Bo’s housing clips: Improvements in national housing economy

A weak but slowly recovering housing industry become the rally point for the US economy as home equity improves to the point that banks will again lend against it.

In Galveston, plans are polished to finally rebuild public housing units destroyed four years ago by Hurricane Ike.

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Home prices on the rise: why that is good for US economy

Nationwide, home prices rose 3.6 percent in the third quarter compared with the same period in 2011, new data show. The jump points to a broad recovery in the long-sluggish housing market.

By Mark Trumbull       Christian Science Monitor       November 27, 2012

Home prices in the US rose in September, confirming that low interest rates and declining foreclosures are helping to propel a broad recovery in the housing market.

The price gains spanned from hard-hit cities like Miami to places such as Denver, which never saw a big boom-and-bust cycle.

Progress is visible in two newly released sets of numbers. The Standard & Poor‘s Case-Shiller index showed nationwide price gains averaging 3.6 percent in the third quarter of 2012, compared with the same quarter a year earlier.

The S&P Case-Shiller report also included numbers for 20 major cities. Only two show price declines for the year. Those were New York (down 2.3 percent) and Chicago (down 1.5 percent).

In a separate report on Tuesday, the Federal Housing Finance Agency’s (FHFA) issued its own estimate of price changes, saying US home prices have risen 4 percent over the past year, using the same gauge of comparing third-quarter figures for 2012 and 2011.

Both reports are watched closely by economists.

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Mortgage Rates Down To 3.31 Percent

Associated Press       November 21, 2012

Average U.S. rates on fixed mortgages fell to fresh record lows this week, a trend that is boosting home sales and aiding the housing recovery.

Mortgage buyer Freddie Mac said Wednesday that the average rate on the 30-year loan dipped to 3.31 percent, the lowest on records dating back to 1971. That’s down from 3.34 percent last week, the previous record low.

The average on the 15-year fixed mortgage also dropped to 2.63 percent. That’s down from 2.65 percent last week and also a new record.

The average rate on the 30-year loan has been below 4 percent all year. It has fallen further since the Federal Reserve started buying mortgage bonds in September to encourage more borrowing and spending.

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Home equity loans of credit make a comeback

By Kathleen M. Howley        San Francisco Chronicle      November 27, 2012

Home equity lines of credit that fueled a spending spree during the property boom are back.

After six years of declines, lending on home equity will rise 30 percent to $79.6 billion this year, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moody’s Corp. Originations next year will jump 31 percent to $104 billion, it projected.

Lending tied to real estate is reviving as record-low mortgage rates spur the housing recovery while an improving job market makes it easier for people to borrow. A rise in home equity lines is in turn helping the economy, fueling purchases of goods like televisions and refrigerators. Consumer spending, the biggest part of the economy, accelerated at a 2 percent annual rate last quarter, up from a 1.5 percent pace in the prior period.

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Wall Street slips on cliff caution, but homebuilders shine

By Rodrigo Campos       Reuters        November 27, 2012

Stocks declined on Tuesday as wrangling continued in Washington over budget talks, while homebuilders’ stocks outperformed the broader market after positive data.

Strengthening the case for a sustained rebound in housing, single-family home prices rose for an eighth straight month in September. The PHLX housing sector index .HGX advanced 0.5 percent, with all but one of its 19 components posting gains.

“As long as you have interest rates as low as they are right now, housing is definitely back,” said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

Despite strong housing data, an increase in planned business spending and a more than 4-year high in consumer sentiment, traders were cautious as politicians in Washington made little progress in dealing with the “fiscal cliff.”

Markets have lately focused on whether Congress and the White House can agree on ways to avoid some $600 billion in automatic spending cuts and tax increases that are due to kick in early next year.

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Wells Fargo offers down-payment grants

By Carolyn Said       San Francisco Chronicle       November 27, 2012

Wells Fargo will give $20,000 down-payment grants to assist 250 low- and moderate-income families with buying homes in the East Bay as part of a fair-lending settlement.

Reservations for the money will be allocated Dec. 7 and 8 during a home-buyer workshop at the Oakland Convention Center Marriott.

“This is super-positive help for a lot of people,” said Sheri Powers, director of the homeownership program at the Unity Council, an Oakland nonprofit that will administer the grants. “Even throughout this crisis, people still want to own a home. They say, ‘It will be mine, a place to raise my kids and take pride in it.’ ”

Wells’ CityLIFT program is part of its settlement of U.S. Department of Justice charges that it allegedly steered black and Hispanic borrowers into high-cost subprime mortgages. Wells is providing $50 million nationwide and $5 million in the East Bay for the down-payment grants, as well as paying another $125 million directly to borrowers believed by the Justice Department to have been adversely impacted. The bank has not admitted wrongdoing.

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The Real Estate Deal That Could Change the Future of Everything

By Emily Badger          Atlantic Cities      November 27, 2012

Dan and Ben Miller began tugging two years ago at a simple question they believe is central to the failings of the American real estate industry.

The brothers – sons of a well-known Washington, D.C. developer – had begun acquiring properties themselves in the city’s emerging neighborhoods where traditional capital seldom goes. Real estate developments are typically financed by wealthy investors who live in the suburbs, or by Wall Street funds even farther away. In a neighborhood like Washington’s H Street Northeast corridor, this means that local projects often can’t find backing, or that far-flung investors put up safe, formulaic products in their place: say, “the glass shiny office/condo building that’s horrible,” Dan Miller says, grimacing.

This model – with its broken connection between a neighborhood’s desires and its investors’ bottom line – seemed to the brothers illogical. Why couldn’t people in the community invest in real estate right next door? Why couldn’t the Millers raise money to purchase a property on H Street from the very people who live there? The neighborhood is a quirky mix of barbershops and hip beer gardens. It’s not the kind of place that investors from wealthy Chevy Chase, Maryland, quite get.

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GHA board gets detailed look at plans

By Michael A. Smith      Galveston County Daily News      November 27, 2012

GALVESTON — Actual construction in the controversial replacement of two demolished public-housing projects with mixed-income developments could begin in July at the Cedar Terrace site and in September at the Magnolia Homes site, officials of the firm McCormack Baron Salazar said during a presentation Monday to Galveston Housing Authority commissioners.

The housing authority board had intended Monday to consider a budget for the redevelopment projects, but tabled the issue until next week so the document could be amended before it’s submitted to the Texas General Land Office for consideration. The land office is administering the federal disaster recovery money that will pay for about half of the projects’ $69 million cost.

The board, however, got a detailed look at both the conceptual construction plans and the financial framework of the effort.

McCormack Baron Salazar’s plan calls for 122 units at Cedar Terrace, which is mid-island, north of Broadway on land between 29th and 30th streets and Sealy Avenue and Church Street.

It calls for 160 units at Magnolia Homes, which is between downtown and the University of Texas Medical Branch campus on land between 16th and 18th streets and Mechanic and Strand.

The units at both sites would be divided into two categories — 51 percent would be public housing for low- and moderate-income people in which the rental costs are subsidized by the government, and 49 percent would be market-rate open only to those who could afford the full cost of rent.

That means about 63 of the units would be public housing at Cedar Terrace and about 82 would be at Magnolia Homes.

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