… and Here’s Your Housing News for June 29, 2015
Several big Supreme Court decisions and a bushel of upbeat economic data had a lot of Americans partying over the weekend. While you nurse the hangover, here’s a rundown of what it all means. This week, economists expect more good news on home prices and job creation. On July 4th, my old neighbor Dave Grohl will come out of convalescence for an epic event in D.C. His boyhood home? A suburban, three-bedroom split level built in 1955. Read on.
The Wedding-Industrial Complex
Speaking of partying, we all love a good wedding, right? Especially state tourism officials and tax collectors. Now the 14 states that had shunned same-sex marriage can share the economic wealth, thanks to last week’s Supreme Court decision.
Take Ohio, home to nearly 19,700 gay couples including James Obergefell and his sadly belated partner, John Arthur, who filed the original lawsuit that ended up at the high court. According to the Williams Institute, a research group at UCLA School of Law, same sex-weddings could boost the Buckeye state’s economy by $ 70.8 million over the next three years and generate $ 5 million in tax revenue.
In Michigan, gay weddings will bring in an estimated $ 53.2 million. Also getting a lift: Georgia ($ 78.8 million), Tennessee ($ 36.7 million), Missouri ($ 36.3 million), Louisiana ($ 28.3 million), Kentucky ($ 23.4 million), Texas ($ 15 million), Arkansas ($ 13.6 million), Mississippi ($ 10.8 million), Nebraska ($ 8 million), South Dakota ($ 2.4 million) and North Dakota ($ 1.9 million).
Good for the economy, good for jobs, good for the housing market. Why housing? For starters, married same-sex couples will be able to deduct mortgage interest from their taxes, just like everybody else. Maybe more will become homeowners.
The Housing-Industrial Complex
Speaking of the housing market, more good news. The first part of the year wasn’t nearly as bad as we thought, people are making and spending more money and home sales are doing pretty well.
In May, new homes sold at their highest pace in seven years. Sales of existing homes (houses that have been lived in) were up 5.1 percent from a year ago. (Redfin readers had a good preview of this a couple weeks ago.) More properties went under contract, too, hitting a nine-year high.
Best of all, first-time buyers are back. They accounted for 32 percent of buyers in May, the highest share since September 2012, the National Association of Realtors reported. That’s good, but we’d like to see the number closer to 40 percent.
So what? We detect some urgency from buyers eager to beat an increase in interest rates. The 30-year, fixed-rate mortgage, at 4.02 percent, has risen gradually since April. But there aren’t enough houses for sale and prices are going up faster than incomes. For now, it’s still a seller’s market.
Wait, what’s this?
Greece? What does that have to do with my house? Plenty. Our friends across the pond are consumed with the Grexit crisis. While Europe and Greece stare each other down, overseas stock markets are tanking and the world is scrambling for a place to stash its cash (Miami condos, anyone?). The drama has Janet Yellen’s rapt attention. It’s bad, people. The U.S. economy could encounter some turbulence and a rate hike might come later or more slowly than we thought. Nobody knows for sure.
The Supreme Court Opinion Everyone Missed
Where should low-income people live? The Supreme Court had something big to say about that last week, too. The court found Texas had discriminated, even if it didn’t mean to, when it built a lot of subsidized housing in black neighborhoods and too little in white neighborhoods. It’s called “disparate impact” and it could affect where affordable housing is built.
A million people joined the ranks of the world’s uber-rich last year, and 18 percent of their money is invested in real estate.
Bad-guy roundup, yee-hah! The CFPB added nearly 8,000 complaints to its database. A good place to check out your mortgage lender or servicer.
Another new normal? Americans say they’re just fine with a mediocre economy, Bloomberg reports.
The value of U.S. housing stock has jumped to $ 11.7 trillion, closing in on the record $ 13.3 trillion we hit at the peak of the housing bubble in 2006, Freddie Mac reports.