April 16, 2010
By Danielle Hale, Research Economist
- The U.S. Treasury publishes estimates of the impact of recovery act programs, which includes information on the homebuyer tax credit from the IRS. Though this report is dated February 28, 2010, it was published on the web only in the last week. The notes in the report indicates that it shows information on credits claimed through January 23, 2009, but most likely covers 2009 credits claimed through Jan 2010.
- The previous Treasury estimate (IRS data) was dated December 31, 2009 and has homebuyer tax credit data by state: Treasury Recovery Act Data Recovery Act Data by State through November 21, 2009.
- Find out your state’s official data for how many files and credits were claimed, and what the average credit size was here: Treasury Recovery Act Data Recovery Act Data by State through February 28, 2010. Note: At this time, not all eligible buyers have filed.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.
"Copyright National Association of REALTORS®, Reprinted with permission."
Economists' Commentary: Metro-Area Housing Equity, Part One
April 14, 2010
For the third year in a row, NAR Research has looked at the equity a homeowner might have in a home owned for 5, 10, 15, and 20 years if it were purchased at the median price. This analysis allows us to learn about the effect of price patterns in many metro areas on homeowner equity over longer periods of time. Examining longer periods of time is important because typical buyers expect to own their home for 7 to 15 years, depending on the buyer’s age. Among all buyers, the typical expected time of ownership is 10 years. This is the first year that the effect of falling house prices has shown up in our look at equity in a wide-spread manner at the 5 year time frame. Still, over a 10 year period, the typical expected time of ownership, the equity situation for our experimental buyers is much more sanguine.
Equity and Wealth
Homeowner equity is a substantial component of homeowner wealth. The Federal Reserve's Survey of Consumer Finances, conducted once every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated. The most recent survey, concluded in 2007, offers a picture of the situation before home price declines and the tumbling equities market hit household balance sheets. At that time, median homeowners had well over $200,000 in net worth compared to median renters who had just over $5,000. Furthermore, $200,000 was the median value of owners’ homes. In the research paper accompanying the survey results, Fed researchers conducted a thought experiment to determine how market declines might have impacted the mean and median households through October 2008.
Looking at aggregate data, the National Association of Realtors® estimated the impact for renter and homeowner households through calendar year 2008. The result, shown below in Figure 1, suggests that despite declines in equity and housing markets, homeowners ended 2008 with a net worth orders of magnitude greater than renters. How has the recovery of the stock market and a sluggish housing market affected owners and renters? For the first time ever, the Federal Reserve resurveyed the 2007 participants in 2009 to directly measure how the crisis and recession affected their finances. These results are expected in late 2010.
National Association of Realtors® Research, Profile of Home Buyers and Sellers 2009
This is part one in a two part commentary. The specific results of NAR’s study will follow in the tomorrow’s second installment.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.
"Copyright National Association of REALTORS®, Reprinted with permission."
Did You Know: Global Home Prices
April 19, 2010
According to the the Organization for Economic Co-operation and Development’s (OECD) interim assessment of the economic outlook released last week, G-7 economies will continue to grow in the first half of 2010, but at a slower speed and with different rhythms. OECD is 30-nation think tank based in Paris.
Most interestingly, however, the report showed that at the end of 2009, house prices have turned around in almost 75 percent of the 19 OECD countries.
Figure 1
Source: OECD Economic Outlook: Interim Assesment, April 2010
In a separate article by Deutsche Bank, titled “Housing markets in OECD countries - Risks remain in Europe”, the group discusses how far the correction of house prices has progressed in Europe and the US.
Figure 2
Source: Housing markets in OECD countries—Risk remains in Europe (PDF)
Based on a range of indicators, DB finds that the correction is fairly advanced in the US but has still a considerable way to go in Europe. Further adjustment seems likely in Spain, Ireland, the Netherlands, but also Italy, France, and, to a somewhat lesser extent, in the UK. The need for further house price adjustment in these countries poses risks to both the banking sector and economic growth.
Furthermore, while house price adjustment is advanced or under way in the industrial countries, there is an increasing risk of new bubbles in other regions of the world. This holds in particular for Asian housing markets. House prices have already increased above pre-crisis levels in Shanghai and Hong Kong and they are close to their previous peak in Singapore.
For more information, see:
• OECD Economic Outlook: Interim Assesment, April 2010
• Housing markets in OECD countries—Risk remains in Europe (PDF)
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®.
Copyright National Association of REALTORS®, Reprinted with permission.
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