Prospective homebuyers are gearing up for the home shopping season, but where should they go to find the most favorable conditions among the hottest metros? A new analysis from Zillow determined how hot a region’s housing market is compared to others by analyzing sale-to-list-price ratios, the percentage of listings with a price cut, and how long homes stay on the market.Among the nation’s 35 largest metro areas, Miami, Tampa, and Orlando combine to show that buyers in Florida will have an easier time shopping for a home than buyers in most other markets. All three have seen year-over-year home-value growth the same or higher than the nation as a whole. Here are the top ten in order: New York, New York; Miami, Florida; Baltimore, Maryland; Chicago, Ilinois; Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; Tampa, Florida; Orlando, Florida; Houston, Texas and Riverside, CA. On the opposite end of the scale, San Francisco, San Jose, Seattle, and Denver have seen home values grow slower than the nation over the past year, but remain the four hottest markets. Despite having some of the highest prices in the country, buyers face more competition for an even more limited inventory. Surprisingly, the New York metro area is the most buyer-friendly market right now. People who can afford to buy in the New York metro have relatively little competition, and properties tend to sit longer on the market. Aaron Terrazas, Senior Economist at Zillow said “Blanket seller’s markets are history, while inventory remains tight, it is starting to climb. The housing market has cooled and in a growing number of markets, buyers are gaining more and more leverage – especially those well-heeled buyers willing to pay top dollar in pricey communities. However, the crunch is still on in more affordable areas so the bulk of buyers continue to see some competition, though somewhat less than a few months ago.” Overall, the housing market still favors sellers but is slowing—trending toward historical norms. According to another Zillow analysis, inventory is the highest it has been in a year, and the number of homes that sold for over list price decreased from 21% in November to 19% in December–the largest month-over-month drop in seasonally adjusted data since at least 2012. The share has been declining steadily since its peak of 24% of homes sold above list price in May 2018.
Average tax refunds up 19%, now in line with 2018 levels, IRS says
The average tax refund, which had been lagging so far this tax season, is now in line with last year’s levels, according to data released Thursday by the Internal Revenue Service. Data from the week ending Feb. 22 showed the average refund was $3,143 – a 1.3% increase when compared with the same period last year ($3,103). It encompasses four weeks of tax season. That represents a meaningful jump when compared with last week’s data, which had the average refund pegged at $2,640, down by double digits when compared with the year prior. The Treasury Department attributed the sizable increase in average refund size to the remainder of the Earned Income Tax Credits and Child Tax Credits being paid out last week. It also cautioned that data is likely to fluctuate week to week, and it is therefore difficult to draw conclusions this early on in the filing season. The overall amount the IRS has paid in refunds is now only down about 3.6%. The total number of refund checks doled out is down 4.8%. So far this year more than 47 million returns have been processed, a decline of more than 4% when compared with the same period last year. More than 3% fewer returns have been received by the agency. Throughout the early weeks of this year’s tax season, many payers voiced frustrations over smaller or non-existent refunds – with some even owing the agency for the first time. On this note, the Treasury continued to emphasize that there is a difference between your tax liability and your tax refund. “The size of someone’s refund is a separate issue from whether their taxes have increased or decreased,” the department noted in a statement on Thursday. “Most people are benefiting from the Tax Cuts and Jobs Act by receiving larger paychecks throughout the year, instead of tax refunds that simply result from people overpaying the government throughout the year.” Overall, Treasury officials said they expect fewer Americans to get refunds this year when compared with last year. However, they said most Americans are still expected to see a net tax benefit as a result of the passage of the Tax Cuts and Jobs Act. A spokesperson for the Treasury Department previously told FOX Business that individual taxes will be lower for “approximately 80% of filers” thanks to the Tax Cuts and Jobs Act. Meanwhile, another 15% of people will see no change. That leaves about 5% who will owe more.
First American – Mortgage fraud risk climbs 4.6% in January
In January, declining mortgage rates mixed with higher loan applications led to more risk of fraud and other errors in the home loan applications, according to the latest First American Loan Application Defect Index. According to the report, the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications rose 4.6% from the previous month, increasing 9.6% from January 2018. Nationally, the Defect Index for refinance transactions moved forward 5.1% from December and is up a whopping 20.3% from the same time a year ago. Notably, the Defect Index for purchase transactions climbed 5.6% from December and is up 3.3% from 2018. First American Chief Economist Mark Fleming said: “Overall, the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications increased by 4.6% compared with the previous month. While overall fraud risk has been on the rise since July 2018 due partially to the impact of natural disasters, the last two months have experienced an acceleration in fraud risk – what could be driving this change?” According to Fleming, the rise is attributed to a plunge in rates and spike in mortgage applications. “Surprisingly, mortgage rates declined in December and continued falling into January, reaching their lowest levels since April 2018,” Fleming continued. “Prospective home buyers and existing homeowners reacted to the lower rates, resulting in a mini-boom in mortgage applications, both purchase and refinance.” Overall, Fleming said a rise in purchase and refinance applications, coupled with strong first-time home buyer demand and tight inventory, bodes well for an early spring home-buying season. However, Fleming notes that this could contribute to further increases in defect risk. “Historically, purchase transactions tend to be more at risk of defects, fraud and misrepresentation, and the pressures resulting from rising demand and a strong sellers’ market compounds that risk,” Fleming continued. “When home values are rising, and the housing market is competitive, more buyers want to enter in the market. As a result, misrepresentation and fraud are more likely on a loan application.”
Cuomo, New Yorkers’ Amazon HQ2 pleas too little, too late? Ocasio-Cortez blamed
Some New York lawmakers are not ready to give up on the prospect of hosting Amazon’s HQ2 just yet. The state’s Democratic governor, Andrew Cuomo, has been trying to convince Amazon executives to recommit to plans in New York, the New York Times reported, citing two people with knowledge of the efforts. He has even reportedly connected personally with CEO Jeff Bezos while working “intensely behind the scenes to lure the company back.” According to the report, a recent conversation between Cuomo and Bezos marked the first time the pair had spoken since the lucrative deal fell through. Cuomo did not offer Amazon a new location for its facility, but is said to have promised support for the project. Amazon, however, did not indicate it was willing to reconsider. New York had offered $3 billion worth of incentives for Amazon to choose the location. It’s not just Cuomo who is hoping Amazon will change its mind. In an open letter published in The New York Times on Friday, local unions, businesses and other groups communicated support for the project. “A clear majority of New Yorkers support this project and were disappointed by your decision not to proceed,” the letter read. “Governor Cuomo will take personal responsibility for the project’s state approval.” Last month, Amazon announced its decision to abandon plans for its Long Island City, New York HQ2 location – taking along with it 25,000 high-paying jobs and a $2.5 billion investment. The company had been expected to generate billions of dollars’ worth of tax revenue for New York. Amazon’s November HQ2 announcement sparked fierce local opposition, including among some lawmakers – like Democratic Rep. Alexandria Ocasio-Cortez, who cheered the e-commerce giant’s eventual about-face. Cuomo recently hinted he believed Ocasio-Cortez’s surprise victory over Rep. Joe Crowley in the 2018 Democratic primary was at least partially to blame for Amazon’s decision.
DSNews – homebuyers stretching budgets for the American dream?
Buying a home can be a test of willpower, especially if a bidding war breaks out. Typically, it comes down to two options-spend more than the determined budget on that dream home, or make concessions and stick to inventory that is affordable. Some homebuyers choose to go for broke, others are willing to sacrifice amenities to avoid getting stretched too thin, and reaching either conclusion can be a harrowing ride. Speaking about the last year when mortgage rates were low and the market was competitive, NerdWallet’s home expert Holden Lewis described it as, “Homebuyers have been on a dizzying, twisty journey.” The company’s 2019 Home Buyer Report took data that showed how much American homebuyers compromised to make their homeownership dreams come true, and where they could have saved some money. It showed that nearly half (45%) of Americans who’ve purchased a home in the past five years ended up offering more than asking the price before having their offer accepted. That explains the 25% of American homeowners that said they no longer felt financially secure after purchasing their current home, and more than one-third of first-time home buyers could identify with them. By comparing mortgage rates among lenders, home buyers could save $776 million in a single year, that’s over $400 per borrower in the first year of a 30-year mortgage. Thirty-six% of Americans plan to buy a home in the next five years, of which 24% will be in the next year. The study also looked at how those getting back on track from foreclosure feel about the possibility of future ownership. Thirteen% of Americans have lost a home to foreclosure in the past 10 years—61% of those have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again. Quoting CoreLogic, the report pointed out that foreclosures peaked in 2011 during the crisis. More than 1 in 10 Americans (13%) say they’ve lost a home in the past 10 years due to a financial event such as foreclosure, short sale or bankruptcy. More than 6 in 10 (61percent) of them have not purchased a home since their financial event. Twenty% of those who haven’t repurchased say they plan on never buying a home again. On the other hand, 58% say they plan to buy again in the next five years.
Former SoFi CEO Mike Cagney’s blockchain lending startup Figure raises $65 million
Figure Technologies, the blockchain lending startup co-founded by former SoFi CEO Mike Cagney, grew throughout its first year of business last year. The company entered the home equity lending market first, when it rolled out its signature product, Figure Home Equity, which is a hybrid between a traditional home equity loan and a HELOC that allows homeowners to borrow from their home equity. Then the company went after the reverse mortgage market and unveiled a new program that it called an alternative to reverse mortgages. The program, called Figure Home Advantage, sees the company buy a property outright from a homeowner, who then rents the house back from Figure for as long as they want to. And now, the company will have some new funding to continue its expansion. Figure announced this week that it raised $65 million in its Series B equity funding. According to the company, the latest funding round brings the company’s total equity funding to more than $120 million in just its second year of operating. The funding round was led by RPM Ventures and partners at DST Global, with participation from investors Ribbit Capital, DCM, DCG, Nimble Ventures, Morgan Creek, and others. Cagney, who left SoFi in 2017 after reports emerged about the alleged toxic culture at the online lender, said that Figure is “encouraged” by the company’s first-year results and is looking forward to growing thanks to the new funding. “We are encouraged by what we’ve accomplished in our first year, and this investment validates Figure’s market potential,” Cagney, who serves as Figure’s CEO, said. “We launched the fastest HELOC in the market, and we originate, finance and sell every one of our loans on the Provenance blockchain, an industry first,” Cagney continued. “From the diversity of our founding team to our alignment with our members’ financial success, we believe we’re building a different — and better — kind of technology company.” As Cagney noted, the company built and deployed its own blockchain system, which it calls Provenance. The company uses the blockchain for all of its lending activities, which has its advantages, according to the company. This is how Figure describes it: “The company leverages the security, efficiencies and cost advantage of blockchain for loan origination, financing and sales and has a diverse set of funds, banks and dealers active on Provenance today.” According to the company, Figure was the first loan originator on Provenance, but the company says that several other originators plan to use the platform by the middle of this year. The company also said that additional use cases, such as investment funds on blockchain, are also planned for this year. Beyond that, the company plans to expand its Figure Home Advantage reverse mortgage alternative, which is currently being rolled out in Texas, Illinois, and Nevada, and take the program nationwide this year.