
If housing is not for you, what does the rental market look like? Well, there’s a bargain to be found if you are looking to stay or relocate to a big city. Rents are down in 41 of the 100 largest cities in the US, according to the Apartment List National Rent Report.
The average asking rent for a one-bedroom in San Francisco has dropped nearly 25 percent since the end of February and is down around 27 percent from the local market’s peak in 2015, driven by a sharp increase in vacancy rates. In Boston, rent prices have dropped 18.2 percent. These cities are also struggling with a high vacancy rate.
Rents in more affordable mid-sized cities however are picking up in recent months, potentially driven in part by renters taking advantage of remote work arrangements. In Boise, rents have increased by more than 9% since March. Boise’s for-sale market has also been heating up.
According to CoreLogic Insights, rent prices for the low-end tier—defined as properties with rent prices less than 75% of the regional median—increased 2.4% year over year in September, down from 3.7% in September 2019.
Meanwhile, higher-priced rentals—defined as properties with rent prices greater than 125% of a region’s median rent—increased 2.3% in September 2020, down from a 2.7% jump last September.
Here’s a clever solution if you want to build equity but can’t afford to buy a home. Up & Up a New York city-based company, offers renters a list of hundreds of properties that would otherwise only be available for purchase. Then they pay a deposit for a two-year lease that becomes their first ownership stake, thereby beginning to earn them equity immediately. (It typically comes to a 1% to 2% share). After that, every month, that share of the property increases as they pay their rent. In addition, if the house appreciates in value during the course of the lease, then the renter earns more.
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Housing market seasonality stages 2021 comeback
Economists at Realtor.com weighed in on how they think the housing market will shape in 2021 after the wild and crazy ride we’ve been on in 2020.
On home sales economists predict activity to slow from those frenzied levels which represented underlying housing demand as well as make-up buying for a spring season many buyers missed out on plus a sense of urgency brought on by record-low mortgage rates.
Still, they are predicting that home sales in 2021 will come in a whopping 7% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year
“As make-up buying from the disruption of spring 2020 fades, home purchases will be propelled by underlying demand in 2021,” the economists wrote. “This demand will come from a healthy share of Millennial and Gen-Z first-time buyers as well as trade-up buyers from the Millennial and older generations.”
And what about home prices? Realtor.com is predicting that home price gains will end 5.7% above 2020 levels, decelerating steadily through the spring and summer, and then gradually reaccelerating toward the end of the year.
Here’s the pattern they predict: first a slow down and the prices will settle into a sideways pattern and eventually begin to turn higher. The slowdown is thanks to more sellers expected to enter the market. The uptick is down to the expectation that those Gen-Zers looking to buy their first-home and Millennials who are both first-time and trade-up buyers will keep upward pressure on home prices.
And expect improvements to inventory. “We expect inventories to improve and, by the end of 2021, we may see inventories finally register an increase for the first-time since 2019,” the economists wrote. “The housing market in 2021 will be much more hospitable for buyers as an increased number of existing sellers and ramp-up in new construction restore some bargaining power for buyers, especially in the second half of the year.
“Still-low mortgage rates help buyers afford home price increases that will be much more manageable than the price increases seen in 2020.”
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