Tag Archives: economy

Home Values See Increase

3 May

adapted from Reverse Mortgage Daily April 30, 2013

Case-Shiller: Home Prices Rise Near 10%, Best Showing since 2006.

Home prices rose nearly 10% national on a year-over-year basis according to the latest reading from the S&P/Case-Shiller home price indices.

 

Prices showed an uptick of 8.6% year-over-year in February for Case-Shiller’s 10-city composite index and 9.3% for its 20-city composite index, indicating a home price recovery is holding strong.

 

“Home prices continue to show solid increases across all 20 cities,” said David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.”

 

Prices rose slightly from January to February with the 10- and 20-city indexes showing a .4% and .3% uptick, respectively. Regionally, Phoenix represented a standout market with 23% year-over-year growth while Atlanta and Dallas had the highest annual growth rates in the history of the index.

 

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases,” Blitzer said. “Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements.”

 

The data indicates housing is still on the upswing, despite mixed signals among multifamily indicators.

 

Federal Legislation Affects Reverse Mortgages

7 Mar

Two issues exist that affect reverse mortgages:

 

The first is the current budget sequester.  With federal funding cut to HUD grants that provide reverse mortgage counseling,

“From HUD’s perspective, the March 1 sequestration would also have even broader harmful effects on middle class families, on communities, and on the economy across the nation. Specifically: Sequestration would result in 75,000 fewer households receiving foreclosure prevention, pre-purchase, rental or other counseling though HUD housing counseling grants,”  said  Department of Housing and Urban Development Secretary Shaun Donovan.

 

The second is the current cap set by Congress on the total number of HECM reverse mortgages that can be insured by the FHA.  The cap has been raised from 2,500 loans in 1990 to 25,000 loans by the end of 1995., with subsequent raises of the cap leading to its current level, set in 2006 at 275,000.

“A major issue faced by the reverse mortgage industry is that, while the HECM program was made permanent back in 1998, there has been a statutory limit on the number of loans FHA is authorized to insure,” NRMLA President Peter Bell said in testimony presented to the Senate Banking Committee. “Although the cap has been routinely raised or suspended by Congress in a series of consecutive appropriations measures and continuing resolutions, the existence of the cap deters some industry participants from making the commitment required to fully embrace reverse mortgage lending, thus keeping competition in the market at a minimal level.”

“NRMLA urges Congress to support the continued availability of Home Equity Conversion Mortgages by permanently removing the cap on the number of HECMs that FHA may insure to minimize any possible disruption in the availability of this importance personal financial management tool,” Bell said.