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FEMA Reverses Itself on Flood Insurance for Mortgages
- Monday, 31 December 2018

The Federal Emergency Management Agency will issue and renew flood insurance policies, reversing an earlier ruling from the agency. The decision was controversial because 40,000 home sales are lost every month that flood insurance is not available to borrowers, according to the National Association of Realtors.
"FEMA and the Administration deserve credit for hearing our concerns and acting swiftly to address them," says NAR President John Smaby. "This new decision means thousands of home sale transactions in communities across the country can go forward without interruption, as Congress intended when it renewed the flood insurance program earlier this week.”
Congress on Dec. 21 passed legislation that extends the National Flood Insurance Program until May 31, 2019. In an unexpected policy decision, FEMA on Dec. 26 said it couldn't allow insurers to issue and renew federal policies while the partial government shutdown was ongoing.
The ruling was unexpected because in past government shutdowns, FEMA continued to operate the program as authorized. NAR, along with other organizations, including the Property Casualty Insurers Association of America and the Independent Insurance Agents & Brokers of America, urged policy makers to reevaluate the decision. Congress expressed concern as well.
"We thank the administration and Congress for stepping up so quickly to ensure the smooth continuation of flood insurance at a time when market disruption would be extremely hard-felt," says Shannon McGahn, NAR senior vice president of government affairs.
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Pending Home Sales Drop 0.7 Percent in November
- Friday, 28 December 2018

Pending home sales overall slipped in November but experienced small increases in the Northeast and the West, according to the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 0.7 percent to 101.4 in November, down from 102.1 in October. However, year-over-year contract signings dropped 7.7 percent, making this the eleventh straight month of annual decreases.
"The latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates," said Lawrence Yun, NAR’s chief economist. "The West crawled back lightly but is still experiencing the biggest annual decline among the regions because of unaffordable conditions," Yun said.
Pending contracts have reached their lowest mark since 2014, there is no reason to be overly concerned, and he predicts solid growth potential for the long-term. All four major regions sustained a drop when compared to one year ago, with the West taking the brunt of the decrease.
"Land cost is expensive, and zoning regulations are too stringent,” said Yun. “Therefore, local officials should consider ways to boost local supply; if not, they risk seeing population migrating to neighboring states and away from the West Coast."
And the government shutdown won’t be good for the housing market.
"Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas," Yun said. "The longer the shutdown means fewer homes sold and slower economic growth."
Among the cities with the greatest year over year increase in active listings are Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., San Diego-Carlsbad, Calif., and Providence-Warwick, RI., according to realtor.com.
"Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000,” said Yun. “But given the 17 million more jobs now compared to the turn of the century, the home sales are clearly underperforming today. That also means there is steady longer-term growth potential."
A Regional Look at The Index
The Pending Home Sales Index in the Northeast rose 2.7 percent to 95.1 in November and is now 3.5 percent below a year ago. In the Midwest, the index fell 2.3 percent to 98.1 in November and is 7.0 percent lower than November 2017.
Pending home sales in the South fell 2.7 percent to an index of 115.7 in November, which is 7.4 percent lower than a year ago. The index in the West increased 2.8 percent in November to 87.2 and fell 12.2 percent below a year ago.
Read more...S&P CoreLogic Housing Price Index Reports 5.5% Annual Gain
- Friday, 28 December 2018

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, has reported a 5.5% annual gain in October, remaining unchanged from the previous month. The 10-City Composite annual increase came in at 4.7%, down from 4.9% in the previous month. The 20-City Composite posted a 5.0% year-over-year gain, down from 5.2% in the previous month.
Las Vegas, San Francisco and Phoenix reported the highest year-over-year gains among the 20 cities. In October, Las Vegas led the way with a 12.8% year-over-year price increase, followed by San Francisco with a 7.9% increase and Phoenix with a 7.7% increase. Six of the 20 cities reported greater price increases in the year ending October 2018 versus the year ending September 2018.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.1% in October. The 10-City and 20-City Composites did not report any gains for the month. After seasonal adjustment, the National Index recorded a 0.5% month-over-month increase in October. The 10-City Composite and the 20-City Composite posted 0.5% and 0.4% month-over-month increases, respectively. In October, nine of 20 cities reported increases before seasonal adjustment, while 18 of 20 cities reported increases after seasonal adjustment.
"Home prices in most parts of the U.S. rose in October from September and from a year earlier," says David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. "The combination of higher mortgage rates and higher home prices rising faster than incomes and wages means fewer people can afford to buy a house.”
Home prices are up 54%, or 40% excluding inflation, since they bottomed in 2012. Reduced affordability is slowing sales of both new and existing single-family homes. Sales peaked in November 2017 and have drifted down since then.
"The largest gains were seen in Las Vegas where home prices rose 12.8% in the last 12 months, compared to an average of 5.3% across the other 19 cities,” said Blitzer. “This is a marked change from the housing collapse in 2006-12 when Las Vegas was the hardest hit city with prices down 62%."
After the last recession, Las Vegas diversified its economy through the addition of a medical school, becoming a regional center for health care, and attracting high-technology employers. And the results are that employment is increasing 3% annually, twice as fast as the national rate."
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