Tag Archives: South Salem NY Homes for Sale

New home sales surge 12% | South Salem Real Estate

Sales of new U.S. single-family homes increased more than expected in May and business activity contracted moderately this month, suggesting the economy was on the cusp of recovering from the recession caused by the COVID-19 crisis.

But a resurgence in confirmed coronavirus cases across the country threatens the nascent signs of improvement evident in Tuesday’s economic data. Many states have reported record daily increases in COVID-19 infections, which health experts have blamed on local governments reopening their economies too soon. The economy has stabilized as businesses reopened after closing in mid-March to control the spread of the respiratory illness.

“The renewed upsurge in COVID-19 cases across the South and the West poses a clear downside risk over the coming months but, with a second wave of state-wide lockdowns appearing unlikely for now, we are assuming this will act as a modest drag on the economic recovery, rather than resulting in a renewed downturn,” said Andrew Hunter, senior U.S. economist at Capital Economics.

New home sales jumped 16.6% to a seasonally adjusted annual rate of 676,000 units last month, the Commerce Department said. New home sales are counted at the signing of a contract, making them a leading housing market indicator. Last month’s increase left sales just shy of their pre-COVID-19 level.

Sales dropped 5.2% in April to a pace of 580,000 units. Economists polled by Reuters had forecast new home sales, which account for about 14.7% of housing market sales, rising 2.9% to a pace of 640,000 in May.

New home sales are drawn from building permits. Sales surged 12.7% from a year ago in May. The report followed on the heels of data last week showing home purchase applications at an 11-year high in mid-June and permits rebounding strongly in May.

The broader economy slipped into recession in February, leaving nearly 20 million people unemployed as of May.

In a separate report on Tuesday, data firm IHS Markit said its flash U.S. Composite Output Index, which tracks the manufacturing and services sectors, rose to a reading of 46.8 in June from 37 in May. A reading below 50 indicates contraction in private sector output.

The improvement was led by an ebb in the manufacturing sector downturn, with the flash Purchasing Managers Index climbing to 49.6 from 39.8 in May. The survey’s services sector flash PMI rose to 46.7 from 37.5 in May.

Activity is also picking up around the globe. The IHS Markit’s euro zone Flash Composite Purchasing Managers’ Index recovered to 47.5 from May’s 31.9.

Stocks on Wall Street extended gains on the data and hopes of more fiscal stimulus. The dollar fell against a basket of currencies. U.S. Treasury prices were lower.

UNEMPLOYMENT HURDLE

The market for new homes is being supported by historic low interest rates and a preference among buyers for single-family homes away from city centers as companies allow employees more flexibility to work from home amid the coronavirus crisis.

But with record unemployment and companies freezing hiring to deal with weak demand and keep costs under control, a sharp rebound in the housing market is unlikely.

“If the overall economy seems to be slowing, the public may not be quite as confident about putting a down payment on an expensive new home,” said Chris Rupkey, chief economist at MUFG in New York. “Many businesses are insolvent and there will be less spending from unemployed Americans as well that could keep this economic recovery in the slow lane for some time.”

Last month’s increase in new home sales did little to offset a plunge in sales of existing homes in April and May, leaving intact economists’ expectations for a record tumble in residential investment in the second quarter. Homebuilding also rebounded moderately in May after slumping in April.

Last month, new home sales shot up 45.5% in the Northeast and advanced 29% in the West. They rose 15.2% in the South, which accounts for the bulk of transactions, but fell 6.4% in the Midwest.

The median new house price rose 1.7% to $317,900 in May from a year ago. New home sales last month were concentrated in the $200,000 to $400,000 price range.

New homes priced below $200,000, the most sought after, accounted for about 15% of sales.

There were 318,000 new homes on the market in May, down from 325,000 in April. At May’s sales pace it would take 5.6 months to clear the supply of houses on the market, down from 6.7 months in April. Nearly two-thirds of the homes sold last month were either under construction or yet to be built.

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reuters.com/article/us

HGAR news | South Salem Real Estate

New York COVID Hospitalizations, Deaths Hit Record Low
New York Gov. Andrew Cuomo, who announced the opening of the 3.6-mile shared bicycle and pedestrian path on the new Gov. Mario M. Cuomo Bridge today, reported that the total number of hospitalizations (1,607) and 27 COVID-19 related deaths (Sunday, June 14) were the lowest since the pandemic began in March.
In connection with the reopening process, he said he would be raising the maximum amount of people allowed at gatherings in regions in phase three of the reopening from 10 to 25. Western New York enters phase three tomorrow and the Capital Region will progress to that stage on Wednesday.
The Mid-Hudson is eligible to enter phase three on Tuesday, June 23. For further information on the new bicycle-pedestrian path on the bridge, go to the governor’s announcement.
NEW YORK STATE NEWS
Governor Threatens to Reverse Reopenings if Safety Rules Not Followed
On Sunday Gov. Andrew Cuomo, frustrated over 25,000 reports of reopening violations, predominantly in Manhattan and the Hamptons, warned that the state would take action against businesses and localities that violate or fail to enforce safety regulations.
He stressed that local governments are charged with compliance and that a region’s reopening could be reversed or delayed if these violations are allowed to continue.
“Lots of violations of social distancing, parties in the street, restaurants and bars ignoring laws,” Cuomo said on Twitter. “Enforce the law or there will be state action.” Today, he told local governments: “Do your job.” See governor’s announcement.
Local Sales Tax Collections Down $437M in May
The coronavirus pandemic continues to batter the New York State economy.
Sales tax revenue for local governments in May fell 32.3% compared to the same period last year, according to a report released Friday by New State Comptroller Thomas P. DiNapoli. Sales tax collections for counties and cities in May totaled $918 million, or $437 million less than 2019.
The sharp decline in revenues was widespread across the state, ranging from a drop of 19.5% in Westchester County to a 41.5% decline in Tioga County. New York City experienced a 31.9% decline, calculating out to $196 million in lost revenues for the month. View further information on the sales tax report.
NATIONAL NEWS
CMBS Delinquency Rate Posts Highest Increase Since Great Recession
The CMBS delinquency and special servicing rate in May recorded the largest increase since the metric was introduced in 2009, according to a Trepp report.
The delinquency rate in May for commercial mortgage-backed securities increased to 7.15%, according to the Trepp May CMBS Delinquency Report. A total of 5% of those troubled loans were identified as 30 days past due. In May, $9.4 billion involving 243 commercial loan notes were sent to special servicing, according to servicer and watchlist data compiled by Trepp.
The Trepp report states that initial reports in June indicate troubled commercial mortgages are centered on single-asset or single-borrower deals, most backed by hotels or malls. Click Here for further coverage.
Multifamily Rents Continue to Struggle
In what is normally prime leasing season, multifamily rents continue their decline thanks to the coronavirus.
In May, rents declined nationally by .3% month-over-month, with the largest drops in gateway markets, according to a report released by YardiMatrix.
The May numbers were an improvement over the previous month when rents fell by .5%. The markets that were hit the hardest included Boston and San Francisco, each down 1%; Chicago was down .9%; and Los Angeles saw a decline of .7%. For further details, see Globest.com report.

Mortgage rates average 3.23% | South Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.23 percent, the lowest rate in our survey’s history which dates back to 1971.

“The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April,” said Sam Khater, Freddie Mac’s Chief Economist. “While many people are benefitting from low mortgage rates, it’s important to remember that not all people are able to take advantage of them given the current pandemic.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.23 percent with an average 0.7 point for the week ending April 30, 2020, down from last week when it averaged 3.33 percent. A year ago at this time, the 30-year FRM averaged 4.14 percent.  
  • 15-year fixed-rate mortgage averaged 2.77 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.60 percent.  
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.14 percent with an average 0.4 point, down from last week when it averaged 3.28 percent. A year ago at this time, the 5-year ARM averaged 3.68 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.

The real deal breaks down stimulus bill | South Salem Real Estate

A breakdown of what it means for developers, landlords, agents and lenders

“In moments of crisis,” the legendary developer Big Bill Zeckendorf was fond of saying, “one’s world tends to become simplified.” Even those with big dreams (pretty much every successful real estate professional) get down to the basics: survival.

This is a crisis unlike one we’ve ever seen. The world has stopped. “It’s the first time ever that we’ve had a chain of supply shock to the system and a demand shock,” developer Steve Witkoff said. To help the U.S. economy recover from that shock, the government has passed a $2 trillion economic stimulus package, the largest of its kind in modern U.S. history. 

What sort of help can the real estate industry expect? 

The Real Deal‘s editorial team has broken down key aspects of the stimulus package that are most relevant to different stakeholders from across the industry, from multifamily landlords to residential brokers, from lenders to builders to investors. So much of what exactly the stimulus will mean for real estate is still being hammered out, but this is a snapshot of the current state of play. 

“A good first step,” is how REBNY president Jim Whelan described the stimulus to us. He did note, however, that “increasing attention is going to have to be paid to the commercial market — mortgages, lenders, as well as landlords.”

Landlords and Investors 


The stimulus package offers no direct relief for landlords. They might see respite indirectly, however, through the one-time $1,200 check to most individuals making up to $75,000. Unemployment insurance has been expanded to include gig workers, with the federal government offering up to an additional $600 per week on top of what states provide. Renters (and homeowners) can use that cash to make their monthly payments. 


However, Fannie Mae and Freddie Mac are offering borrowers impacted by the pandemic up to 90 days of forbearance as long as they do not evict renters. For those who own Section 8 properties, the stimulus provides a total of $1 billion in funds to help maintain normal operations and “make up for any reduced tenant payments as a result of the coronavirus,” according to law firm Nixon Peabody. 


Alan Hammer, a multifamily-focused attorney at Brach Eichler, is urging clients to reach out to existing lenders to see what programs they could qualify for, in lieu of federal or state help.


“There’s nothing really in the CARES Act that provides for landlords,” Hammer said, referring to the stimulus package’s official name — Coronavirus Aid, Relief, and Economic Security Act. “But you’ll never hear me complain that life has been unfair to landlords as a group.”

Image

Jay Martin, Executive Director of landlord group CHIP

Francis Greenburger, who heads development firm Time Equities, said the plan “could be better,” adding that 90-day forbearance programs may not be helpful in the long run.

“Kicking the can down the road is not as good as it sounds if the crisis is still here in three to four months,” Greenburger said.

There is, however, one provision tucked into the bill that could see big landlords reap big savings. 

Under the existing tax code, landlords can use losses including depreciation to offset other taxes up to a total of $250,000 for individuals and up to $500,000 for joint filers. The new stimulus lifts that restriction for three years, and the New York Times, citing a draft congressional analysis, estimated that the program could result in investors saving $170 billion over 10 years. (All taxpayers with depreciable assets or losses will also be eligible, so it’s unclear how much of that sum would represent savings in real estate.) 

Depreciation on prime real estate holdings can easily come out to millions of dollars a year. According to one tax attorney, a $100 million building with “straight-line” depreciation over a 40-year lifespan would yield $2.5 million in depreciation losses a year. Depending on the owner’s income in a given year, the removal of the “excess business loss” cap could yield substantial tax savings. If you are moving homes in the Bournemouth area then bournemouth-removals.co.uk are very professional and cost effective.

The stimulus also allowed lawmakers to mend a “drafting error” from the 2017 tax bills — also known as the “retail glitch” — which made interior improvements for nonresidential properties ineligible for bonus depreciation. Retailers and restaurants will now have the option to deduct 100 percent of the cost of such improvements in the first year, instead of depreciating it over several years — an option which machinery owners, for example, already had.

Affordable Housing Developers

The bill would also add significant liquidity to municipal markets. The Fed is now exercising its power to buy municipal bonds, which the stimulus expanded to include all types of bonds, not just short-term ones. Because bonds allow municipalities to raise money cheaply, that’s good news for affordable housing developers who use tax credits to finance their projects.


Developers say enabling the construction of such product is more important than ever.


“Affordable housing could be more dramatically affected in the short term,” said Ron Moelis, CEO of L+M Development Partners, one of the most active affordable housing developers in New York City. Moelis said more of those tenants may lose their jobs because “they don’t have as much of a social safety net.”


Agents and Brokerages

Brokers used to eating what they kill are usually left out of government bailouts, but not this time.  


Unlike with previous stimulus packages, this one extends unemployment insurance to independent contractors, which is how the majority of the nation’s 2 million real estate agents operate. (The amount is based on individual state formulas, and would be in addition to the up to $1,200 provided to individuals earning $75,000 or less.


For brokerage firms, the Small Business Association has two loan programs — including one that may cover the cost of lost commission.

The Paycheck Protection Program provides loans up to $10 million to cover rent, mortgage interest, utilities and payroll. According to the National Association of Realtors, lost commissions count as payroll. The other loan program, dubbed the Economic Injury Disaster Loan, provides a $10,000 advance on emergency loans. The loans are limited to $2 million.

SBA loan payments will also be deferred for six months.


REBNY’s Whelan said he was happy to see the small business assistance programs centered around employment. “That was thoughtful and will hopefully play a critical role in getting businesses back on their feet,” he said. 


The measures come as welcome news for firms that are already reckoning with significant layoffs or pay cuts, among them CompassRealogy, and Meridian Capital Group. But given that commissions are the bulk of a broker’s income, layoffs even in bad times are less common compared to other industries. “There isn’t a tendency to go in that direction,” said CBRE’s Mary Ann Tighe.


Rent, however, is a real concern. “I promise you other brokerages are not paying rent,” said Stephen Shapiro of L.A. luxury firm Westside Estate Agency.  


Retailers and Small Businesses

Similar to brokerages, retailers, restaurants and other small businesses are eligible for the Paycheck Protection Program. 


Businesses with fewer than 500 employees are eligible for the loan, which is designed to keep workers on payroll. The U.S. Small Business Administration said it will forgive loans “if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.” 


“This should give landlords some comfort that their tenants will be able to pay rent eventually,” said Jeff Friedman, a partner at law firm Hall Estill, “if not immediately.” 

Lenders

Tom Barrack already thinks it’s the end of CMBS as we know it. 

The founder of Colony Capital and close associate of President Trump penned a dire letter on Medium on March 22, in which he predicted that the coronavirus pandemic and subsequent shutdown of sectors of the U.S. economy could lead to margin calls, foreclosures, evictions and potential bank failures. The impact, the polo-playing billionaire warned, could be greater than that of the Great Depression.

What happens to mortgage servicers remains unclear. Last week, the Mortgage Bankers Association estimated that lenders could be on the hook for at least $75 billion on short notice, and possibly more than $100 billion if homeowners and landlords sought forbearance en masse. 

But the association noted that the stimulus “includes funding that can be leveraged to create a broad, dedicated Federal Reserve liquidity facility.” It called for the government and the Fed to rapidly establish a program to help mortgage servicers provide the necessary forbearance.

Heidi Learner, chief economist for Savills, noted that “while servicers can go into the facility to borrow from the Fed, the fact of the matter is that it’s a cash-negative position.”

“They have to borrow to advance cash that’s not coming in,” Learner said. “I don’t see how this is sustainable.”


Construction 

Hardhats can expect significant support. Infrastructure and construction could be eligible for $43 billion of the $340 billion in funds outlined in the appropriations section of the package, according to trade publication Engineering News-Record

Trade group Associated General Contractors told the publication that the stimulus provisions that would help the industry include ones that allow companies to delay paying payroll taxes through Jan. 1, and allowing firms to “carry back” net operating losses for five years to offset past earnings. Another section of the bill allows firms structured as partnerships, S-corporations and other pass-through entities to deduct all 2020 losses in the current tax year.

Construction workers could also avail of direct payments from the government, and smaller construction businesses would also be eligible for the same types of SBA loans brokerages can take advantage of. 


REITs

Real estate investment trusts were mentioned briefly in the bill — but only to exclude them from part of a temporary change to rules around net operating losses. 

Most companies that paid taxes in recent years but had losses later on may be able to obtain tax refunds by carrying those losses back for up to five years.

In a memo analyzing the stimulus package, law firm Skadden Arps said that “despite the provision of this relief, loans, leases and other contracts likely will need to be restructured and renegotiated. Property owners, operators and lenders will need to collaborate to make this happen.”

Big Bill Zeckendorf would have agreed with that sentiment. The rotund tycoon accumulated suits with the same gusto that he did properties, and once said of his tailor: “By now he knew that I would always pay. But he also knew that he might have to wait.”

This special report was written by Hiten Samtani and Danielle Balbi,
with reporting from TRD’s Georgia Kromrei, Rich Bockmann,
Kevin Sun, E.B. Solomont and Kathryn Brenzel.

www.therealdeal.com

Home Price Appreciation up 3.8% | South Salem Real Estate

National home prices continued to increase in December 2019. Nineteen metro areas had positive home price appreciation while Cleveland saw home price decline in December.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index, released by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 5.7% in December, following a 5.8% increase in November. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 3.8% annual gain in December, up from 3.5% in November. It was the highest year-over-year gain since February 2018. Home prices are expected to continue rising in 2020 as tight inventory remains a concern.

Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 7.6% in December, after a 3.3% increase in November. On a year-over-year basis, the FHFA Home Price NSA Index rose by 5.2% in December, after an increase of 5.0% in November.

In addition to tracking home price changes nationwide, S&P also reported home price indexes across 20 metro areas. In December, the annual growth rates of the 20 metro areas ranged from -1.6% to 11.4%, while nine of the 20 metro areas exceeded the national average of 5.7%. Among the 20 metro areas, Phoenix, Seattle and San Francisco had the highest home price appreciation in December. Phoenix led the way with an 11.4% increase, followed by Seattle with a 9.4% increase and San Francisco with an 8.7% increase. Cleveland (-1.6%) had negative home price appreciation in December.

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Creepiest house in the Thousand Islands | South Salem Real Estate

The Thousand Islands — if you’ve even heard of them — are probably best known as the home of a certain sweet-and-spicy salad dressing. Unless, of course, you happen to be the fancy type of person who builds themselves a villa. The islands on the St. Lawrence River dividing New York from Canada have been sprouting ritzy summer homes for the rich and famous for more than a century. Which is a bit strange, when you think about how one of the earliest of those homes was clearly the target of a family-destroying curse.

House of Horrors

As far as we can tell, there aren’t any ghost stories associated with Carleton Villa — none that made it on to the internet, anyway. Maybe that’s because there don’t really need to be. The house’s well-documented history is more than enough on its own to give any passerby the willies.

Let’s go back to the beginning. In 1894, William Wyckoff was on top of the world. About eight years previous, he and two of his business partners had purchased the Remington Typewriter Company and turned it into an incredibly lucrative business. Looking for some well-earned R&R, he commissioned the architect William Henry Miller to design a luxurious house on Carleton Island, one of the 1,800 islands in the Thousand Island archipelago.

It was beautiful. Covering seven acres, the estate was notable for the stately stonework, towering turrets, and eye-popping stained glass that was the envy of any passing boater. But even before Wyckoff and his family moved in, a dark shadow began to pass over them. One month before move-in day, William’s wife Francis passed away from cancer. But that was only the beginning. The very first night that the rest of the family moved in, William Wyckoff suffered a heart attack in his sleep. He never woke up.

The family fortunes only fell further. Clarence Wyckoff, the youngest son, inherited the house after his father’s death. Then the Great Depression hit — hard. As the bank accounts drained, desperate measures became necessary. The Wyckoffs sold Carleton Villa to General Electric, who planned to demolish the building for scrap and build a new employee resort and plant on the site. But this, too, failed to happen. That beautiful stained glass was removed — along with the rest of the windows — and in the service wing, the entire floor of a bedroom was cut directly out. The marble cladding around the mansion’s most prominent feature, the four-story tower, was removed as well, greatly weakening its foundation. But when World War II broke out, the demolition stopped. It never started again.

Forgotten America / Facebook

Carleton Today

It wouldn’t have been pleasant to live in Carleton Villa in those days, but imagine what it’s like now. Other than the occasional urban spelunker, the house has been virtually abandoned ever since. Its tower is now long gone, torn down when it began to threaten the rest of the structure. But perhaps not all hope is lost. In fact, are you in the market? If you’ve got $495,000 handy, the place could be yours — as long as you’re all right with a bit of a fixer-upper. Elsewhere on Carleton Island, other monied residents with more modern houses have firmly established themselves. You know what that means. Once you’ve got the spooky old house, all you need is a mask and Halloween sound effects and you’re three-quarters of the way to scaring off your neighbors and getting an island to yourself.

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https://curiosity.com/topics/this-is-hands-down-the-creepiest-house-in-the-united-states-curiosity

Property Taxes Account for 40 Percent of State and Local Tax Revenue | South Salem Real Estate

NAHB analysis of the Census Bureau’s quarterly tax data shows that $594 billion in taxes were paid by property owners over the four quarters ending in Q1 2019.[1] It has been seven years since four-quarter property tax revenues declined.

After accelerating in the third and fourth quarters of 2017, the four-quarter growth rate of property tax revenue has slowed in each quarter since. Increasing by 18.1%, corporate income tax revenues grew at a much faster pace than any other major category of tax receipts on a year-over-year basis. State and local individual income tax revenues edged up 1.2% while property and sales tax collections increased by 3.3% and 5.2%, respectively.

Property taxes accounted for 39.6% of state and local tax receipts—the second consecutive quarterly increase. In terms of the share of total receipts, property taxes are followed by individual income taxes (28.2%), sales taxes (28.0%), and corporate taxes (4.2%).

The ratio of property tax revenue to total tax revenue from the four sources shown above remains 2.6 percentage points above its pre-housing boom average of 37%.

The share of property tax receipts among the four major tax revenue sources naturally changes with fluctuations in non-property tax collections. Non-property tax receipts including individual income, corporate income, and sales tax revenues, by nature, are much more sensitive to fluctuations in the business cycle and the accompanying changes in consumer spending (affecting sales tax revenues) and job availability (affecting aggregate income). In contrast, property tax collections have proven relatively stable, reflecting the long-run stability of tangible property values as well as the smoothing effects of lagging assessments and annual adjustments. Property tax receipts are the least volatile revenue source, followed by sales taxes, individual income taxes, and corporate income taxes, in order of increasing volatility.[2]

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Home equity withdrawals fall to new low | South Salem Real Estate

House

After declining for two consecutive quarters, tappable equity rose in the first quarter of the year, but it appears homeowners are still reluctant to touch it.

According to the latest report from Black Knight, homeowners tapped just 1% of available equity in the first quarter – the lowest share since it began tracking the metric in 2008.

Nearly 44 million homeowners with a mortgage have more than 20% equity in their home, which comes to about $136,000 of available equity per person and an aggregate amount of $5.98 trillion.

Last summer, the aggregate amount of tappable equity reached an all-time high of $6.06 trillion, a milestone Black Knight says we’ll likely surpass as home prices continue to rise this summer.

That said, while tappable equity is growing, the rate of that growth is slowing significantly along with home prices, falling from 16% a year ago to just 3% in the first quarter.

Major cities, including San Jose, San Francisco, Seattle, Houston, Portland, and Baton Rouge have all seen tappable equity volumes decline in the last year, the report shows.  

Meanwhile, Los Angeles continues to hold the title of the city where homeowners have the most tappable equity. In fact, California itself holds 37% of the nation’s equity, nearly seven times more than the runner-up, Texas.

But despite considerable equity gains, homeowners continue to show a reluctance to touch this source of wealth.

Black Knight’s report shows that just $54 billion in equity was withdrawn in the first quarter, the lowest volume in four years.

Both cash-out refinance withdrawals and HELOCs were down, with HELOC withdrawals hitting a five-year low and falling below cash-out refi volume for the first time in eight years.

Black Knight says rates are likely to blame.

“HELOC withdrawals as a share of available equity have been cut in half over the past three years as homeowners have increasingly steered away from the product,” the report states. “Cash-out withdrawals as a share of available equity are down a much more modest 16% over that same span. Rising interest rates have likely been the driving force behind declining HELOC equity withdrawals.”

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https://www.housingwire.com/articles/49466-home-equity-withdrawals-fall-to-new-low?utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=74236288&_hsenc=p2ANqtz–_RPpnTr_PWGur1iiM83XvQEyPJM69u5aoyeLA1IlZzU3FG1tVQjkNDrO80nlHOtt23STTcCE-tkx6xvBN1Dx1U2ckcA&_hsmi=74236288

SALT workaround officially squashed by Treasury | South Salem Real Estate

The Treasury Department on Tuesday issued final regulations that will officially prohibit high-tax states from utilizing workarounds to evade the new cap on state and local tax (SALT) deductions.

As part of the Tax Cuts and Jobs Act, SALT deductions were capped at $10,000 – which is well below the average amounts claimed by individuals residing in states such as New York, California and New Jersey. The average deduction claimed in California, for example, is $22,000, according to Kevin de Leon, a Democratic member of the California state senate.

Therefore, in response, a number of state governments proposed or enacted legislation that would allow taxpayers to make charitable contributions to an established state fund in order to earn a credit. The goal would be to allow the residents to take the full amount given as a deduction by transforming a non-deductible payment into a charitable contribution.

However, the IRS blocked that strategy through guidelines issued on Tuesday, which require taxpayers to subtract the value of their state and local tax deductions from their charitable contributions.

The regulations also provide exceptions for state tax deductions and tax credits of no more than 15 percent of the amount of the donation.

The regulations apply to contributions made after Aug. 27, 2018.C

Treasury Secretary Steven Mnuchin said in 2017 that he hoped it sent a message to state governments that “they should try to get their budgets in line.”

Meanwhile, Democrats have said they would try to undo the cap on state and local tax deductions. New York Gov. Andrew Cuomo has said the new tax change would lead to a decline in revenues in the state because taxpayers would leave.

The Treasury said it would continue to evaluate the issue and release further guidance if necessary.

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https://www.foxbusiness.com/personal-finance/salt-workaround-squashed-treasury-department

Mortgage rates hit two year low | South Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate fell to 3.82 percent, the sixth consecutive weekly decline and its lowest level since September 2017.

Sam Khater, Freddie Mac’s chief economist, says, “While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates that there can be a wide dispersion among mortgage rate offers. By shopping around and getting a single additional mortgage rate quote, a borrower can save an average of $1,500.”

“These low rates are also good news for current homeowners. With rates dipping below four percent, there are over $2 trillion of outstanding conforming conventional mortgages eligible to be refinanced – meaning the majority of what was originated in 2018 is now eligible,” he says.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.82 percent with an average 0.5 point for the week ending June 6, 2019, down from last week when it averaged 3.99 percent. A year ago at this time, the 30-year FRM averaged 4.54 percent. 
  • 15-year FRM averaged 3.28 percent with an average 0.5 point, down from last week when it averaged 3.46 percent. A year ago at this time, the 15-year FRM averaged 4.01 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent with an average 0.4 point, down from last week when it averaged 3.60 percent. A year ago at this time, the 5-year ARM averaged 3.74 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.