New rules go into effect for visa waiver visitors

WASHINGTON – Jan. 22, 2016 – Tighter U.S. travel rules went into effect on Thursday in a bid to keep out potential terrorists, requiring some travellers who normally do not require a visa to obtain the document.

The changes to the U.S. visa waiver program will require nationals of the 38 visa waiver countries to get a visa to travel to the U.S. if they have been to Iran, Iraq, Sudan or Syria in the last five years, or if they are dual-citizens of those countries and a visa waiver country.

An estimated 20 million people, or about 40 percent of all overseas visitors, use the program annually to enter the U.S. without a visa for business or pleasure for up to 90 days.

Concerns had risen that terrorists could take advantage of the program to travel to the U.S. without additional scrutiny.

The U.S. Congress had included the new measures in a spending bill passed last month, and the White House had also tightened the program’s security checks.

The new rules do not apply to diplomats or members of the military, and U.S. officials can offer waivers to some travellers who visited Iraq, Iran, Syria or Sudan because they work for aid groups, as journalists or have other legitimate business travel.

The State Department stressed that most travellers will be able to easily obtain a visa, and that the new rules are not a travel ban.

The 38 countries in the visa waiver program are Andorra, Australia, Austria, Belgium, Britain, Brunei, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Malta, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland and Taiwan.

Copyright © dpa Alliance News

Source: New rules go into effect for visa waiver visitors

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Is rent-to-own a solution to the rental crisis?

NEW YORK – Jan. 17, 2016 – Rents are skyrocketing across the U.S., and an increasing number of renters devote more than half their paychecks to covering rental costs. It’s not just a family burden: Those escalating rent costs have been cited as a major hindrance preventing renters from saving enough for a home purchase downpayment.

But some housing analysts are pointing to rent-to-own agreements as a solution for families who are stuck paying rent but longing for homeownership.

A report from Moody’s Investors Service singles out a program called Home Partners of America that helps potential buyers with credit problems or not enough money for a downpayment. One of the unique aspects of the program – compared to other single-family rent-to-own programs – is that the buyers select a property they would like to purchase, and then Home Partners of America buys it, providing it meets the program’s qualifications. It then sets up an agreement to rent the property to the would-be buyer. The end goal, however, is that Home Partners of America will eventually sell the property to the renter later on.

The buyer-chosen properties are likely to be “higher quality and in more desirable locations [such as those with better school districts]” than properties that are purchased through foreclosure sales, according to Moody’s.

Under the rent-to-own agreement and during the lease term, the tenant would be able to purchase the home at a pre-set price. The lease term generally runs between three to five years. The longer they wait to buy, the higher the purchase price will rise – usually 3.5 percent to 5 percent per year during the term of the lease.

“Furthermore, the strategy could benefit property recovery values because renters with purchase options are incentivized to maintain their properties well,” Moody’s report notes.

Moody’s report shows that the average value of properties under the program is $247,483 in comparison to rental homes offered by Invitation Home sand American Homes 4 Rent that average $167,631 and $143,066.

Source: “Is Rent-to-Own the Future of Housing?” HousingWire (Jan. 14, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Florida tops list of most-desirable states

NEW YORK – Dec. 18, 2015 – For the first time since 2001, Florida – the nation’s 27th state – is back on top as Americans’ most desired state to live.When asked where they would most like to live (excluding their current state), Florida landed at the top of the list. Overall, sunshine and waterfront acreage were consistent themes among the most popular states, with California (2) and Hawaii (3) rounding out the top three. However, non-beach states Colorado (4) and New York (5) closed out the top five states.
This year’s top five were, for the most part, also top-five honorees the last time this question was asked in 2013, Harris reports. The sole exception is New York, which edged into the top-five after a sixth place showing. Texas, meanwhile, dropped out of the top five to No. 6.

The remaining 9 states on the “top 15” list include diverse geographies, though most do fall within a few general categories:

The coasts are well represented: Along with Florida, the Carolinas – North (7) and South (12) – and Georgia cover most of the southeastern United States beachfront. Meanwhile, Oregon (9) and Washington (14) make for full west coast coverage (when combined with California). Perhaps for some it’s not the coast but the warmth, which takes precedence, as landlocked-but-sunny states Arizona (8) and Tennessee (10) also make the list.

Many states have both admirers and detractors, according to Harris.

California may be 2nd on the list of states Americans would like to live in, but it also tops the list of states where Americans would least like to dwell. New York and Alaska may both be top 15 performers when Americans say where they would like to live, but they also round out the top three states where Americans would not want to live (2 and 3, respectively). Mississippi (4) and Texas (5) complete the top 5 for the dubious list, with Alabama (6), Florida (7), Illinois (8), Michigan (9) and the District of Columbia (10) completing the top 10.

Favorite and least favorite cities

Americans continue their love/hate relationship with New York City, which has topped The Harris Poll’s list of cities where Americans most want to live for well over a decade – but it also tops the list of cities they’d least like to live.

California and Florida are well represented among the top 10 most desired cities, with San Diego, Los Angeles and San Francisco nabbing the 2nd, 4th and 6th spots for the Golden State, while Miami and Orlando bring the 5th and 10th spots home to the Sunshine State.

Denver, CO (3) fills in the lone gap in the top five, while Honolulu, HI (7); Atlanta, GA (8) and Seattle, WA (9) fill out the rest of the top 10.

The top three cities Americans would least want to live in have remained the same since this question was first asked in 2010 with New York, followed by Detroit (2) and Los Angeles (3). Chicago repeats in 4th place, while Dallas, Texas (5) rounds out the top five. Miami (6); San Francisco (7); Houston (8); Washington, D.C. (9) and Las Vegas (10) complete this less desirable top 10 list.

The Harris Poll surveyed 2,232 U.S. adults online between Nov. 11 and 16, 2015.

How will higher interest rates affect housing?

WASHINGTON – Dec. 11, 2015 – The timer is ticking: The Federal Open Market Committee is less than a week away from a vote to raise the federal funds rate for the first time since June 2006, according to most analysts’ predictions. An uptick in the federal funds rate would then prompt interest rates to move higher.
Some housing analysts say just anticipation of a rate hike has already affected the housing market.

“The housing market’s capacity for existing-home sales is declining with the expectation of a Fed rate increase, pre-adjusting mortgage rates and a slowdown in house price appreciation,” says Mark Fleming, chief economist at First American Financial, in a new report on the fourth quarter Real Estate Sentiment Index. “Market capacity remains modestly in excess of actual sales due to leverage-assisted housing asset inflation, which is home price appreciation fueled by low mortgage rates. Rising mortgage interest rates and moderation in house price appreciation were the most important market fundamentals that reduced market capacity this month. Now that interest rates are pre-adjusting in response to signals from the Fed for a highly expected increase in December, demand is also declining.”

A 25-basis point rise in the 30-year fixed-rate mortgage, for example (which was at 3.95 percent this week), would likely slow home appreciation by 1 percent more than expected without the rate increase, Fleming says. He also predicts that existing-home sales would then slow by about 2.5 percent on annualized and seasonally adjusted basis – a decline of less than 150,000 sales a year.

“The housing market isn’t doomed by a Fed rate increase, but demand would fall modestly,” Fleming maintains.

Just how big of an impact could it have to potential home shoppers’ wallets? Forbes.com cites an example based on a 30-year fixed-rate mortgage, 10 percent downpayment, $350,000 home and 4 percent interest rate. Under that example, it would cost home purchasers about $1,503.86 per month plus taxes, homeowner’s insurance and Private Mortgage Insurance. That same 30-year fixed-rate mortgage with a 4.5 percent interest rate would cost a homebuyer $1,596.06 per month – an extra $92.20 per month, or $33,191.54 over the 30-year life of a mortgage. If rates rise to 5 percent, the costs would jump to an extra $184.40 per month and $66,383 over the 30-year life of the loan.

Despite the uptick in rates, “expectations for future homeownership demand remain positive, despite changing market conditions,” Fleming notes.

According to the First American report, interest rates would need to reach 5.1 percent before significantly influencing the volume of residential transactions.

Source: “What Will the Looming Fed Rate Hike Do to Housing?” HousingWire (Dec. 9, 2015) and “How Much House Will a Rate Hike Cost You?” Forbes (Nov. 8, 2015)
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

Study: Buying beats renting in most Fla. metros

BOCA RATON, Fla. – Dec. 11, 2015 – The latest national housing market index produced by Florida Atlantic University (FAU) and Florida International University (FIU) faculty indicates the housing market in several cities – including Dallas, Denver and Houston – may be nearing pricing bubble territory.

Based on numbers from the end of the third quarter, the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index comes on the heels of the recent S&P/Case-Shiller Home Price Index, which found home prices across the nation rose 4.9 percent in a 12 month-period ending in September.

“The U.S. housing market across the board is moving toward rent territory,” says Ken Johnson, Ph.D., a real estate economist, one of the index’s authors and an associate dean of graduate programs and professor in FAU’s College of Business.

The BH&J Index measures the relationship between purchasing property and building wealth through increasing equity versus renting a comparable property and investing in a portfolio of stocks and bonds. It examines the entire housing market in the United States and isolates the markets of 23 key cities.

Currently, Dallas, Denver and Houston are at or above previous index scores that strongly favor renting as opposed to buying in terms of wealth creation.

“It is no longer a matter of if, but when and to what extent, we will see a downward pricing event in these three cities,” Johnson says. “Prices are rising too fast in these cities, and there are no underlying fundamental changes in their economies to support current pricing, especially in the face of a booming stock market.”

The housing markets in some cities, such as Miami, Honolulu, Pittsburgh, Portland, San Francisco and Seattle, are considered a tossup between ownership and renting in terms of wealth creation. While prices are on the rise, they are nowhere near the danger point for triggering dramatic pricing declines.

“A continuation of rapid and dramatic price increases in these real estate market places will almost certainly lead to pricing bubbles and resulting local real estate crashes,” Beracha says. “On the other hand, a slowdown in pricing in these areas should allow these cities to pull back from the edge.”

Some cities – Chicago, Cincinnati and Cleveland – remain strongly in buy territory with negative BH&J scores. These scores are suggestive of vibrant real estate markets that have room to grow in terms of pricing. The only real danger is that of market contagion, in which negative pricing events in one real estate market lead to downturns in other markets.

“Interestingly, Houston had relatively low BH&J scores back in 2006 and fared pretty well during the collapse,” Johnson says. “Unfortunately, Houston is now leading the pack in terms of renter friendly markets, which is not good in terms of future expected housing prices.”

The BH&J Index is published quarterly and is available online.

© 2015 Florida Realtors®