Builder Confidence Is Building
Home builder confidence in the housing market rose in September for the third month in a row from 18 to 19, which is the highest level since May 2008, according to the monthly index calculated by the National Association of Home Builders and Wells Fargo.
The index hit a low of 8 in January. Any number below 50 is considered negative.
The NAHB credits the first-time home buyer tax credit for this summer’s market improvement, as well as low interest rates and home prices, says Joe Robson, NAHB’s chair.
The index also projects the strength of the market going forward. That measure fell one point in September to 29 because of the expiring tax credit. In a statement, Robson says, “Builders are concerned about what will keep the market moving once the credit is gone.”
Source: Bloomberg, Bob Willis
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
Faulty Appraisals Harming Housing and the Economy
Twenty-six percent of builders are seeing signed sales contracts fall through the cracks because appraisals on their homes are coming in below the contract sales price, according to a nationwide survey conducted by NAHB.
“Home builders are increasingly concerned that inappropriate appraisal practices are needlessly driving down home values. This, in turn, is slowing new home sales, causing more workers to lose their jobs and putting a drag on the economic recovery,” said NAHB Chairman Joe Robson.
The survey showed that nearly 60% of the builders are reporting that inadequate appraisals are causing serious problems in the market, with the biggest problem being comparables of new single-family homes that are too often based on foreclosures and distressed sales.
“Lost home sales are killing jobs, deepening the housing slump and hurting local economic activity,” said Robson, who noted that construction of 100 single-family homes generates 324 local jobs, $21.1 million in local income and $2.2 million in taxes and other revenue for local governments in the first year.
Of those who are reporting appraisal problems, 54% said that the appraisal amount was actually less than the cost of building the home. Full Story.
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
NAHB Applauds GSE Adjustments of Appraisal Guidelines
The National Association of Home Builders (NAHB) is pleased with one underwriting guideline adjustment made last week by government sponsored enterprise, Freddie Mac.
Freddie Mac’s Bulletin 2009-18 announced several changes to the GSE’s underwriting guidelines. The changes deal mainly with the documentation required for income and asset verification, make “condominium hotel” loans ineligible for purchase, and eliminated Form 70A, Energy Addendum as a required attachment to appraisals.
More notably, Freddie Mac made several “Best Practices” recommendations for selecting appraisers and reviewing their products. One of these contained the statement that Freddie does not require appraisers to use Real Estate Owned, foreclosures or short sales in selecting comparable sales but rather that appraisers must “certify that comparable sales chosen are those most similar to the subject property.” These should include distressed sales if they are representative, something many industry professionals have been requesting since the Home Valuation Code of Conduct was enacted on May 1, 2009.
In a press release on Monday, NAHB Chairman Joe Robson said that this was “a step in the right direction,” but that this modification needed to go further. He called for additional changes that would allow appraisers the option of expanding both the geographic area and the time frame for comps in cases where local and recent contracts are heavily skewed toward distressed sales. Full story...
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
Faulty Appraisals Harming Housing and the Economy
Twenty-six percent of builders are seeing signed sales contracts fall through the cracks because appraisals on their homes are coming in below the contract sales price, according to a nationwide survey conducted by NAHB. “Home builders are increasingly concerned that inappropriate appraisal practices are needlessly driving down home values. This, in turn, is slowing new [...]
