Earlier this year, NAHB released 2017 property taxes by state as a blog post and as a longer special study. However, in light of changes made to the tax code by the Tax Cuts and Jobs Act (TCJA), further refining the statistics by congressional district is instructive to both members of Congress as well as their constituents.
Property Tax Payments, Effective Tax Rates, and Intrastate Comparisons
The highest average property tax bill was $11,389, paid by home owners residing in New York’s 17th district (Rockland County and portions of Westchester County). The smallest average annual real estate tax bill was $425, paid by home owners in Alabama’s fourth district (Franklin, Colbert, Marion, Lamar, Fayette, Walker, Winston, Cullman, Lawrence, Marshall, Etowah, and DeKalb Counties). The congressional districts in which homeowners pay the 20 largest and 20 smallest annual property tax bills are shown in Figure 1.
It is not surprising that many of the districts with the highest property tax rates are in states that impose the highest average property tax rates. Figure 2 illustrates the geographic concentration of high- and low-tax congressional districts.
For example, 17 of the 20 congressional districts with the highest property tax rates are in three states: New Jersey, New York, and Illinois (Figure 3).
Source: U.S. Census Bureau, 2017 American Community Survey
Congressional districts in New York State exhibited the most variability of effective property tax rates – equal to the percentage of the property value paid in taxes each year (see Figure 4). The difference between rates in the 25th and 13th districts was 2.43 percentage points in 2017, the largest such difference within a state. The average property tax rate in the 25th district (2.79%) is more than six times greater than that in the 13th (0.36%). The smallest differential within a state with five or congressional districts was in Washington, where the highest effective property tax rate is 1.04% (WA-10) and the lowest is 0.75% (WA-7).
Property Taxes and the Tax Cuts and Jobs Act
The state and local tax (SALT) deduction decreases federal tax liability by allowing taxpayers to deduct the total of property tax payments plus either sales or income taxes paid to state and local governments during the year. Under prior law, this deduction was uncapped but disallowed for taxpayers forced to pay the alternative minimum tax (AMT). However, the Tax Cuts and Jobs Act (TCJA) capped home owners’ SALT deduction at $10,000 per year (through 2025).
The value of a tax deduction is determined by the amount deducted from taxable income and the taxpayer’s top marginal tax rate at which the income would have been taxed. Thus, under prior law, a taxpayer in the top tax bracket (39.6%) who paid $10,000 in state income taxes and $10,000 in property taxes could have decreased their federal tax liability by $7,920 [39.6% x ($10,000+$10,000)].
Until the TCJA-made change expires in 2026, that amount would be reduced to $3,700 (equal to the $10,000 cap multiplied by the new, top marginal tax rate of 37%). The effect of this change on after-tax income is obvious in certain high-tax congressional districts. For example, the average yearly bill for property taxes alone exceeded $10,000 in six districts in 2017 (NY-17, NY-3, NJ-11, NJ-7, NY-4, and NJ-5).
But as AMT status affects a taxpayer’s possible SALT deduction, one must bear in mind the significant changes made to the AMT by the TCJA. The most impactful of these changes was the increase of the income threshold at which the AMT exemption begins to phase out. For a married couple filing jointly, the phaseout threshold went from $160,900 to $1 million in 2018.
As a result, the number of AMT-affected taxpayers is expected to fall 90%–from five million to 500,000—between tax years 2017 and 2018. The taxpayers who no longer face the AMT may now be able to claim a $10,000 deduction that was previously unavailable to them, lowering their tax liability.
These seven products will make your home a DIY haven. Find out what the Family Handyman editors are falling in love with right now.
1 / 7
Telescoping ladders allow you to reach the same height as standard extension ladders, but they eliminate all ’re lighter and easier to transport and take up far less space in your garage. There are a few different brands, and each has models that extend to various heights. We got our hands on the Xtend + Climb 770P, and we’re big fans. It retracts to just 32 in. tall and extends in 1-ft. increments, up to 12 ft. And it weighs only 27 lbs. You can get one online for about $190.2 / 7
My go-to tape
I use a tape measure nearly every day and rely on them for accuracy in detailed woodworking and metalworking projects, and for large-scale carpentry. But I don’t always need to lay out 35-ft.walls, so I prefer this 16-ft. Milwaukee compact tape measure for day-to-day work. It’s easy to carry in my tool belt or clip to my pocket. The strong, nylon-coated blade is printed on both sides, so I can read measurements from any position. The rugged outer case has survived many drops from the top of my ladder to my concrete shop floor. You can find one for about $11 at home centers and online. — April Wilkerson, Contributing Editor3 / 7
The bits in this StubbyBit set by Milescraft may look funny, but they’re super practical. They solve the problem of making pilot or dowel holes in confined spaces—for example, to add shelf pin holes in a narrow cabinet.
If you combine one with a right-angle bit, you can drill a pilot hole nearly anywhere. The hex shank makes going from drill bit to driver bit very fast, and the short length means they’re less likely to snap off. Pick up a set for about $14 online. When you need them, you’ll be glad you did.
By the time we’d get to the dinner dishes after putting the kids to bed, my wife and I would often find melted cheese and lasagna residue stuck to our plates. But when I remodeled our kitchen, I installed a Kohler faucet with a sweeping sprayer pattern that acts like a scraper to rinse off dishes. It doesn’t replace elbow grease in extreme cases of dried-on dinner, but it definitely works better than the faucet we had before. This is the Simplice kitchen faucet, which is available at Home Depot for $180, but Kohler makes several models with this convenient feature. — Mike Berner, Associate Editor
If you’ve struggled to get a grip on short wires or to pull cable through an electrical box, compound-motion pliers may provide the extra gripping power you’re looking for. A few brands make them, but I’ve had the DeWalt long nose pliers in my belt for the recent electrical work I’ve been doing. You can find compound-motion pliers at home centers and online. This DeWalt long nose costs $15. It’s also available in a set (less than $40) that includes side cutters and lineman’s pliers.
Headlamps provide hands-free light that follows your line of vision. That makes them a great tool for DIYers, whether you’re putting away your string trimmer after sunset, navigating a dark attic or crawl space, or working under the hood. The downside is that most headlamps are spotlights that focus their light on what’s in front of you. This OV LED Broadbeam Headlamp gives you 210 degrees of illumination, lighting up your surroundings so you can find your tools in the yard or change that tire in the dark. It’s powered by three “AAA” batteries and has two brightness settings. OV LED headlamps are available online for $15.
If you’re thinking about a way to upgrade your bathroom, here’s an easy one. Put a frame around the plain mirror above your vanity. MirrorMate simplifies that by cutting a frame to fit for you. After you supply the mirror dimensions on its website, including how much space is around your mirror, it will ship a frame to your home along with special connectors and glue to put it together. Just glue the ends together, pound the connectors in, and stick it on. You can choose from 65 frame styles in different pricing tiers at mirrormate.com.
Every product is independently selected by our editors. If you buy something through our links, we may earn an affiliate commission.
Real estate agents arrive at a brokers tour showing a house for sale in San Rafael, California.Getty Images
National home prices rose 3.7% annually in March, down from 3.9% in February, according to the S&P CoreLogic Case-Shiller home price index.
Prices had been seeing double-digit annual gains, but they are gone. The largest annual gain was 8.2% in Las Vegas; one year ago, Seattle had a 13% gain a year ago but has dropped dramatically to just 1.6%. The 20-City Composite dropped from 6.7% to 2.7% annual gains over the last year.
“Given the broader economic picture, housing should be doing better,” David Blitzer, managing director and Chairman of the Index Committee at S&P Dow Jones Indices, wrote in the report. He noted that mortgage rates and unemployment were low, along with low inflation and moderate increases in real incomes.
“Measures of household debt service do not reveal any problems and consumer sentiment surveys are upbeat. The difficulty facing housing may be too-high price increases,” he added.
The 10-City Composite rose 2.3% annually, down from 2.5% in the previous month. The 20-City Composite gained 2.7%, down from 3.0% in the previous month.
Even with today’s smaller gains, prices are still rising almost twice as fast as inflation. In the last 12 months, the S&P Corelogic Case-Shiller National Index is up 3.7%, double the 1.9% inflation rate.
Prices are still higher annually in all of the 20 major cities measured by the indices, but some are getting very close to negative territory. Prices in Los Angeles, Seattle, Chicago, San Diego and San Francisco are just over 1% higher than March 2018.
Las Vegas, Tampa and Phoenix are seeing the biggest gains. These were the markets hit hardest during the housing crash and therefore still have the farthest to go to fully recover.
Other housing indicators are also weaker than expected this year. Existing home sales have been relatively flat all spring, despite falling mortgage rates.
“We just loved it, and all our friends and family loved it,” said Mr. Nordquist, 51, a retired financier from Manhattan. “It had to be here, and it had to be now.”
David and Sindhu Nordquist deliberated for years about where to buy a second home, and thenlast summer, while renting a house in the Hamptons for the first time, they decided to find a place on the East End of Long Island to call their own.
With Timothy O’Connor, an agent at Halstead, the Nordquists looked at more than 60 listings, searching for “a beach house in the woods,” Mr. Nordquist said. “We wanted privacy and didn’t want neighbors around us.”
Their timing was fortunate. In the usually high-flying Hamptons, the housing market is in a rut. Inventory is up; prices are down. The median sale price of a single-family home in the Hamptons has dropped 7.9 percent, from $933,750 in the first quarter of 2018 to $860,000 during the first three months this year, according to a report from Douglas Elliman Real Estate.
After searching for several months, the Nordquists found the serenity they were looking for down a long gravel driveway: a 1991 contemporary home with 3,300 square feet, a heated pool and a pool house, on a woodsy 1.82 acres. Initially listed at $1.825 million in August 2017, the property went on and off the market. When the couple visited last December, the price had dropped to $1.6 million. They bought it this spring for $1.35 million, with plans to paint, change the windows and convert the wood-burning fireplaces to gas.David Nordquist at his new Hamptons home, which sits on 1.82 acres and has a heated pool and a pool house.CreditDaniel Gonzalez for The New York Times
“We negotiated pretty hard on the price,” Mr. Nordquist said. “I bargained a lot. I felt the market was softening.”
As Aspasia G. Comnas, the executive managing director of Brown Harris Stevens, observed, “Sellers in the Hamptons are used to the market always going up every year, and if they priced aggressively it didn’t matter.” But in today’s market, homes that are not priced competitively “are going to have to go through a series of price reductions” before they sell, she said — at all levels of the market, not just at the high end.
Buyers seem to be staying on the sidelines. The number of single-family homes on the market during the first three months of 2019 was nearly double that of a year earlier: 2,327, up from 1,201. And sales of single-family homes have dropped, to 287 from 350 in 2018.
One thing making buyers hesitate, said Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of the Douglas Elliman report, is the new federal tax code approved by Congress in late 2017, which makes it more expensive to own luxury property because homeowners can deduct only up to $10,000 in state and local taxes from their federal income taxes.
“The Hamptons are trending much like the New York City metro area,” Mr. Miller said, noting that the situation is similar in other parts of the Northeast and in California, where real estate is pricey and property taxes are high.
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“The slowdown in sales represents the disconnect between sellers, who are anchored to better times, and buyers, who have a lot of changes to process,” Mr. Miller said.
Any sense of urgency was further quelled by the “intense volatility of the financial markets at the end of last year, along with the close linkage of Wall Street to the Hamptons,” he added.
A 17 percent dip in bonuses in the finance industry in 2018 likely also discouraged Wall Street workers from buying second homes in the Hamptons. The average bonus for financial market employees in 2017 was $184,400; in 2018, it dropped to $153,700, according to a report from the New York State Comptroller.
Those who did buy, though, found bargains.
Figuring it didn’t hurt to look, Maria and Stephen Zak, of Saddle River, N.J., toured a 2007 harbor-front house with four bedrooms, four and a half bathrooms, a heated pool and a hot tub, on an acre in East Hampton, listed for $3.2 million. “We loved it, but it was way out of our budget,” said Mr. Zak, 53, the chief financial officer of a boutique investment bank.
They had been looking for a second home for about a year. The price of the 3,400-square-foot house had already been reduced from the original 2017 asking price of $3.995 million. So “we threw out an offer we were comfortable with,” Mr. Zak said. And in November, the Zaks closed on the house, for $2.735 million.The bedrooms of Mr. Baltimore’s 1970s house are on the lower level. CreditDaniel Gonzalez for The New York Times
“It’s like the dog that chases the car and actually catches it,” Mr. Zak said. “It’s still not cheap, but it was fair and it was in move-in condition.” They have since installed a new kitchen, painted and brought in new rugs.
In the shifting luxury real estate market, the highest priced homes are taking longer to sell, said Laura Brady, the president and founder of Concierge Auctions, in Manhattan. The company’s Luxury Homes Index report, released earlier this month, noted that the 10 most expensive homes sold in the Hamptons last year had an average sale price of $24,079,286, and spent an average of 706.7 days on the market. Luxury homes that lingered on the market tended to go for less, selling at discounts of nearly 40 percent after six months, Ms. Brady said.
In Montauk, the 20-acre oceanfront estate that belongs to Dick Cavett, the former talk show host, has been on the market for two years. The 7,000-square-foot, six-bedroom, four-bathroom house, which was listed for $62 million in June 2017, was designed by McKim, Mead & White in the 1880s and rebuilt in 1997 after a fire, using “forensic architecture techniques” to replicate the original house with a wraparound porch and a bell tower, said Gary DePersia, an associate broker with Corcoran. The price dropped to $48.5 million last August, then Mr. DePersia re-listed it in February, for $33.95 million.
“They are motivated sellers,” Mr. DePersia said. “Where are you going to get 20 acres with 900 feet of oceanfront and utter privacy with a historic house for that kind of money in the Hamptons? You are not.”
According to a first quarter report from Bespoke Real Estate, which deals exclusively with $10 million-plus properties, 122 homes priced over $10 million were on the market at the end of March, with 13 between $30 and $40 million.
Most $10 million-plus buyers already have a home in the Hamptons, said Zachary Vichinsky, a principal at Bespoke Real Estate, and have spent “in some cases the better part of two years exploring the market and defining what works best for them,” whether that means upgrading or building a new home closer to the water.
“There is a lack of urgency on their part, in a lot of cases, but the special inventory continues to move pretty quickly,” Mr. Vichinsky said.
In 2018, a total of 41 homes sold for $10 million or more in areas that brokers refer to as the “alpha market,” which includes East Hampton, Southampton, Water Mill, Bridgehampton, Sagaponack and Wainscott.
But there was one bright spot in the market overall: homes listed for $500,000 to $1 million. That sector of the market accounted for 34 percent of sales in the first quarter, according to a report from Brown Harris Stevens.Mr. Baltimore affectionately refers to his hexagonal house as “the hive.”CreditDaniel Gonzalez for The New York Times
Last November, after renting a “shack on the bay” in Sag Harbor for nine years, Keith Baltimore, an interior designer with offices in Manhattan, Port Washington, N.Y., and Boca Raton, Fla., paid $900,000 for a “quirky and campy” 1970s contemporary house with an upside-down floor plan, a circular great room with a skylight, and a pool, on an acre in Water Mill. The house was originally listed for $1.15 million.
“There were so many houses on the market, it felt like a full-time job looking at what’s out there, doing due diligence,” said Mr. Baltimore, 55, who spent weekends for a year and a half house shopping.
From Westhampton to Montauk, about 1,900 homes are available for $2 million or less, including about 900 under $1 million and 160 for around $500,000, said Mr. O’Connor, the Halstead agent.
California’s progressive approach may be difficult to implement nationwide – here are the hurdles to consider.
According to the Net Zero Energy Coalition, growth of ZE (Zero Energy) home construction was 75% higher in 2017 than in 2016. While California represents approximately half of all net zero energy homes built in the US, growth is occurring across the country, including Massachusetts, which has a similar top-down approach to the construction process, putting this state in second place in the inventory of zero ready (ZR), near zero (NZ), and ZE inventory.
A ZE home (also referred to as a Zero Energy Building, ZEB) is a home that consumes no more energy than it produces in a year. To achieve this, ZE homes are extremely efficient, leveraging cutting-edge building materials and construction methods, smart thermostats, and energy-efficient appliances to keep the home’s energy consumption as low as possible without seriously inconveniencing the homeowner. ZE homes produce on-site energy from renewable sources. In the residential segment, the most common renewable installed is solar photo voltaic (PV) panels. ZR homes have all of the energy-efficient elements with the exception of on-site energy generation.
For many communities, ZE is an important building block for their climate and sustainability action plans, driving several states and cities to introduce ZE legislation:
Oregon has set a 2023 target for all new home construction to meet ZE.
Austin, TX, has required all new homes to be ZE-ready since 2015.
Cambridge, MA, has a multiyear plan to move towards a zero net energy community, requiring all new residential home construction to be ZE by 2022.
Cambridge, MA, has a multiyear plan to move towards a zero net energy community, requiring all new residential home construction to be ZE by 2022.
The city of Fort Collins, CO, created FortZED nearly a decade ago to partner public, private, and academic resources to experiment with new technology that saves money and energy and helps create jobs locally.
The drive to implement ZE policies on a citywide or statewide level could help make these benefits a standard amenity, but these efforts require buy-in among builders. Most builders are now aware of ZE and have a basic understanding of the various elements. The National Association of Home Builders (NAHB) surveys its members regularly, and its 2017 Green Practices Study and Green Multifamily and Single Family Homes Report confirms that the housing industry is gradually changing. NAHB reports that three out of ten builders have constructed at least one near zero, zero energy ready, or ZE home.
However, the decision to construct a ZE home often relies with the consumer/home buyer, and many barriers can inhibit that decision. California is unique in that it has goals and codes driving changes, higher energy costs, favorable solar energy policies, and engaged utility providers. In other parts of the country, low energy costs are a barrier. Getting consumers excited about spending more upfront to see lower energy bills is a difficult proposition. Parks Associates survey data reveals that one-third of home owners in U.S. broadband households have a monthly electricity bill of less than $100.
As a result, ZE builders focus on the attributes of a higher quality home, which provides the homeowner with a healthier, quieter, more comfortable, and more energy-efficient home. A key message is the ZE home provides peace of mind, as well as a hedge against future utility bills, as the home is built with better components and with higher construction quality. Overall, customers indicate a willingness to pay more for high-performing homes. A Parks Associates survey of US broadband households in 4Q 2017 found 80% of homeowners believe that having an energy-efficient home is important or very important, and at the end of 2018, 89% reported energy-saving actions. Parks Associates interviews with builders confirm that most customers will pay approximately 5% more for higher quality, high-efficiency ZE homes.
However, a home is an infrequent purchase, and once it comes down to spending actual dollars, consumer actions often diverge from original intentions. Budget drives the decisions regarding efficiency upgrades or adding renewables, which can often push home buyers to decide between ZE options and other amenities. In interviews with Parks Associates, entry to mid-level builders report about one-third of buyers respond positively to energy-efficiency attributes and the associated benefits, while the remaining two-thirds are either more interested in other aesthetic enhancements or skeptic of the benefits overall.
Loss of incentives can drive decisions away from high-efficiency equipment. For example, the current residential federal tax credits for solar, wind, fuel cells, and geothermal heat pumps are 30% of the total installed costs. The amount is being stepped down yearly and will be phased out after 2021. As federal incentives go away, local municipalities and utilities will need to step up to replace them, or installation of these systems may decline.
Scarcity of resources can also be a barrier, and in general, local policies, codes, and incentives drive where support resources are located. Simply put, it can be difficult to find the materials and trained subcontractors necessary for a ZE project in an area that does not promote or incentivize this type of construction.
Policies can attract resources and also drive greater consumer awareness for ZE solutions. Just take a look at California, with the highest number of residential solar PV installations, to confirm that policies, codes, and coordinated efforts across players can drive adoption. In other areas, the federal tax credit has helped grow consumer awareness and adoption of solar. Today, most consumers also have a basic awareness of renewables and higher efficiency products, so market opportunities exist for high-efficiency appliances, equipment, and smart home energy products and service providers as part of the ZE equation. Smart-home products, renewable generation, battery storage, and electric vehicles are all transformative technologies individually, but all are currently in the early stages of adoption in US households.
Near zero and zero ready homes create more choice for consumers and are becoming affordable as ZE homes become cost competitive to standard dwellings. Rocky Mountain Institute’s recent 2018 study on construction costs of ZE and ZR single-family homes report that on average, a ZE home now costs 6.7%-8.1% more than a standard home and a ZR home is only 0.9%-2.5% higher. Prices are continuing to decline for renewables and battery storage, making these energy efficient homes truly affordable.
Production builders can see a clear competitive advantage as they reduce their construction costs and expand their ZE and ZR home offerings across the US. As more builders embrace this trend, expect to see more creative offers such as Lennar’s SunStreet program that offers solar PV at no upfront costs to the home buyer.
Historically, the push for ZE home requires alignment, awareness, and education across all parties in the housing industry. Stakeholders include architects, construction trades, local code compliance organizations, utility partners, real estate professionals, and the financial industry, in addition to the product manufacturers, trade associations, and local suppliers who work with builders to implement these solutions.
It is a complex undertaking, but as more communities look for ways to preserve resources, and promote energy independence, ZE solutions will continue to emerge as viable options in US households. The single-family home building industry at a point where declining costs, competitive solutions, and consumer awareness of benefits could potentially drive adoption of ZE and ZR homes without incentives and policies.
Median asking rent has reached an all-time high, rising to a record $1,006 in the first quarter of 2019, according to recent data from the U.S. Census Bureau.
Rental properties that were lying vacant remained low at 7% in Q1, a factor that is driving up rental prices.
Meanwhile, homeownership levels across the country were relatively flatfrom last year, the data revealed, reversing a trend of eight consecutive quarters of growth.
Rents rise as increased demand takes a bite out of homeownership
It appears a surge in renters is the cause. The number of renters has changed course, rising in Q1 after falling in six out of seven previous quarters.
Skylar Olsen, Zillow’s director of Economic Research, said the data suggests the younger generation is having trouble overcoming the hurdles they face in the path toward homeownership, including securing a down payment, finding an affordable home and qualifying for a loan.
“These hurdles – combined with potential shifts in preferences and/or a simple delay in the many ‘adulting’ events like marriage and children that precipitate buying a home – can have the effect of keeping younger, would-be buyers in rental housing for a longer time,” Olsen said.
He added that the sheer size of the 20-and-30-something population is exacerbating the situation by creating competition that drives up rental prices.
Total payroll employment increased by 196,000 in March, while the unemployment rate was unchanged at 3.8%. Residential construction employment increased by 12,200 in March, after the decline of 8,100 jobs in February. The total construction industry (both residential and nonresidential) gained 16,000 jobs in March.
According to the Employment Situation Summary for March, released by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 196,000. It was a big jump from the gain of 33,000 jobs in February, which was revised up from its original estimate of a 20,000 increase. Monthly employment growth has averaged 180,000 per month for the first three months of 2019, compared with the average monthly growth of 223,000 over all of 2018. Over the past twelve months, total nonfarm payroll employment rose by 2.5 million, with the average monthly growth of 211,000.
The unemployment rate was unchanged at 3.8% in March. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, declined by 0.2 percentage point in March, to 63.0%. The decrease in the number of total labor force reflected both a 201,000 decrease in the number of persons employed and a 24,000 decline in the number of persons unemployed over the month.
Additionally, monthly employment data released by the BLS Establishment Survey indicates that employment in the overall construction sector increased by 16,000 in March. The number of residential construction jobs rose by 12,200 in March, following an 8,100 decline in February.
Residential construction employment now stands at 2.9 million in March, broken down as 838,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction is 8,000 a month. Over the last 12 months, home builders and remodelers added 103,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 918,000 positions.
In March, the unemployment rate for construction workers decreased to 3.9% on a seasonally adjusted basis, from the 4.5% in February. The unemployment rate for construction workers dropped to the lowest rate since 2001, as shown in the figure above.
Despite already being one of the more heavily taxed counties in the country, Westchester homeowners and shoppers may soon see a hike in sales tax.
Westchester officials are reportedly hopeful that the state will approve an increase in local sales tax which could help steady the county’s finances. However, according to a lohud report , no formal request has been made, and it is unclear how much taxes may be increased.
The report states that Westchester County Executive George Latimer plans to first reach out to area business owners before he makes his formal cause to New York State officials.
The average Westchester homeowner paid nearly $20,000 in property taxes last year, with a sales tax rate of 3.375 percent, which is a lower rate than surrounding counties and lower than the county’s four largest cities.
In recent years, Westchester has found itself facing millions of dollars in deficits and the county has seen its reserves dwindle, leading to a downgrade of their credit rating. Westchester’s financial report card saw its credit rating cut one level by two prominent agencies.
Westchester County was notified by S&P Global Ratings and Fitch Ratings that the county’s financial outlook has been downgraded to AA+. Moody’s also assigned Aa1 to Westchester. The county has lost its AAA rating – the highest ranking available – in each of the Big 3 rating agencies.
Late last year, lawmakers approved the $1.9 billion budget, with the measure quickly signed off by Latimer. The budget was approved by a 13-4 vote, with the support of county Democrats. The budget contains a 2 percent property tax hike.
Officials said that the tax rate increase is to help offset tens of millions of dollars in deficits that the county is currently operating against. There are no planned cuts to staff or service in the approved budget, which is contingent on the county selling several parking lots that surround the County Center in White Plains. The sale of the lots is expected to net more than $20 million.
The tax levy increase is the first since Latimer took over as county exec last year. The county could have raised taxes by as much as 4.5 percent, but was able to curtail that number with certain allowances. The county was operating at a $32 million deficit to end 2017 year, which only ballooned in 2018.
As the year is coming to an end, homeowners are more optimistic than ever that their home is worth more than they owe on it, and they expect that value to keep rising through 2019.
A new Rasmussen Reports national telephone and online survey finds that 69% of American Homeowners now say the value of their home is worth more than the amount they owe on their mortgage, up from May’s previous nine-year high of 66%. Just 21% now say their home’s value is not worth more than what they owe on it, but 10% are not sure. (To see survey question wording, click here.)
The survey of 720 American Homeowners was conducted on November 20, 2018 by Rasmussen Reports. The margin of sampling error is +/- 3.5 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.
U.S. homebuilding rose in October amid a rebound in multi-family housing projects, but construction of single-family homes fell for a second straight month, suggesting the housing market remained mired in weakness as mortgage rates march higher.
Data for September was revised to show starts dropping to a rate of 1.210 million units instead of the previously reported pace of 1.201 million units.
Building permits slipped 0.6 percent to a rate of 1.263 million units in October. Economists polled by Reuters had forecast housing starts rising to a pace of 1.225 million units last month.
The housing market is being hobbled by rising borrowing costs as well as land and labor shortages, which have led to tight inventories and higher house prices. This is making home buying unaffordable for many workers as wage growth has lagged.
The 30-year fixed mortgage rate is hovering at a seven-year high of 4.94 percent, according to data from mortgage finance agency Freddie Mac. Wages rose 3.1 percent in October from a year ago, trailing house price inflation of about 5.5 percent.
Residential investment contracted in the first nine months of the year and housing is likely to remain a drag on economic growth in the fourth quarter. Economists expect housing activity to remain weak through the first half of 2019.
U.S. financial markets were little moved by Tuesday’s housing starts data.
SINGLE-FAMILY HOME BUILDING FALLS
Single-family homebuilding, which accounts for the largest share of the housing market, dropped 1.8 percent to a rate of 865,000 units in October after declining in September.
Single-family homebuilding has lost momentum since hitting a pace of 948,000 units last November, which was the strongest in more than 10 years.
A survey on Monday showed confidence among single-family homebuilders dropped to a more than two-year low in November, with builders reporting that “customers are taking a pause due to concerns over rising interest rates and home prices.”
Single-family starts in the South, which accounts for the bulk of homebuilding, fell 4.0 percent last month. Single-family homebuilding jumped 14.8 percent in the Northeast and fell 2.0 percent in the West. Groundbreaking activity on single-family homes dropped 1.6 percent in the Midwest.
Permits to build single-family homes fell 0.6 percent in October to a pace of 849,000 units. These permits remain below the level of single-family starts, suggesting limited scope for a strong pickup in homebuilding.
Starts for the volatile multi-family housing segment surged 10.3 percent to a rate of 363,000 units in October. Permits for the construction of multi-family homes fell 0.5 percent to a pace of 414,000 units.
Tuesday’s data also suggested that housing supply is likely to remain tight in the near term. Homebuilding completions in October fell 3.3 percent to a rate of 1.111 million units, the lowest level since September 2017.
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Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to plug the inventory gap.