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Illegal immigration could drop home prices

President Donald Trump signed an executive order Tuesday that directs his administration to enforce immigration laws more aggressively.

This new order could lead to a much higher rate of deportations in the coming months. One article by Prashant Gopal for Bloomberg points out this could lead to a cool-down in home prices.

“If Trump gets the immigration plan he wants, the housing market will get hit harder than any other,” said Alex Nowrasteh, a policy analyst for the libertarian Cato Institute. If “millions of people get deported and more people don’t come in to take their place, then you’ll have downward pressure on home prices, especially in urban areas.”

The immigrant housing market is often underappreciated, in part, because undocumented workers and the companies that cater to them sometimes like to fly below the radar.

Trump’s order announced it would not target immigrants under the Deferred Action for Childhood Arrivals, however even DACA immigrants are now struggling with the idea of homeownership.

From the article:

Even immigrants who marry U.S. citizens are losing faith. The 36-year-old Brazilian nonprofit executive, whose husband is an American, is six months away from a permanent green card, one step behind citizenship. After the travel ban and the ensuing chaos, she abandoned plans to bid on a Maryland home only a 15-minute drive from her office.

“I just don’t want to take my life savings and commit to a house because even if things go my way with the green card, what if the climate here continues to get more and more aggressive toward immigrants?” said the executive, who is working with real estate brokerage Redfin.

Public letter to Berkshire Hathaway shareholders

Every year billionaire investor Warren Buffett releases an annual letter to Berkshire Hathaway shareholders, unraveling the inner workings of his conglomerate’s performance, including its stake in the housing affordability crisis.

The public letter gives insight into a company that’s far from easy to become a shareholder in. At time of publication, Yahoo! Finance valued a share of Berkshire Hathaway at $255,980.

Aside from his acclaimed investment advice highlighted here in an article in Quartz by Ashley Rodriguez, the 29-page document also details the status of Clayton Homes.

Clayton Homes specializes and receives most of its revenue from the sale of manufactured homes. However, Buffett noted that it derives the bulk of its earnings from its large mortgage portfolio.

According to the letter, last year, Clayton became America’s largest homebuilder, delivering 42,075 units that accounted for 5% of all new American homes.

While the company did branch out in 2015 and purchase its first site-builder, Clayton’s focus will always be manufactured homes.

For added context, a lot of other large builders produce more dollar volume than Clayton since site-built homes command much higher prices.

However, it’s manufactured homes that are significantly helping America’s affordability crisis.

An article in Bloomberg by Patrick Clark stated last year that despite the negative stigma that surrounds mobile homes, it doesn’t mean the manufactured houses don’t have a role to play in the housing process, especially when it comes to affordability.

The article stated, “While mobile homes often make the most sense in sparsely populated areas, there’s no reason they can’t be used to increase the stock of affordable housing in U.S. cities.”

According to Buffett, manufactured homes account for about 70% of new American homes that cost less than $150,000, and Clayton manufactures close to one-half of the total.

The focus on the low-cost homes does come with side effects though.

The letter stated that last year Clayton had to foreclose on 8,304 manufactured-housing mortgages, about 2.5% of its total portfolio, attributing the data to customer demographics.

To help put this in perspective, according to the December 2016 National Foreclosure Report released by CoreLogic, foreclosure inventory sat at 0.8% of all homes with a mortgage in December 2016.

“Clayton’s customers are usually lower-income families with mediocre credit scores; many are supported by jobs that will be at risk in any recession; many, similarly, have financial profiles that will be damaged by divorce or death to an extent that would not be typical for a high-income family,” the letter stated.

“Those risks that our customers face are partly mitigated because almost all have a strong desire to own a home and because they enjoy reasonable monthly payments that average only $587, including the cost of insurance and property taxes. Clayton also has long had programs that help borrowers through difficulties,” it continued.

Last year about 11,000 borrowers received extensions, and 3,800 had $3.4 million of scheduled payments permanently canceled by Clayton.

Home Loans expands into Texas

Recent reports from the Texas Association of Realtors and Fitch Ratings call out how hot Texas real estate right now, as more homes were sold last year than ever before in Texas.

Fitch’s report notes that Dallas housing is so hot right now that it’s bordering on overheating.

Seeking to strike while the iron is hot, Embrace Home Loans announced this week that it is expanding into Texas and opening its first office in the state.

Embrace Home Loans, a mortgage lender that currently has more than 80 offices and is licensed in 46 states plus Washington, D.C., said that its first Texas office will be located in Frisco, a northern suburb of Dallas.

The office will serve Dallas, Ft. Worth, and all the surrounding suburbs, the company said.

“For more than 30 years, Embrace Home Loans has been a trusted mortgage provider throughout the east coast. Because of their solid reputation, they are ideal for the Texas market,” said Billy Holloway, branch manager for Embrace Home Loans’ Frisco office.

“As the demand for home financing strengthens, we’re ready to support the lending needs of individuals and families in Frisco as well as the surrounding communities,” Holloway continued. “We look forward to not only offering a best-in-class mortgage experience for our clients, but we’re also thrilled to be a part of the Embrace team.”

Jeff McGuiness, chief sales officer at Embrace Home Loans, said that as Texas housing continues to strengthen, borrowers will need a “trusted” option for their mortgage loan.

“Adding the right talent to support those markets is essential, and we’re confident Billy and his team will be an outstanding addition to our organization,” McGuiness said. “His customer-centric approach aligns with Embrace’s commitment to provide superior service to our clients, and we believe he will not only greatly support the needs of those in Texas, but also exceed our goals for years to come.”

Surpasses expert expectations yet again

Existing home sales started out fast in 2017, reaching a recent cyclical high and increasing to the fastest pace in nearly a decade, according to the new report from the National Association of Realtors.

Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.3% in January to a seasonally-adjusted rate of 5.69 million. This is up from 5.51 million sales in December, and up 3.8% from last year’s 5.48 million, marking the highest rate since February 2007’s 5.79 million.

“With the exception of an unusually harsh and wintry December, existing home sales have now strongly beat expectations in four out of the past five months, as buyers took advantage of slightly better weather and slightly lower mortgage interest rates in January,” Zillow Chief Economist Svenja Gudell said.

These sales gain signals resilience among consumers even in a rising interest rate environment, according to NAR Chief Economist Lawrence Yun.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” Yun said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”

Home prices continue to rise for all housing types, hitting $228,900 in January. This is up 7.1% from last year and the fastest price increase since last January. It also marks the 59th consecutive month of year-over-year gains.

“While strong price gains are positive for owners of homes, and help to reduce the number of homeowners who owe more on their mortgage than the market value of their home, it is a negative for affordability.” Nationwide Chief Economist David Berson said. “We have concerns that continued supply constraints in the housing market will allow outsized house price gains again in 2017, especially hurting potential first-time homebuyers.”

But as home prices increase, housing inventory remains down 7.1% from last year’s 1.82 million, marking the 20th consecutive month of annual declines. However, inventory increased 2.4% from December to 1.69 million in January. Inventory remains at a 3.6-month supply at the current sales pace, unchanged from December.

Record sales and home prices

It was another record-setting year for Texas real estate, as home sale and home prices both hit all-time highs – for the second year in a row.

According to a new report from the Texas Association of Realtors, there were more homes sold in the Lone Star State in 2016 than in any other year, eclipsing the previous high, which stood for all of one year.

And one might think that a decrease in home prices drove the increase in home sales volume, but it was just the opposite.

The Texas Association of Realtors report also shows that home prices in Texas also reached a new all-time high in 2016, also surpassing 2015’s previous record total.

According to the report, home prices in Texas increased at a steady pace throughout 2016, with the median price rising 7.7% from the previous year, to $210,000.

At the same time, Texas also saw continued growth in home sales volume during the year, which climbed 4.6% to 324,924 homes sold in 2016.

“Strong gains in end-of-year home sales activity were a key factor in making 2016 another record year for Texas real estate,” said Vicki Fullerton, chairman of the Texas Association of Realtors. “Last year’s record home sales activity was fueled by the momentum of multiple years’ strong job and population growth across the state, despite the fact that Texas job and economic growth began to slow in 2016.”

But as the report notes, the forecast for Texas housing in 2017 is not quite as rosy as the previous years, thanks to decreasing inventory, as well as those rising prices, and the state’s rapidly rising property taxes, which are significantly impacting affordability in the state.

“Rising home prices and skyrocketing property taxes are driving up the cost of homeownership at an alarming rate,” Fullerton added.

“Growth in property values makes homeownership a strong investment, but must be balanced by lower tax rates so that Texans are not being forced out of their homes,” Fullerton continued. “The Texas Association of Realtors urges state legislators to pass legislation that ensures an honest and transparent conversation occurs at the local level if more tax revenue is needed and gives property owners the right to decide when their tax rates should be raised.”

As the report also notes, there is not a significant amount of available inventory on the market, which also impacts affordability.

According to the report, Texas’ low housing inventory level remained consistent with the prior year, ending at 3.3 months of inventory in December 2016.

Selects six programs for grants

JPMorgan Chase announced it is committing $1.2 million to the ongoing revitalization of Detroit’s neighborhoods, giving grants to six different community development programs.

The once booming city still struggles to recover from the financial crisis, even though it posted huge leaps in economic growth. Since it fell so low, there remains a long way to go in order to be healthy again.

As part of JPMorgan Chase’s $100 million commitment to the city, the six programs support recovery in housing development, blight removal, new business creation, parent education, and neighborhood beautification projects.

More specifically, the new grants will support Southwest Housing, Vanguard Community Development Corp., Grandmont Rosedale Community Stabilization Program, Eastside Community Network, Michigan Community Resources, and Community Development Advocates of Detroit.

“These targeted efforts provide Detroiters with the local resources they need to invest in the future of their own neighborhoods and create more widely shared prosperity,” said Janis Bowdler, head of community development initiatives, JPMorgan Chase.

“By investing in these programs, the quality of entire neighborhoods can improve as housing prices stabilize, blighted homes are removed or renovated, and education programs offer residents the support they need to own a home,” continued Bowdler.

The city is steadily improving though, continuously ranking in the top 20 for hottest housing markets. According to the latest ranking list from realtor.com, Detroit is the 15th hottest housing market in the nation.

And JPMorgan isn’t the only banking helping fuel the Motor City’s recovery.

Quicken Loans has become an integral part of the city’s recovery since moving its headquarters there in 2010. The company’s revitalization efforts include investing more than $2.2 billion to purchase and renovate more than 95 commercial properties, accounting for more than 15 million square feet in the city’s urban core.

“There is a lot of work yet to do, but Detroit is on the road to recovery.  By investing in programs like this that make a real difference to our neighborhoods, we are seeing progress accelerate,” said Detroit Mayor Mike Duggan on the JPMorgan news. “Neighborhoods like the North End and Michigan-Livernois are getting better because of the programs JPMorgan Chase is supporting and the great work of our community partners.”

Deadlines spur action

A favorite saying of mine is “deadlines spur action,” and in the case of our Rising Stars awards program, it’s proving true.

Quite a few of you are waiting until the last minute to get your nominations in.

And hey, we get it.

There’s a lot going on around in the world and in the office these days.

So you might be a little crunched for time when it comes to submitting your entry for Rising Stars, hich honors the next generation of leaders in lending, servicing, investments, and real estate.

And maybe that’s stressing you out, especially considering the deadline to enter is TODAY.

Or is it?

We’ve heard from quite a few folks that are feeling the pressure of that impending deadline, and we feel you. We get it.

And we’re not monsters around here. We’re here for you.

We’re here to help.

So, in that spirit, HousingWire is extending the deadline for entering our Rising Stars award program until Sunday night at midnight.

Yep, you now have all weekend to get your entry in.

But that’s it.

If you don’t make it in by Sunday night, then you’re not in.

Afraid of missing out? Well, you now have two more full days (plus the rest of Friday) to get your entry in.

For more information on the program, click here.

And get to work on those entries. That new (and final) deadline is just two days away.

So get to it!

Texas is hotter than ever

Housing in the state of Texas was hotter in 2016 that it’s ever been before, but is real estate in the Lone Star state getting too hot?

According to a recent report from the Texas Association of Realtors, there were more homes sold in 2016 than in any other year in history, and those homes sold for record prices as well.

Real estate technology makes its way to Dallas

Just weeks after bringing their technology to Realtors in Michigan, Remine announced its partnership with the North Texas Real Estate Information Systems to bring the game-changing technology to Dallas.

Remine will now be available to more than 30,000 Multiple-Listing Service subscribers in the Dallas area.

“Remine complements our existing MLS systems by adding a beautiful visualization of all our data,” NTREIS CEO John Holley said. “An incredible feature is their ability to reconnect with past clients, and see their propensity to sell. And then even if you’ve lost their contact info, Remine can update it.”

Realtors can search a property and see the location on a map, instead of in a list format. Remine also allows for other functions such as seeing the previous sales price, if the owner lives in the property and how long the homeowner owned a home, and therefore how much equity they could have built up.

Realtors can also see the RPI score, or the score that rates how likely the homeowner is to sell their home, Remine explained to HousingWire. The homes are given a score from one to 100, with higher scores indicating higher likelihood of the homeowner wanting to sell their home.

“Remine will be deeply integrated with the existing front end system to create a seamless experience,” Remine CEO Leo Pareja said. “We’ve designed Remine to meet the unique needs of real estate professionals; we look forward to delivering our core functionality to the community in North Texas.”

Remine also recently announced its expansion into Alaska MLS and Greater El Paso Association of Realtors.

This expansion into the Dallas and El Paso markets comes at a time when the real estate market in Texas is hotter than ever. A new report from the Texas Association of Realtors showed it was another record-setting year for Texas real estate, as home sale and home prices both hit all-time highs – for the second year in a row.