Category Archives: blog

NYS ranks 48th worst state for taxes | Thank you Govornor Cuomo

As the tax deadline nears, residents of some states are bearing the brunt of it more than others.

Alaska, Delaware, Montana, Wyoming, and Nevada are the best five states in the U.S. when it comes to taxes, according to an analysis by WalletHub, while Illinois, Connecticut, Pennsylvania, New York, and Nebraska are the worst.

A 2018 study by Kiplinger placed Alaska, Wyoming, and Nevada in its top five states for taxpayers, with Illinois and New York in the bottom five.

Alaska is the best state for American taxpayers. (Graphic: David Foster/Yahoo Finance)
Alaska is the best state for American taxpayers. (Graphic: David Foster/Yahoo Finance)

Best and worst states for a variety of reasons

WalletHub looked at four different types of taxation: Real-Estate Tax, Vehicle Property Tax, Income Tax, and Sales & Excise Tax.

Here’s a breakdown of each, based on WalletHub’s data:

Being a homeowner in New Jersey isn’t cheap at all — in fact, NJ residents see the highest effective real-estate tax (otherwise known as property tax) rate in the country, at 8.13%. Trailing behind are Illinois (7.71%), New Hampshire (7.33%), Connecticut (6.89%), and Wisconsin (6.47%). WalletHub calculated these rates by dividing the effective median real estate tax in that state to the median income.

Gas also taxes play a role. Alaska pays the lowest per gallon, followed by Missouri, Mississippi, New Mexico, and Arizona. Pennsylvania pays the highest amount, with coastal states California, Washington, Hawaii, and New York not far behind.

And if property taxes are an issue, note that Hawaii has the lowest rate at 0.90%. Alabama, Louisiana, D.C., and Colorado aren’t far behind, all under 2%.

In this Tuesday, March 26, 2019 photo, Eddie Cartwright finishes gassing up a pick-up in South Mills, N.C. Gas stations have evolved dramatically since the country's first drive-in service station opened in Pennsylvania in 1913, according to the Smithsonian Institution. For most, the decline in service was all about economics. Let people pump their own gas, except in New Jersey, the only state that won't allow it and get their car serviced somewhere else. (Stephen M. Katz/The Virginian-Pilot via AP)
Alaska has the lowest gas taxes, while Pennsylvania has the highest. (Photo: Stephen M. Katz/The Virginian-Pilot via AP)

In terms of taxing residents income states like Alaska, Florida, South Dakota, Texas, Washington, and Wyoming all have a 0% rate. Yet, in Kentucky, residents pay a 5.01% tax on their income. Maryland, Oregon, and Pennsylvania are pricey too, with tax rates above 4% on their residents.

Sales and excise tax (also known as consumption tax) rates vary across the country, as well. Oregon, Montana, New Hampshire, Delaware, and Alaska are all well below 2%. However, Washington and South Dakota’s rates are significantly higher at 8.65%. Louisiana, Texas, and Arkansas are also above 6%.

Mortgage rates drop to 4.06% | Cross River Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the average 30-year fixed-rate mortgage dropped 22 basis points.

Sam Khater, Freddie Mac’s chief economist, says, “The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over ten years. Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand. We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.06 percent with an average 0.5 point for the week ending March 28, 2019, down from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent. 
  • 15-year FRM this week averaged 3.57 percent with an average 0.4 point, down from last week when it averaged 3.71 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.75 percent with an average 0.3 point, down from last week when it averaged 3.84 percent. A year ago at this time, the 5-year ARM averaged 3.66 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

More buyers priced out of the market with higher rates | North Salem Real Estate

By Na Zhao, Ph.DNAHB Economics and Housing Policy GroupReport available to the public as a courtesy of HousingEconomics.com

This article announces NAHB’s “priced out estimates” for 2019, showing how higher home prices and interest rates affect housing affordability. The 2019 U.S. estimates indicate that a $1,000 increase in the median new home price would price 127,560 U.S. households out of the market. In other words, 127,560 households would qualify for the new home mortgage before the change, but not afterwards. Similarly, 25 basis points added to the current mortgage rate would price out around 1 million households. The article also includes priced out estimates for individual states and more than 300 metropolitan areas.

The Priced Out Methodology and Data

The NAHB Priced Out model uses the ability to qualify a mortgage to measure housing affordability, because most home buyers finance their new home purchase with conventional loans, [1] and because convenient underwriting standards for these loans exist. The standard NAHB adopts for its priced-out estimates is that the sum of the mortgage payment (including the principal amount, loan interest, property tax, homeowners’ property and private mortgage insurance premiums (PITI), is no more than 28 percent of monthly gross household income.

As a result the number of households that qualify for mortgages for a certain priced home depends on the household income distribution in an area and the mortgage interest rate at that time. The most recent detailed household income distributions for all states and metro areas are from the 2017 American Community Survey (ACS). NAHB adjusts the income distributions to reflect the income and population changes that may happen from 2017 to 2019. The income distribution is adjusted for inflation using the 2018 median family income published by the Department of Housing and Urban Development (HUD) for all states and metro areas, and then extrapolated it into 2019. The number of households in 2019 is projected by the growth rate of households from 2016 to 2017.

The assumptions of the priced out calculation include a 10% s down payment and a 30-year fixed rate mortgage, at an interest rate of 4.85%. For a loan with this down payment, private mortgage insurance is required by lenders and also included as part of PITI. The typical private mortgage insurance annual premium is 73 basis points[2], based on the standard assumption of national median credit score of 738[3] and 10% down payment and 30-year fixed mortgage rate. Effective local property tax rates are calculated using data from the 2017 American Community Survey (ACS) summary files. Homeowner’s insurance rates are constructed from the 2016 ACS Public Use Microdata Sample (PUMS).[4] According to Brisbane property valuers, for the U.S. as a whole, the property tax is $12 per $1,000 of property value and the homeowner insurance is $4 per $1,000 property value.

Under these assumptions, 32.7 million of the 122.5 million U.S. households could afford to buy a new median priced home at $355,183 in 2019. A $1,000 home price increase thus would price 127,560 households out of the market for this home. These are the households that can qualify for a mortgage before a $1,000 increase but not afterwards, as shown in Table 1 below.

Table 1. US Households Priced Out of the Market by Increases in House Prices, 2019

State and Local Estimates

The number of priced out households varies across both states and metropolitan areas, largely affected by the sizes of local population and the affordability of new homes. The 2019 priced-out estimates for all states and the District of Columbia are shown in Table 2 (available in the Additional Resources box), which presents the projected 2019 median new home price and the amount of income needed to qualify the mortgage, and the number of households could be priced out if price goes up by $1,000. Among all the states, Texas registered the largest number of households priced out of the market by a $1,000 increase in the median-priced home in the state (11,152), followed by California (9,897), and Ohio (7,341).

Table 3, which is available in the Additional Resources box, shows the 2019 priced-out estimates for 382 metropolitan statistical areas. The metropolitan area with the largest priced out effect, in terms of absolute numbers, is Chicago-Naperville-Elgin, IL-IN-WI, where 4,499 households are squeezed out of the market for a new median-priced home if price increases by $1,000. This is largely because Chicago is a populous metropolitan area with a large number of households; and, compared to the largest metropolitan areas on the East and West costs, the median priced home is more affordable to begin with. Around 27% of households there are capable of buying new median-priced homes. For similar reasons, Houston-The Woodlands-Sugar Land, TX metro area, where nearly 33% of households can afford median-priced new homes.to begin with, registered the second largest number of priced out households (3,546), where nearly 33% of households can afford median-priced new homes. In New York-Newark-Jersey City, NY-NJ-PA, 3,531 households are squeezed out of the housing market for a new median-priced home if price increases by $1,000. Compared to Chicago or Houston, the median-priced new home is affordable to a smaller share of the households in New York, but New York is the largest metro area by population size with over 7 million households.

Interest Rates

The NAHB 2019 priced-out estimates also present how interest rates affect the number of households would be priced out of the new home market. If the mortgage interest rate goes up, the monthly mortgage payments will increase as well and therefore higher household income thresholds to qualify a mortgage loan. Table 4 shows the number of households priced out of the market for a new median priced home at $355,183 by each 25 basis-point increase in interest rate from 2.85% to 10.85%. When interest rates goes up from 2.85% to 3.10%, around 1.26 million households could no longer afford buying median-priced new homes. An increase from 4.85% to 5.10% could price approximately one million households out of the market. However, about 423,000 households would be squeezed out of the market if interest rate goes up to 10.85% from 10.6%. This diminishing effects happen because only a few households at the thinner end of household income distribution will be affected. On the contrary, when interest rates are relatively low, 25 basis-point increase would affect a larger number of households at the thicker part of income distribution.

Table 4. US Households Priced Out of the Market by an Increase in Interest Rates, 2019

Footnotes[1]According to the 2017 American Housing Survey (funded by HUD and conducted by the Census Bureau), 74 percent of the home buyers who moved into their homes in 2016 or 2017 had a regular primary mortgage on the home.[2]Private mortgage insurance premium (PMI) is obtained from the PMI Cost Calculator( https://www.hsh.com/calc-pmionly.html)[3]Median credit score information is shown in the article “Four ways today’s high home prices affect the larger economy” October 2018 Urban Institute https://www.urban.org/urban-wire/four-ways-todays-high-home-prices-affect-larger-economy[4]Producing metro level estimates from the ACS PUMS involves aggregating Public Use Microdata Area (PUMA) level data according to the latest definitions of metropolitan areas. Due to complexity of these procedures and since metro level insurance rates tend to remain stable over time, NAHB revises these estimates only periodically.

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http://www.nahbclassic.org/generic.aspx?genericContentID=265844&_ga=2.145431924.1759393123.1547037557-774800730.1539205172

Pending sales fall for 11th straight month | Mt. Kisco Real Estate

Pending home sales declined slightly in November on an annualized basis for the eleventh straight month. The Pending Home Sales Index decreased by 0.7% from 102.1 in October to 101.4 in November, and was 7.7% below the level one year ago. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR).

According to NAR, the decline in PHSI may not fully capture the current situation, as it did not reflect the impact of recent favorable conditions mortgage rates. But the housing market has been slowing down this year due to rising mortgage rates.

The PHSI increased 2.7% and 2.8% in the Northeast and West, but decreased 2.3% and 2.7% in the Midwest and South. Year-over-year, the PHSI declined in all regions, ranging from a decline of 3.5% in the Northeast to a decrease of 12.2% in the West. NAR stated that the annual drop in the West may be explained by the growing concerns of affordability due to rapidly increasing home prices in the region.

Existing sales slightly increased in November, but builder confidence fell in December to its lowest value since May 2015 as concerns over housing affordability persist. However, NAR anticipates a solid long-term prospect for home sales, as the current home sales level matches sales in 2000 while more jobs are created now compared to the early 2000’s.

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Fed rate hikes killing economic growth -inflation decreasing

Annual inflation rate in the United States fell to 1.9 percent in December of 2018 from 2.2 percent in November, matching market expectations. It is the lowest inflation rate since August of 2017, mainly due to a decline in gasoline cost. On a monthly basis, consumer prices edged down 0.1 percent after a flat reading in the previous month and also in line with forecasts. It is the first monthly decrease in consumer prices in nine months, due to a 7.5 percent slump in gasoline prices. Inflation Rate in the United States averaged 3.27 percent from 1914 until 2018, reaching an all time high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921.

United States Inflation Rate

1

CalendarGMTActualPreviousConsensusTEForecast
2018-10-1112:30 PMInflation Rate YoY2.3%2.7%2.4%2.7%
2018-11-1401:30 PMInflation Rate YoY2.5%2.3%2.5%2.4%
2018-12-1201:30 PMInflation Rate YoY2.2%2.5%2.2%2.4%
2019-01-1101:30 PMInflation Rate YoY1.9%2.2%1.9%2.2%
2019-02-1301:30 PMInflation Rate YoY1.9%1.9%
2019-03-1212:30 PMInflation Rate YoY2%
2019-04-1012:30 PMInflation Rate YoY2%

US Inflation Rate Lowest in 16 Months

Annual inflation rate in the United States fell to 1.9 percent in December of 2018 from 2.2 percent in November, matching market expectations. It is the lowest inflation rate since August of 2017, mainly due to a decline in gasoline cost. On a monthly basis, consumer prices edged down 0.1 percent after a flat reading in the previous month and also in line with forecasts. It is the first monthly decrease in consumer prices in nine months, due to a 7.5 percent slump in gasoline prices.

Year-on-year, prices fell for gasoline (-2.1 pecent compared to +5 percent in November); new vehicles (-0.3 percent compared to +0.3 percent); medical care commodities (-0.5 percent compared to +0.6 percent); and apparel (-0.1 percent compared to -0.4 percent). Also, cost slowed for fuel oil (1.9 percent compared to 16.1 percent in November); transportation services (2.8 percent compared to 3.3 percent); and used cars and trucks (1.4 percent compared to 2.3 percent). On the other hand, inflation went up for electricity (1.1 percent compared to 0.6 percent); food (1.6 percent compared to 1.4 percent); medical care services (2.6 percent compared to 2.4 percent); and used cars and trucks (1.4 percent compared to 0.4 percent) but was steady for shelter (3.2 percent). Also, cost rebounded for utility piped gas service (2.3 percent compared to -2.1 percent). 
Excluding food and energy, consumer prices increased 2.2 percent over a year earlier, the same as in November and matching forecasts.
On a monthly basis, the gasoline index fell 7.5 percent in December. This decline more than offset increases in several indexes including shelter, food, and other energy components. The energy index went down 3.5 percent, as the gasoline and fuel oil indexes decreased, but the indexes for natural gas and for electricity increased. The food index went up 0.4 percent in December.
The index for all items less food and energy increased 0.2 percent in December, the same increase as in October and November and in line with forecasts. Along with the index for shelter, the indexes for recreation, medical care, and household furnishings and operations all increased in December, while the indexes for airline fares, used cars and trucks, and motor vehicle insurance all declined. 

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https://tradingeconomics.com/united-states/inflation-cpi

Moving out of high tax Democrat blue northeast states | Waccabuc Real Estate

Americans are on the move, but where are they moving to and from?

Interactive Map: To understand inbound and outbound percentages for each state, use the legend. To view reasons for moving and demographic data, select the year and state that you would like to view using the dropdown menus. (If you are using a desktop computer, you can use your mouse to click and select a state.)

Americans are on the move, relocating to western and southern parts of the country. We love moving from Los Angeles to another city as it brings in excitement and also new adventures in life. The results of United Van Lines’ 42nd Annual National Movers Study, which tracks customers’ state-to-state migration patterns over the past year, revealed that more residents moved out of New Jersey than any other state in 2018, with 66.8 percent of New Jersey moves being outbound. The study also found that the state with the highest percentage of inbound migration was Vermont (72.6 percent), with 234 total moves. Oregon, which had 3,346 total moves, experienced the second highest percentage nationally, with 63.8 percent inbound moves. 

States in the Mountain West and Pacific West regions, including OregonIdaho (62.4 percent), Nevada (61.8 percent), Washington (58.8 percent) and South Dakota (57 percent) continue to increase in popularity for inbound moves. In tune with this trend, Arizona (60.2 percent) joined the list of top 10 inbound states in 2018.

Several southern states also experienced high percentages of inbound migration, such as South Carolina (59.9 percent, this makes moving to Greenville very popular) and North Carolina (57 percent). United Van Lines determined the top reasons for moving south include job change (46.6 percent) and retirement (22.3 percent).

In the Northeast, however, an outbound moving trend continues. New Jersey (66.8 percent), Connecticut (62 percent) and New York (61.5 percent) were included among the top 10 outbound states for the fourth consecutive year. Midwestern states like Illinois (65.9 percent), Kansas (58.7 percent), Ohio (56.5 percent) and Iowa (55.5 percent) saw high outbound relocation as well.

“As the nation’s largest household goods mover, our study allows us to identify the most and least popular states for residential relocation throughout the country, year after year,” said Eily Cummings, director of corporate communications at United Van Lines. “These findings accurately reflect not only where Americans are moving to and from, but also the reasons why.”

The National Movers Study reveals the business data of inbound and outbound moves from 2018. In addition to this study, United Van Lines also conducts a survey to find out more about the reasons behind these moves. A leading motivation behind these migration patterns across all regions is a career change, as the survey showed approximately one out of every two people who moved in the past year moved for a new job or company transfer. Other reasons for the high percentage of moves to the Mountain West in 2018 include retirement (28.1 percent), proximity to family (20.8 percent) and lifestyle change (19.4 percent). Compared to all other states, Idaho saw the largest influx of new residents desiring a lifestyle change (25.95 percent), and more people flocked to New Mexico for retirement than any other state (42.74 percent).

“The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factors like job growth, lower costs of living, state budgetary challenges and more temperate climates,” said Michael Stoll, economist and professor in the Department of Public Policy at the University of California, Los Angeles. “Unlike a few decades ago, retirees are leaving California, instead choosing other states in the Pacific West and Mountain West. We’re also seeing young professionals migrating to vibrant, metropolitan economies, like Washington, D.C. and Seattle.”

Moving In

The top inbound states of 2018 were:

  1. Vermont
  2. Oregon
  3. Idaho
  4. Nevada
  5. Arizona
  6. South Carolina
  7. Washington
  8. North Carolina
  9. South Dakota
  10. District of Columbia

New to the 2018 top inbound list are Arizona at No. 5 and District of Columbia at No. 10, with 60.2 percent and 56.7 percent inbound moves, respectively.

Moving Out

The top outbound states for 2018 were:

  1. New Jersey
  2. Illinois
  3. Connecticut
  4. New York
  5. Kansas
  6. Ohio
  7. Massachusetts
  8. Iowa
  9. Montana
  10. Michigan

New Jersey (66.8 percent), which has ranked in the top 10 for the past 10 years, moved up one spot on the outbound list to No. 1. New additions to the 2018 top outbound list include Iowa (55.5 percent), Montana (55 percent) and Michigan (55 percent).

Balanced

In several states, the number of residents moving inbound was approximately the same as the number moving outbound. Arkansas and Mississippi are among these “balanced states.”

Since 1977, United Van Lines has annually tracked migration patterns on a state-by-state basis. The 2018 study is based on household moves handled by United within the 48 contiguous states and Washington, D.C. and ranks states based off the inbound and outbound percentages of total moves in each state. United classifies states as “high inbound” if 55 percent or more of the moves are going into a state, “high outbound” if 55 percent or more moves were coming out of a state or “balanced” if the difference between inbound and outbound is negligible.

To view the entire 2018 study, an interactive map and archived press releases from United, visit the United Van Lines website.

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https://www.unitedvanlines.com/contact-united/news/movers-study-2018?fbclid=IwAR0HVg6bo9cn2JN1qEcWGJXwNqRCNTph1nUqeXITL_oQNln56GzHZGqy-UQ

Fed killing the economy

  • Raising fed funds rate too fast. Should have been only two increases in 2018.
  • Time to reduce rates 50 bps.
  • Inflation is 1%-1.25%, , not 2.2%.
  • GDP growth closer to 1.5% rather than 3%.
  • Selling off balance sheet the same as raising fed funds rate.
  • Stock market sees low growth, low inflation this year and next because rate increases not needed.

Mortgage applications fall | Pound Ridge Real Estate

Mortgage Rates steady

U.S. consumers filed fewer loan applications to buy and refinance homes, while home borrowing costs were mixed with 30-year mortgage rates unchanged on the week, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group said its seasonally adjusted index on mortgage requests fell 2.5 percent to 329.5 in the week ended Oct. 26. It hit 322.1 two weeks earlier, which was the weakest reading since Dec. 26, 2014.

Interest rates on 30-year conforming mortgages, whose balances are $453,100 or less, on average were unchanged at 5.11 percent, the highest since February 2011.

Other borrowing costs that MBA tracks were both higher and lower from the previous week.

MBA’s seasonally adjusted measure on loan applications for home purchases, a proxy on future home sales, fell 1.5 percent to 224.9 last week. It was close to 224.0, which was the lowest since February 2017, set two weeks earlier.

The purchase application index was lower year-over-year, according to Joel Kan, MBA’s assistant vice president of economic and industry forecasts.

“Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks,” Kan said in a statement.

Mortgage rates jumped this month in step with U.S. bond yields US10YT=RR on worries about rising inflation and growing federal borrowing to finance a widening budget deficit.

Rising borrowing costs, disappointing company results and trade tensions between China and the United States stoked a stock market rout as the S&P 500 .SPX fell last Friday to its lowest since early May.

China, Japan factory output weakens in face of trade threat

Wall Street share prices have recovered some of last week’s losses.

The group’s seasonally adjusted gauge on refinancing applications decreased 3.8 percent to 884.2 last week, holding above 838.1 two weeks ago, which was the lowest reading since December 2000.

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https://www.reuters.com/article/us-usa-mortgages/u-s-mortgage-applications-slip-rates-mixed-mba-idUSKCN1N51SP

New home sales are up | Katonah Real Estate

Year-to-date sales are 6.9% higher than the same period last year

Framers construct walls on a new home under construction in Lancaster, Ohio.

The numbers: New-home sales ran at a seasonally adjusted annual 629,000 rate in August, the Commerce Department said Wednesday.

What happened: Sales of newly-constructed homes rose 3.5% compared to July, and edged past the MarketWatch consensus of a 625,000 pace. And the pace of sales in August was 12.7% higher than a year ago. But hefty revisions to prior months were all downward, a reminder that the housing recovery remains grudgingly slow.

The median selling price in August was $320,200, 1.9% higher than year-ago price.

Big picture: The government’s home-construction reports are based on small samples and are often revised heavily, making it hard to rely on any one month’s data. For the year to date, sales were 6.9% higher than the same period last year. That year-to-date comparison has declined steadily over the course of the year, a possible sign of flagging momentum.

Another sign may be rising inventories: at the current pace of sales, it would take 6.1 months to exhaust available supply, one of the highest ratios in recent years. In a note out after the release, Amherst Pierpont Securities Chief Economist Stephen Stanley noted that there were 318,000 homes available for sale in August, the highest number since 2011.

What they’re saying: Economists at Freddie Mac analyzed the pace of new housing construction and found that years of underbuilding has left the U.S. with a cumulative shortfall — that is, supply compared to historical averages — of 4.6 million housing units in the years since 2000. That number is especially stark considering that builders constructed a surplus of homes in the bubble years of the last decade.

Investors have turned bearish on publicly-traded builders, even as the fundamentals remain tilted in their favor. On a Tuesday call with analysts, KB Home KBH, -2.95%   CEO Jeffrey Mezger addressed that issue, and reiterated the company’s commitment to lower-priced homes, where most housing-watchers think the greatest need — and the greatest opportunity — sits.

“I keep getting back to the current inventory levels which are low. While the national numbers are four months, many of the markets we’re in today at still two months, month-and-a-half, and then when you get into the price points we play at, it’s even less. So there’s not a lot of inventory out there at the affordable price band and much of the headlines, I think, are tied to higher price points that are seeing some slowdown and we’re trying to stay ahead of that,” Mezger said. “We think market conditions are very good and continue to see a great opportunity as we head into 2019.”


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https://www.marketwatch.com/story/new-home-sales-tick-up-as-housing-shortfall-tops-4-million-2018-09-26