Affordable Housing Changes, Market Trends, and Golf's Growing Influence

Mortgage & REITS

Average going rates as of Aug 13 2024

Numbers as of Aug 13 2024 closing

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🏛️ Economic Rundown

Yields fall after benign producer inflation data tees up CPI

• The Producer Price Index (PPI) rose by just 0.1% in July, down from 0.2% in June, with a year-over-year increase of 2.2%, a decline from 2.7% in June. This cooling inflation may lead to a Federal Reserve rate cut, lowering mortgage rates and making home loans more affordable.

• The benchmark U.S. 10-year note yield dropped 5.5 basis points to 3.854%, and the 2-year note yield fell 7.1 basis points to 3.9439%. Lower Treasury yields typically lead to reduced mortgage interest rates, making borrowing cheaper and potentially increasing property demand.

• Futures markets show a 54% chance of a 50 basis point Fed rate cut, with a full percentage point of easing expected by year-end. With unemployment at a near three-year high of 4.3%, the Fed is likely to cut rates to support the economy, potentially boosting real estate by enhancing affordability and demand.

🤌🏻 Real Trends

Will the U.S ever embrace social housing?

• With American politicians, housing advocates, and journalists visiting, Vienna's social housing model shows the benefits of mixed-income communities sharing top-tier amenities, where residents can pay as little as 4% of their income on rent.

• Without federal subsidies, Montgomery County, Maryland, has opened a 268-unit building and plans over 1,000 more homes. Their market-rate unit strategy supports lower-income housing, showing a promising blueprint for affordable living in the U.S.

• Spearheaded by Tiffani McCoy, Seattle's push for social housing, funded by a proposed tax on high earners, aims to create sustainable and integrated communities, potentially reshaping the city's housing market dynamics.

🎙️ Spotlight

Biggest shakeup in a century set to hit real estate agents this week

• Starting August 17, new rules from a $418 million NAR settlement will overhaul Realtor compensation. Agents' fees will no longer be listed on MLSs, and buyers must now enter a written agreement with their agent, potentially shifting how commissions are structured.

• Real estate commissions might drop by 25-50%, paving the way for alternative business models like flat-fee brokerages. Companies like Redy and Flyhomes are gearing up to capitalize on these changes with innovative approaches.

• The changes may lead to a shake-up in the industry, with some predicting a loss of agents, especially those new to the field. While experienced Realtors might benefit, younger agents face new challenges as buyers adapt to the evolving market dynamics.

Hottest Market in the U.S. for the First Time Ever

• Oshkosh is leading the Midwest's real estate boom, with inventory 72.8% lower than pre-pandemic levels, despite a 24.2% increase in listings year-over-year.

• For ten months straight, the hottest U.S. markets include cities from the Midwest and Northeast. Hartford, CT, and Manchester, NH, follow Oshkosh, with high buyer interest and median home prices of $444,000 and $585,000, respectively.

• Wisconsin, Illinois, and Ohio each have three cities in the top 20 hottest markets. Notable mentions include Akron, OH ($257,000 median price), and Peoria, IL ($179,000), showcasing the region’s affordable housing appeal.

🏰 State Zone

Mortgage rates drop; will Arizona housing market rebound?

• The average 30-year fixed mortgage rate has fallen below 6.5%, down from 7.2% in May, thanks to potential Federal Reserve rate cuts. This has sparked cautious optimism for August's market revival.

• Despite a slight drop in single-family home prices, Arizona’s market remains stagnant with around 19,000 units available. Buyers now have more leverage, but the market is not yet favoring them.

• Starting August 17, new home purchasing rules will enhance buyer negotiation power, offering opportunities for better deals. United Wholesale Mortgage’s zero-down program aims to boost first-time home buyer activity.

🏕️ Niche-RE

LeadingAge applauds HUD’s proposed updates to affordable housing block grant program

• The Department of Housing and Urban Development’s recent proposal, applauded by industry coalitions, aims to increase flexibility and reduce burdens for state and local governments in the HOME Investment Partnerships Program, the largest federal block grant dedicated to affordable housing.

• The new definition of “troubled properties” will now consider both financial viability and the physical condition of housing, a shift from the 2013 rule, allowing for more effective preservation of HOME-assisted units at risk of failure or foreclosure.

• Proposed changes include higher maximum per-unit subsidies and relaxed Community Housing Development Organization requirements, which are expected to reduce upfront costs and support sustainable housing preservation efforts.

👉 More Stories

• Golf's resurgence, with a 115% increase in off-course participation since 2019, is boosting real estate opportunities as hoteliers sell golf facilities to specialized operators, ensuring robust market performance and continued success for existing properties.

• Wyndham appoints real estate and hospitality veteran to lead its accelerating growth strategy, Amit Sripathi as its chief development officer.

Chart-Tastic

U.S. Chapter 11 bankruptcies are SOARING

Interesting in Social

 Dwelling of the Day

Further Lane to Atlantic Ocean.

And…that's a wrap on this edition!

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