Mortgage credit availability decreased in December according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool. The MCAI decreased 7.3% to 175.0 in December. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI decreased (14.5%) and the Government MCAI increased slightly (0.1%). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 14.9%, while the Conforming MCAI decreased by 14.0%. “The supply of credit dropped in December to its lowest since February 2017. The decline was driven by a sharp decrease in the conventional credit space, as we saw the expiration of the Home Affordable Refinance Program (HARP),” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Credit availability in government loans was stable over the month, ticking up slightly. We also saw a decline in high balance and super conforming programs, which drove the decline in the jumbo index.” The MCAI decreased 7.3% to 175.0 in December. The Conventional MCAI decreased (14.5%) and the Government MCAI increased slightly (0.1%). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 14.9%, while the Conforming MCAI decreased by 14.0%.
Bernie Sanders to introduce bill to raise federal minimum wage to $15
Independent Vermont Sen. Bernie Sanders said he – along with other members of Congress – plans to introduce a bill in Congress this week that would raise the federal minimum wage to $15 per hour. “The federal minimum wage of $7.25 is a starvation wage. That is why I, along with many other members of Congress, will introduce legislation this week to raise that wage to $15 an hour. If you work 40 hours a week, you should not live in poverty.” The bill is expected to come as the government shutdown enters its fourth week – eclipsing the record for the longest lapse in federal funding over the weekend – as many federal employees go unpaid. Raising the minimum wage sparks a range of opinions on Capitol Hill – from whether it should be raised at all to whose job it should be to do so. Such a bill is unlikely to make significant headway because, even though Democrats took control of the House of Representatives during the 2018 midterm elections, Republicans maintain control in the Senate.
During an interview with FOX Business in November, White House economic adviser Larry Kudlow argued against having the federal government set the national minimum wage since conditions vary meaningfully among states. “The federal government shouldn’t have jurisdiction over the states anyway in a matter like this. The conditions are different in these states, the cost of living is different, the state of business is different,” Kudlow said. Twenty states raised their minimum wages at the outset of 2019, including California, New York and Washington. The White House adviser added that he has no problem with Americans taking home larger paychecks, especially if the raise comes from companies in the private sector – like Amazon. Sanders has been a staunch advocate for raising the minimum wage to $15 per hour. He introduced bills last year aimed at corporate America – including the Stop BEZOS Act Opens a New Window. – pressuring America’s largest corporations to lift workers’ wages. In addition to Amazon, Sanders has publicly targeted McDonalds, Walmart and American Airlines.
NAR – homeownership part of “american dream”; housing costs deterrent for non-owners
Homeowners and non-homeowners both strongly consider homeownership part of the American Dream. That is according to new consumer survey data from the National Association of Realtors®, which revealed that among those polled, approximately 75% of non-homeowners believe homeownership is part of their American Dream, while nine in 10 current homeowners said the same. NAR’s Aspiring Home Buyers Profile analyzed 2018 quarterly consumer insights from its Housing Opportunities and Market Experience (HOME) survey1 to capture the housing expectations and sentiments of non-homeowners – both renters and those living with a family member. When non-homeowners were asked for the chief reason why they currently do not own a home, most respondents said it was because they were currently unable to afford a mortgage. Over the last quarter of 2018, 43% of non-owners said they did not own a home because they were not in a position to purchase, which was down from the third quarter of 2018, when 49% of non-homeowners answered the same. Also in the 4th quarter, 33% of non-homeowners said they do not own because current life circumstances are not suitable for ownership, while 16% said they need the flexibility of renting. In addition, the survey looked at the main reason why non-homeowners would buy a home in the future. Throughout 2018, 28 to 31% of non-owners each quarter said an improvement in their financial situation would be the top reason that would encourage them to buy a home in the future. In each quarter, 26 to 30% of non-owners said a change in lifestyle – such as getting married, starting a family or retiring – would be the primary reason they would make a future home purchase.
Lawrence Yun, NAR chief economist, says unaffordable housing has caused a number of potential buyers to hold off on purchasing a new home. “The lack of affordable and moderately priced homes has forced non-homeowners to delay achieving that part of the American Dream. However, as the survey confirms, significant lifestyle changes like marriage or starting a family often spur non-owners to pursue home-ownership.” For this year’s survey, homeowners and non-owners were also asked about adult family or friends moving into their homes, the span of time this individual(s) lived within the household, and if they thought about moving to a new home because of the change. According to the survey, 11% of homeowners had an adult child move into their residence, while 5% of non-owners had an adult move into their home. Of those who had someone move into their home, 44% said that the individual intended to live with them for over one year or to stay permanently. Forty-four% of non-owners reported that the individual planned on living with them for between six months to one year. Eighty-eight% of those surveyed who had someone move into their home reported that their living situation remained acceptable and therefore did not warrant consideration of moving into a different home. Twelve% said they did consider moving or ultimately did move due to their home situation changing. “While home sales were slightly down in 2018, there is still a sizable pent-up housing demand. Economic growth, interest rates, and the supply of moderately priced-homes will dictate how well the real estate industry will do this year,” said Yun.”
More Americans fleeing high-tax states
More and more Americans are fleeing high-tax states – from California to Hawaii to New Jersey to New York – and relocating elsewhere in the hopes of holding onto some more of their hard-earned cash. Problem is that’s pushing up the cost of living in the states they’re fleeing to, according to the country’s largest real estate trade group. They’re going to nearby secondary states that used to be “affordable” – states like Washington, Nevada, Colorado and Arizona, for example, says Lawrence Yun, chief economist of the National Association of REALTORS(r). And it isn’t just the working class looking to move to lower-tax states. Taxes are often a top consideration particularly when someone is relocating for work or looking to retire says tax expert Bob Meighan, a former executive with Intuit. The biggest tax you’re going to face, after the IRS, is the one your state presents. That’s why Florida is a big draw “particularly among northeast residents currently living in high property-tax states such as New York, New Jersey (the highest in the country), and Connecticut,” says Yun. “In Florida, you get both lower taxes and a warmer climate.” Last year, these were the ten highest income tax states, according to TurboTax (*These rates do not include local taxes.):
New Jersey 8.97%
District of Columbia 8.95%
New York 8.82%