Summary of Recent REALTOR® University Presentation
In a Brown-Bag presentation to REALTOR® University, Lisa Sturtevant, Director of the Center for Housing Policy, discussed that the vitality of America’s communities depends on whether the people filling key roles can afford housing. She indicated that renting or buying a typical home in many U.S. metro areas may be a challenge for the police offices, nurses, teachers, janitors and others who provide much of the urban backbone.
Dr. Sturtevant discussed the “Paycheck to Paycheck” program, which analyses housing costs and affordability in terms for over 200 metro areas and 76 occupations. “Paycheck to Paycheck” is comprised of an online, interactive database and accompanying report prepared by the Center for Housing Policy – the nonprofit research affiliate of the National Housing Conference (NHC) – comparing wages for selected occupations with the income needed to buy or rent a home.
An accompanying report, Paycheck to Paycheck: Is Housing Affordable for Americans Getting Back to Work?, explores trends in housing affordability for workers in the five most common jobs in the industry sector doing the most hiring: accountants, groundskeepers, janitors, office clerks and security guards: See the data for 209 U.S. metro areas.
The report notes that over the past year, the income needed to buy a median-priced home dropped by at least three percent in more than half of the metro areas studied, due to a combination of low home prices and falling mortgage interest rates. Credit constraints, difficulty amassing down payments, market uncertainty and other concerns may keep low- and moderate-income workers from buying homes in otherwise affordable housing markets.
The REALTOR® University presentation is available at http://www.realtor.org/videos/realtor-university-speaker-series-paycheck-to-paycheck-tool-highlights-video
REALTOR® University Brown-Bag presentations are open to the public. A schedule is available from Stephanie Davis (firstname.lastname@example.org), (202) 383-1033.
Twenty-nine percent of respondents to the October 2013 REALTOR® Confidence Index Survey reported that the government shutdown had a temporary effect on ongoing transactions. Other data indicated that the shutdown also apparently impacted buyer confidence to some degree for future transactions. Overall the impact was noticeable but somewhat lower than feared.
The REALTOR® Confidence Index (RCI) for current market conditions continued to drop in October across all property types. An index of 50 marks “moderate” conditions . About 3,500 REALTORS® responded to the October survey: October REALTORS® Confidence Index Survey
A variety of factors were reported as negatively affecting confidence: impacts of the government shutdown, increases in mortgage rates, tight housing inventories, and the impending increase in home flood insurance rates.
 To assess their confidence about current conditions, REALTORS® were asked: “How would you describe the market where you make most of your sales? Concerning their expectations for the next six months, they were asked “What are your expectations for the housing market over the next 6 months where you make most of your sales?”An index of 50 delineates “moderate” conditions and indicates a balance of respondents having “weak”(index=0) and “strong” (index=100) expectations. The index is not adjusted for seasonality effects.
The foreign-born population accounts for approximately 13 percent of the total U.S. population, up from about 5 percent in 1960. California, New York, New Jersey, Florida, and Nevada are the top states in which the foreign born comprise approximately 20 percent of the population.
What this means for REALTORS®: U.S. foreign born residents tend to place a high value on homeownership, frequently purchasing homes significantly above the median price. This is a growing and potentially profitable market, generally with sound prospects for home ownership. Information on the characteristics of the foreign-born is available at http://www.realtor.org/reports/state-by-state-international-business-reports
With potential home owners finding it tough to buy their first home, there is still strong demand for rental units, judging by rental price trends. REALTORS® reported rents that are higher compared to a year ago.
Rising rents add an additional incentive for homeownership. Homeownership provides families with enhanced lifestyles—and a chance to cap major parts of their living costs.
What does this mean for REALTORS®? Homeownership advantages for discussion with clients include housing costs (generally less owning a home), quality of life for the family, continued relatively low mortgage rates, and home affordability. Rents continue to go up, and at the end of the lease the renter has a stack of rent receipts as the final product.