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Tag: home sales

  • Report: Homeownership rate dips in Minnesota, state no longer regional leader

    Last year, Minnesota’s homeownership rate saw its largest single drop in 40 years, a recent housing report shows. 

    That new rate is 71% after being as high as 75% just a few years ago. That makes the state no longer the regional leader for homeownership—Iowa has surpassed Minnesota for that top spot, according to the Roseville-based Housing Affordability Institute.   

    “It’s natural for home ownership rates to fluctuate, but the level of fluctuation we’ve seen in the last couple of years is really what is concerning,” said Nick Erickson, executive director of the institute.

    Affordability and availability are to blame. Minnesota is short of nearly 100,000 homes–two-thirds in the Twin Cities metro—and has the highest median home price for new and existing single-family homes in the upper Midwest region.

    There are fewer permits for new home builds despite that growing need for housing, the report found. Demand for homes that outpaces supply drives up costs and prices people out of the market, Erickson said.

    And not enough affordable rental units doesn’t help either as people try to save for down payments.

    “This is a problem that is now kind of feeding itself and without intervention, it’s just going to continue,” he told WCCO in an interview Wednesday. 

    The National Association of Realtors earlier this month said the typical age for a home buyer has climbed to 40 last year, an all-time high last year.

    Changing course, Erickson said, requires government intervention. 

    A bipartisan package of bills to address affordable housing at the state capitol this past legislative session didn’t clear the finish line, though lawmakers vow to renew their push in February when the Legislature returns once again. 

    “We’ve made more progress this year on this issue than last year,” Rep. Mike Howard, DFL-Richfield, one of the lead authors of the “Yes to Homes” package, said earlier this year. 

    Among the proposals put forward that didn’t ultimately pass is legislation designed to cut down red tape in order to build more starter homes. like townhomes and duplexes, and ensure those plans are approved by cities in a timely manner by streamlining that process.

    Other bills focused on lifting parking directives and removing aesthetic requirements — the mandated use of premium products as the minimum construction standard — that supporters say are barriers to development. 

    “The bipartisanship that surrounds it here in Minnesota mirrors what we’re seeing across the country at the state level, and it really is encouraging to see, but I think it also speaks to the depth of the challenge,” Erickson said. “This is a crisis that is affecting Minnesotans across the board as it is Americans.”

    Caroline Cummings

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  • Long Island home sales rise as prices ease, inventory falls | Long Island Business News

    THE BLUEPRINT:

    • Long Island logged 2,218 home sales in October, up from September and last year.

    • Inventory fell to 5,783 listings, nearly 10% lower year over year.

    • Median home prices dipped in both Nassau and Suffolk counties.

    • Mortgage rates are trending lower, with forecasts pointing to further easing next year.

     

    The number of Long Island home sales rose last month, as inventory fell and prices pulled back. 

    There were 2,218 closed home sales in Nassau and Suffolk counties in October, 204 more than the previous month and 109 more than in Oct. 2024, according to numbers from OneKey MLS. 

    Inventory decreased last month as compared with the previous month and also dropped year over year. 

    There were 5,783 Long Island homes listed for sale at the end of October—2,473 in Nassau and 3,310 in Suffolk. That’s 312 fewer homes than were listed for sale the previous month, and nearly 10 percent fewer than the 6,421 homes that were listed for sale at the end of Oct. 2024. 

    The numbers for listings and sales include single-family homes, condominiums, and co-ops. The Suffolk numbers don’t reflect all sales on the East End. 

    Home prices retreated last month, falling in both Nassau and Suffolk. 

    The median price of closed single-family home sales in Nassau last month was $837,000. That’s $12,000 less than the September median price of $849,000, but still 6.1 percent higher than the $789,000 median price recorded in Oct. 2024. 

    In Suffolk, the median price of closed single-family home sales last month was $701,000, which is $19,000 more than the September median price of $720,000 and 4.6 percent higher than the $670,000 median price of Oct. 2024. 

    Mortgage rates continue to trend lower. The average rate for a 30-year fixed mortgage loan in New York was 6.19 percent as of Monday, according to bankrate.com. That’s down a bit from September, and below the 2024 average rate of 6.7 percent. 

    Mortgage rates are projected to decline modestly, averaging around 6 percent next year, according to Lawrence Yun, chief economist for the National Association of Realtors. He said that while rates are influenced by more than Federal Reserve decisions alone, broader economic factors are contributing to gradually lower borrowing costs. 

    “As we go into next year, the mortgage rate will be a little bit better,” Yun said in a NAR statement. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.” 

    Nationally, existing home sales are projected to rise by around 14 percent in 2026, according to Yun, though prices are expected to stay firm. He said the expected rebound reflects the easing mortgage rates and improving market stability after several challenging years. Home prices are forecast to increase by 4 percent next year, supported by steady demand and persistent supply shortages.  

    “Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.” 


    David Winzelberg

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  • What happens if you sell real estate to family for a dollar? – MoneySense

    Fixing a past tax mistake

    If you discover a mistake, or you want to come forward with an omission, there is a path to do so with the Canada Revenue Agency (CRA). It is called the Voluntary Disclosure Program (VDP). According to CRA: 

    “The Voluntary Disclosures Program (VDP) is an opportunity for taxpayers to inform the Canada Revenue Agency (CRA) about and correct errors or omissions in their tax obligations. If relief is provided by the CRA under the VDP, a taxpayer may receive some penalty and interest relief, and will not be referred for criminal prosecution. Any taxes owing will still have to be paid by the taxpayer in full.”

    Changes were introduced for the VDP on October 1, 2025. The application form, Form RC199, Voluntary Disclosures Program (VDP) Application, was simplified to make it easier to file. The program has also become less restrictive. CRA has begun a program of sending education letters about unreported income or ineligible expenses to ensure compliance that does not prevent a taxpayer from applying. Prior to the changes, a VDP needed to be unprompted. 

    If you are under audit or were uncompliant in the past in an egregious manner, you may be restricted from a VDP application. 

    There are two types of relief that the CRA provides under the VDP:

    • General relief normally applies to unprompted applications. These applications will receive 75% relief of the applicable interest and 100% relief of the applicable penalties.
    • Partial relief normally applies to prompted applications. These applications will receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties.

    Principal residence exemption for a cottage

    The good news for your mother’s situation, Susan, is that there was probably no tax payable on the transfer of her cottage to you. Often, a cottage is subject to capital gains tax when it is sold, transferred, or upon the death of the second spouse—but not always.

    A cottage can qualify for the principal residence exemption (PRE). The PRE is available to use for any property you ordinarily occupy, with no limit on the number of days. It does not matter where you primarily live, nor where your mailing address is registered. 

    Since the only real estate your parents ever owned was this cottage, Susan, the property was likely non-taxable, whether it was sold to you for $1 or for fair market value by your mother. 

    Of note is that since the 2016 tax year, there is a requirement to report the disposition of a principal residence on your tax return in order for it to qualify. Previously, it was not a requirement to report a property that qualified as your principal residence for every year that you owned it.

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    Selling or transferring real estate for less than fair market value

    It is also worth mentioning that selling a cottage that does not qualify for the principal residence exemption for less than the fair market value  is not a way to avoid tax, nor is gifting it for no consideration. A sale or transfer to a non-arm’s length party—like a child—is considered a sale at the fair market value with tax payable accordingly by the seller or transferor. 

    For the child who acquires the property, there can also be an element of double taxation. If their acquisition cost is below the fair market value, they could end up paying tax unnecessarily on the difference between the acquisition cost and the fair market value at the time of the transfer when they dispose of the property in the future. 

    I think this is what you are worried about, Susan. But the good news is the transfer to you may be considered to have taken place at the fair market value, even though you only paid $1. CRA addressed this in a tax interpretation in 2019 (24 January 2019 2018-0773301E5):

    “In certain circumstances, the Canada Revenue Agency may be willing to accept that the transfer of property between non-arm’s length parties for the nominal amount of $1 could be considered a gift. For example, if the agreement governing the transfer provides for consideration of $1 merely to ensure that the agreement is legally binding, the CRA may consider the transfer to be a gift.”

    This may be the case in your situation, Susan. They also say:

    “Paragraph 69(1)(c) of the Act will apply where a taxpayer (the recipient) has acquired property by way of “gift, bequest or inheritance.” If paragraph 69(1)(c) applies, the recipient is deemed to acquire the property at FMV [fair market value].”

    So, you may be in the clear. If in doubt, you could contact CRA to request a generic Technical Interpretation or a more formal Income Tax Ruling specific to your situation. 

    The takeaway: For anyone considering a transfer or sale of real estate to a family member, professional advice is a must.

    Leave your question for Jason Heath

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    About Jason Heath, CFP


    About Jason Heath, CFP

    Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

    Jason Heath, CFP

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  • Foreclosure filings on the rise, report finds

    As more U.S. homeowners struggle to keep up with mortgage payments and maintenance costs, new data shows the number of property foreclosures is steadily rising. CBS News contributor Javier David has more.

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  • Sales up, prices down in GTA housing market – MoneySense

    The Toronto Regional Real Estate Board said the 5,592 homes sold last month was up 8.5% from September of last year, and up 2% on a seasonally adjusted basis from August. The rise in sales came as the average selling price was down 4.7% from last year to $1,059,377, and the composite benchmark price was down 5.5% in September. Compared with August, the average selling price ticked up 0.2%. 

    “The Bank of Canada’s September interest rate cut was welcome news for homebuyers,”  said TRREB president Elechia Barry-Sproule in a press release. “With lower borrowing costs, more households are now able to afford monthly mortgage payments on a home that meets their needs.” 

    The central bank cut its benchmark rate by a quarter-percentage point to 2.5% on Sept. 17, breaking a streak of three consecutive holds since March.

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    GTA home sales show early rebound

    Consumers are starting to recognize “a new normal” when it comes to the economic and political situation, said Cailey Heaps, president of the Heaps Estrin Real Estate Team in Toronto. Although the GTA has not returned to the peak levels of activity seen during the pandemic years, there are “rays of sunshine within the market,” said Heaps.

    “We’re likely near the bottom or climbing out of the bottom, so it feels like opportunistically a good time to enter (the market),” she said in a phone interview. “I think there’s sort of this buyer mindset of, ‘It’s OK to buy again.’”

    New listings of 19,260 were up 3.9% from last year, and down 3.3%, seasonally adjusted, from August. Active listings were up 18.9% from last year with 29,394 homes on the market.

    In the City of Toronto, there were 2,063 sales last month, a 13.2% increase from September 2024. Throughout the rest of the GTA, home sales were up 5.9% to 3,529. Overall, all property types saw more sales in September compared with a year ago throughout the region. The largest increase was in the semi-detached segment, which was up 11%, followed by detached houses with a 9.6% increase and condos with a 7.2% increase. The number of townhouses that changed hands was 4.4% higher than in September 2024.

    Lower rates may spur buyer activity

    The board said more interest rate cuts from the Bank of Canada could help further push up sales.

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    “While home sales have improved over the past year, they still remain below normal levels relative to the number of households in the GTA,” said the board’s chief information officer Jason Mercer. “Two more 25-basis-point interest rate cuts by the Bank of Canada would see monthly mortgage payments move more in line with homebuyers’ average incomes, further spurring home sales and related economic activity.”

    Heaps said “it will be some time” before the market truly soars back to peak levels, but continued interest rate cuts are one factor that will lure potential buyers off the sidelines. “We need to see tightening of inventory and that will just inherently happen as buyers re-enter the market,” she said. “From a broader perspective, people just need to get comfortable that the Canadian economy is heading in the right direction.”

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  • Real estate rebound faces new risk as shutdown looms – WTOP News

    An uptick in home sales has been welcome news for realtors and homeowners, but there is concern that a government shutdown could once again slow things down.

    After disruptions that led to a below-average spring market, a late-summer uptick in home sales has been welcome news for realtors and homeowners. But there is concern that a government shutdown could once again slow things down.

    Despite all this, and interest rates hovering near 6%, Burr said that coming out of the summer, people have begun to buy and sell homes. But he’s worried the shutdown could make this recovery short-lived.

    “The main thing is that the shutdown is going to affect buyer confidence in the future,” said Corey Burr, senior vice president at TTR Sotheby’s International Realty.

    Burr said the real estate market in the region is heavily influenced by what happens on Capitol Hill and changes in federal employment.

    “Our spring market was interrupted by Liberation Day in early April, and what is typically the hottest time of our market, year in and year out, became dead for about a six-week period,” Burr said.

    “Liberation Day” is a phrase President Donald Trump has used to describe April 2, the day a set of import tariffs was rolled out.

    Buyer confidence also took a hit from the DOGE cuts, which Burr said had a “serious psychological effect” on buyers.

    “It really just put our market into a frozen mode. Buyers got very nervous,” he said.

    Burr pointed to Silver Spring, Maryland, as a bellwether for the region. He said the area has seen a longer time on the market for moderately-priced homes, which he believes is partly due to federal layoffs.

    He also expressed concern about the possibility of additional layoffs, noting that federal agencies have been instructed to prepare for staff reductions as part of the shutdown response.

    “The specter of even more layoffs is going to affect the region adversely,” Burr said.

    He said what’s needed now is what he calls a “Goldilocks economy,” with inflation down to 2%, moderate job growth, and mortgage rates in the mid-5% range. That, he said, would give the Federal Reserve the flexibility to lower interest rates further.

    “If we can achieve a Goldilocks economy, I think that the rate on the 30-year fixed is going to come down more into the mid-fives, and that has proven to be a number where existing homeowners are willing to trade in their low interest rate that they’ve had for the last several years in order to right-size their housing to where they are in their lives,” Burr said.

    But for now, Burr said the full impact of the shutdown and the end of government payments for federal employees affected by the DOGE cuts remains to be seen.

    “It would be very hard to take if this recent surge in activity gets interrupted by a lengthy shutdown by the government,” Burr said.

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    © 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

    Mike Murillo

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  • Average Rate On A 30-Year Mortgage Holds Steady At Lowest Level In Nearly 10 Months – KXL

    (Associated Press) – The average rate on a 30-year U.S. mortgage held steady this week at its lowest level in nearly 10 months, an encouraging sign for prospective homebuyers who have been held back by stubbornly high home financing costs.

    The long-term rate was unchanged from last week at 6.58%, mortgage buyer Freddie Mac said Thursday.

    A year ago, the rate averaged 6.46%.

    Borrowing costs on 15-year fixed-rate mortgages declined, with the average rate now at 5.69%.

    Elevated mortgage rates have kept the U.S. housing market in a slump since early 2022, when rates began climbing from pandemic lows.

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    Grant McHill

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  • DC home prices are still rising, but there’s a caveat skewing that headline – WTOP News

    While home sales have slowed, prices are still rising, which could indicate buyers are still willing to pay list prices or close to them for homes in the D.C. market.

    The D.C. area’s most expensive home sale in the second quarter was a McLean, Virginia, home that sold for $14 million.(Courtesy Washington Fine Properties)

    Home sales in the D.C. region’s market have slowed this spring and summer, and so have annual price gains. While sales have slowed, prices are still rising, which could indicate buyers are still willing to pay list prices or close to them for homes on the market here.

    But the metric that measures the median selling price of all properties being sold, including those in the upper 5% of price range, is defined as the luxury market. In the D.C. metro, that is homes priced at $1.8 million or more.

    “The most active buyers in the market right now are higher-income buyers,” said Lisa Sturtevant, chief economist at listing service Bright MLS. “Because they are more active in the market, they are actually skewing that median sold price, making it look like the overall market is seeing price gains. But it is really about the middle of homes being sold.”

    The luxury market has traditionally seen less competition from buyers, but Bright MLS noted a change in competition at the higher level starting in the second quarter of this year.

    “The luxury market is still pretty competitive,” Sturtevant said. “Homes are selling more quickly than other homes in the overall market. And, as always, luxury sales are more likely to be cash sales. So right now, the luxury market is slowing, but it is still more resilient than the overall market.”

    The annual median selling price gain in the overall D.C.-area market in the second quarter was 2.0%, compared to 2.3% in the luxury market.

    Luxury buyers also need to ask quickly. The median days on market for those listings in the second quarter was just 11 days, with 25.1% of sales closing above list price.

    The luxury market also appears to be more isolated from federal government spending and job cuts in the D.C. region than the overall market, though Sturtevant said that may change.

    “The threshold for the luxury market is $1.8 million,” she said. “That is an expensive home. But it is also a home that people who work in the federal government could potentially afford to purchase. We are going to see more impact on the housing market from the federal government cuts this fall, and I think that could rise up into the luxury segment of the market.”

    The definition of the luxury market may also need rethinking. Those entry-level luxury market prices no longer necessarily represent only wealthy buyers who may have no concern about how local economic changes affect them.

    “I think we are going to have to do a better job at differentiating between luxury — those $1.8 million and $2 million homes that include a lot of suburban, single-family homes. We need to distinguish that luxury market from the upper end,” Sturtevant said. “Because I think we are going to see a divergence in how those two markets perform this fall as the federal layoffs and cuts have more of an impact on our local housing market.”

    The D.C. region dominates the luxury market in the mid-Atlantic region, which Bright MLS listings cover. Five of the top 10 luxury market ZIP codes in the mid-Atlantic are here, including Dupont Circle’s 20007 in D.C., where 42% of second quarter sales were defined as luxury. In McLean, Virginia’s 22101, 38% of sales were luxury. ZIP codes in Bethesda, Arlington and Potomac all saw an outside share of total sales fall in the luxury category in the second quarter.

    ZIP code 20007 also ranked No. 2 in the mid-Atlantic for sales in the “ultra luxury market,” with 19% of sales priced in the top 1%, topped only by 24% in Princeton, New Jersey.

    All-cash sales accounted for one-third of all luxury sales in the second quarter. In the mid-Atlantic, the top all-cash market was Maryland’s Eastern Shore, where more than half of luxury properties are purchased with cash.

    The highest-priced sale in the D.C. region in the second quarter was a riverfront estate that sold for $14.05 million.

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    © 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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  • How a rare type of mortgage is landing homebuyers a 3% rate

    How a rare type of mortgage is landing homebuyers a 3% rate

    As mortgage rates stagnate around 6%, prospective homebuyers are feeling nostalgic for the 3% interest rates of 2020 and 2021. Google search results for the term “assumable mortgage” spiked in May, following a steady upward trend starting in 2022.

    Mortgage assumptions allow buyers to take over an existing mortgage at its current rate, possibly securing mortgage rates as low as 2% or 3% depending on when the original mortgage was taken out.

    Mortgage assumptions were a popular way to buy a house in the 1970s and 1980s but have largely fallen out of public consciousness. The Garn St.-Germain Act of 1982 allowed private lenders to enforce a due-on-sale clause, requiring payment in full if a property changes hands, making assumable mortgages near obsolete outside of divorce and property inheritance.

    Now a rarer find in the U.S. housing market, a specific subsect of mortgages can still be assumed by outside buyers: Veterans Affairs, Federal Housing Administration, and United States Department of Agriculture mortgages.

    “Twenty percent to 25% of the homes on the market will be fully assumable at one time,” says Raunaq Singh, Roam founder and CEO. But, “the number of assumption transactions that are happening is far fewer than the number of mortgages which can be assumed.”

    Only 4,052 FHA-backed mortgage assumptions were completed in 2023. Still, that’s a 59% increase compared to 2021, according to numbers provided by the FHA. The VA has seen an even larger jump with 713% more mortgage assumptions in 2023 compared to 2021. Both the VA and FHA are already outpacing last year’s assumption totals at more than 5,000 assumption per department so far in 2024.

    Watch the video above to learn more about assumable mortgages, how they work, and why they can come with their own set of hurdles.

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  • Redfin CEO: Inventory will be the gating factor for home sales in 2025

    Redfin CEO: Inventory will be the gating factor for home sales in 2025

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    Glenn Kelman, Redfin CEO, joins ‘Money Movers’ to discuss Kelman’s view of the housing market in September, the magic rate number that could get homebuyers back into the market, and what it’ll take for more inventory to hit the market.

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  • Could the “YIMBY” movement fix America’s affordable housing shortage?

    Could the “YIMBY” movement fix America’s affordable housing shortage?

    More U.S. cities and states are starting to say “yes, in my backyard” as they struggle to meet the housing needs of growing populations.  

    The “YIMBY” movement is a political effort to tackle the country’s housing shortage by increasing the housing supply with strategies like changing zoning codes and other regulations that limit home density. The United States is millions of homes short of what’s needed to meet demand, according to the national nonprofit group “Up for Growth.”   

    Minneapolis resident Bernice Duncan has been searching for a new home with more space for more than five years.  The telehealth professional works from home in a cramped two-bedroom apartment she shares with her two adult sons.  

    “Everybody is not able to move freely, like you would in a in a house or, you know, having your own office space,” said Duncan. 

    During the years she’s been looking, property values have soared. With a $1,600 monthly housing budget, she says she’s been priced out of the market. 

    “It’s been a struggle,” Duncan said. “As the economy continues to grow, your paycheck don’t,” she added. “You’re not going to pay less than $2,000.”  

    Saying “yes” to more housing 

    Twin-Cities YIMBY was formed in 2023 to advocate for policies that will generate more affordable housing options for people like Duncan. The group supports the elimination of zoning restrictions to allow for more home density across the Minneapolis area.  

    “In the past five years, our median housing price has increased by $100,000, which is a huge increase” said Paige Kahle, a realtor who founded Twin Cities YIMBY along with colleagues Nichole Hayden and Meghan Howard.  

    YIMBYs have been building a coalition of pro-housing advocates across the country to counter those who say “not in my back yard,” known as NIMBYs. 

    “I think it’s getting easier. But literally when you go to the local meetings, the city council meetings, planning commission meetings, there’s still NIMBYs that are very loud and very organized and often kind of angry because they don’t want this kind of housing near them,” said Kahle. 

    But without a plan to bring housing costs down, Kahle says the shortage is hurting home buyers and renters alike.  

    “They’re paying 50% of their income, 60% of their income on housing, which just isn’t sustainable,” she said.  ”We need more housing and we need it quickly,” said Kahle. “Traditionally, how we’ve addressed the housing crisis is through subsidies, massive subsidies to bring down the cost of housing for folks. But there just aren’t enough subsidies in the world to do that. So, we really need to look at these other mechanisms to increase the density and lower the cost of housing.” 

    Minneapolis 2040: The city’s plan 

    Addressing these concerns is the goal of the Minneapolis 2040 Comprehensive Plan. Passed in 2018, the ambitious bipartisan bill implemented historic zoning reforms to increase the number of available housing units including:  

    • The elimination of single-family-only zoning to permit build duplexes, triplexes and fourplexes in all neighborhoods.  
    • Height minimums for new residential buildings in high-density zones.  
    • The elimination of minimum parking requirements for new housing developments.  

    The plan has faced opposition from some homeowners who argue that increased density could undermine the character and charm of single-family neighborhoods.  

    “The 2040 Plan will hurt the uniqueness and architectural heritage of many neighborhoods,” said one opponent during a 2018 City Planning Commission meeting.  

    Implementation of the plan was paused in 2022 after environmental groups filed a lawsuit arguing the plan may have severe unintended consequences to the environment. In May, a state appeals court ruled to lift an injunction on the plan, and just last month the Minnesota State Supreme Court denied a petition for further review of the objections, clearing the way for the plan to continue.  

    “People want a place that they can live, [where] they can afford to raise their family, that’s safe and affordable. So, it’s really been part of the … regional conversation as well as the national conversation,” said Alene Tchourumoff of the Minneapolis Federal Reserve. 

    Over the next decade, the Minneapolis Fed is using multiple data sources to track the economic impact of these changes made as part of the 2040 plan. 

    “We really wanted to have a deeper understanding of what the effects of the policy change would be, recognizing the fact that these important policy changes in housing often take a long time to actually manifest,” said Tchourumoff. 

    There is some promising early data. According to a report by the Pew Charitable Trust, between 2017 and 2022, nearly 21,000 new units were permitted in Minneapolis — most in buildings with 20 or more units. In that same time, rents in the city rose by just 1% — far less than the rest of Minnesota, which saw a 14% rent increase.   

    Deregulation across the country 

    As Minnesota lawmakers consider expanding these rezoning reforms statewide, other states such as California, Oregon, Massachusetts and Montana have already implemented similar YIMBY policies.  

    The changes in Minneapolis are already making a difference for residents like Rebecca Hemmans, who became a first-time homeowner at 67 after viewing nearly 100 listings.   

    “I had this dream about living in a single-family home and sitting on my porch with my table of lemonade and glasses for the neighbors to wave at,” Hemmans said.   

    To accommodate her budget, she chose to adjust her dream — instead of a single-family home, she purchased an attached townhome, and she’s happy with the compromise.  

    “I don’t have to check with the landlord to say, “Hey, can I do this or do that?” she said. “If I want to paint my walls orange, I can do that.”

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  • Metro Detroit leads U.S. in overpriced homes, study finds

    Metro Detroit leads U.S. in overpriced homes, study finds

    Gone are the days when homes in Detroit were absurdly cheap.

    Now, even reasonably priced houses are hard to come by.

    Metro Detroit now has the most overpriced housing market in the U.S., according to researchers at Florida Atlantic University and Florida International University.

    The study shows that 40.8% of homes in the Detroit region are overvalued compared to their long-term pricing trends. The area beat out the Atlanta region for the most overvalued homes.

    Driving up the values, no doubt, is Detroit, once known for having $500 houses, where home values grew by $3.9 billion between 2014 and 2022, according to the University of Michigan’s Poverty Solutions. In fact, housing values in Detroit increased every year since 2017.

    The growth shows that demand for homes is finally rebounding following six straight decades of population losses. And for the first time since the 1950s, the population in Detroit increased, according to U.S. Census estimates released in May.

    In 2014, the year Mayor Mike Duggan took office, residential values were plummeting and had lost an estimated $3 billion in value since 2010. But as the city went through municipal bankruptcy, deep-pocketed investors like Dan Gilbert and the Ilitch family began pumping big money into real estate in downtown, Midtown, Brush Park, Corktown, and the riverfront — areas where home values have risen the most.

    But researchers say Detroit’s home values are bound to decline at some point in the future.

    “Rents are still growing in Detroit, signaling that home prices are likely to continue to grow for the near future,” Ken H. Johnson, a real estate economist in FAU’s College of Business, told the university’s Newsdesk for a summary of the study on Monday “Detroit, however, does not have the same factors of supply and demand as South Florida and other parts of the Sun Belt where the housing market is bolstered by rampant demand from newcomers and population growth to sustain their housing prices. Eventually, prices will return to their long-term trends, but how they get there is the open question – will prices crash as they did after the last housing cycle’s peak or will home prices flatten out and slowly work their way back to the area’s trend? It will be one of the two.”

    While growth near downtown has been robust, many of the city’s neighborhoods are a different story. For example, a disproportionate number of Black residents are living in neighborhoods dominated by blight, abandonment, and crime. The number of middle-class neighborhoods in Detroit shrunk from 22 in 2010 to 11 in 2020, leaving longtime residents with fewer options to find a decent place to live.

    The areas where white people are flocking are getting more expensive, displacing Black businesses and residents.

    click to enlarge

    Steve Neavling

    New condos are a common site in Detroit’s Midtown-Cass Corridor area.

    Over the last decade, the median income of white Detroiters rose 60%. For Black Detroiters, the increase was 8%, according to Detroit Future City, a think tank that develops strategies for a more equitable city.

    As part of a series Metro Times published last year about the growing racial and economic disparities in Detroit, we talked to Black residents who fled the city and asked them why they left. Overwhelmingly, those we spoke to said they couldn’t find decent-paying jobs in the city. By contrast, white newcomers are disproportionately getting employed by high-paying businesses.

    Recognizing the racial and economic gap, Duggan has significantly increased the number of affordable housing options. But it’s nowhere near enough to meet the demand, and many Detroiters are finding it difficult to buy a home in the city.

    Eli Beracha, PhD, director of FIU’s Hollo School of Real Estate, said housing prices are inevitably going to fall. It’s just a matter of when.

    “Housing prices can and will re-stabilize. The only question is how local home prices will return to a given area’s long-term pricing trend,” Beracha said. “Will it be quickly with a precipitous fall in home prices extinguishing all worries of affordability? Or will prices flatten and slowly return to the area’s long-term trend sustaining equity values but creating considerable affordability problems?”

    Steve Neavling

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  • Here are the most and least affordable major cities in the world

    Here are the most and least affordable major cities in the world

    Pittsburgh is well-known for its steel industry and for bringing ketchup to the French fry-loving masses. As it turns out, it is also one the most affordable places in the world, according to a new study

    In a report on international housing affordability by Chapman University and Frontier Centre for Public Policy, a Canadian think tank, Pittsburgh earned the title of most affordable among 94 major metropolitan areas in eight countries. Researchers based their ranking on median home price and median household income data from 2022. 

    Using a metric in the housing sector known as the price-to-income ratio, researchers divided the median home price of a community by the median household income of its residents to determine an affordability score for each city in the study. Cities with scores above 9 are considered “impossibly unaffordable” for residents. Pittsburgh earned a 3.1 score while Rochester and St. Louis both received a 3.4. 

    In cities like Charlotte, North Carolina; Boise, Idaho and Phoenix, home prices spiked dramatically after the pandemic and took months to cool down. But that same trend did not happen in Pittsburgh, Michael Reed real estate agent for Coldwell Banker Realty told CBS MoneyWatch, adding that home prices in the city have remained steady in recent years. 

    Steady home prices, combined with solid incomes in the health care and technology sector, have kept Pittsburgh affordable, Reed said, though prices could eventually rise as aging residents outbid with younger buyers on smaller houses.

    “A lot of our older population is downsizing and that group tends to be cash heavy and they fare better on the market than our younger, newer buyers,” Reed said. “So that could begin pushing our prices up.” 

    The median home sale price in Pittsburgh was $235,000 as of May, down nearly 8% from a year ago, according to online real estate brokerage Redfin.

    Throughout most of the country, the housing market has been tough sledding for both buyers and sellers this year as home prices reach record highs and mortgage rates hover around 7%. The median U.S. home price hit an all-time high last week of $394,000, up 4.4% from a year ago, according to Redfin

    Home prices rising faster than income worldwide

    To be sure, rising home prices are not a uniquely American issue, said Wendell Cox, the study’s author.

    “For decades, home prices generally rose at about the same rate as income, and homeownership became more widespread,” Cox said in the study. “But affordability is disappearing in high-income nations as housing costs now far outpace income growth. The crisis stems principally from land use policies that artificially restrict housing supply, driving up land prices and making homeownership unattainable for many.”

    Despite those issues, the U.S. is home to nine of the 10 most affordable cities in the Chapman study. Conversely, five U.S. cities ranked among the study’s top 10 least affordable cities. Hong Kong is the world’s least affordable city, with a score of 16.7. Sydney, Australia, is a distant second with 13.3, followed by Vancouver with 12.3.


    New data shows home sales fell in April as mortgage rates remained high

    02:59

    Here are the most affordable major cities in the world, according to the Chapman study:

     1. Pittsburgh (U.S.)
     2. Rochester, New York (U.S.)
     3. St. Louis (U.S.)
     4. Cleveland (U.S.)
     5. Edmonton, Alberta (Canada)
     6. Buffalo, New York (U.S.)
     7. Detroit (U.S.)
     8. Oklahoma City (U.S.)
     9. Cincinnati (U.S.)
    10. Louisville, Kentucky (U.S.)

    Here are the least affordable major cities in the world, according to the Chapman study:

      1. Hong Kong (China)
      2. Sydney, New South Wales (Australia)
      3. Vancouver, British Columbia (Canada)
      4. San Jose, California (U.S.) 
      5. Los Angeles (U.S.)
      6. Honolulu (U.S.)
      7. Melbourne, Victoria (Australia)
      8. San Francisco (U.S.)
      9. Adelaide, South Australia (Australia)
    10. San Diego (U.S.)

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  • Your home sale could trigger capital gains taxes. Here’s how to calculate your bill

    Your home sale could trigger capital gains taxes. Here’s how to calculate your bill

    Westend61 | Westend61 | Getty Images

    As home values climb, more Americans owe capital gains taxes when selling property. But knowing how to calculate your home’s profit could reduce your bill, experts say.

    Most Americans do not owe taxes for selling a primary residence because of a special tax break — known as the Section 121 exclusion — that shields up to $250,000 of profits for single filers and $500,000 for married couples filing together.

    However, more U.S. home sales profits now exceed these thresholds, according to an April report from real estate data firm CoreLogic. Nearly 8% of sales exceeded the $500,000 limit in 2023, up from roughly 3% in 2019, the report found.

    More from Personal Finance:
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    Inflation is slowing. Here’s why prices still aren’t going down
    Fewer homeowners are remodeling, but demand is still ‘solid’

    There are strict IRS rules to qualify for the $250,000 or $500,000 exemptions. Any profit above those limits is subject to capital gains taxes, levied at 0%, 15% or 20%, based on your earnings.

    Capital gains brackets use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

    Reduce capital gains by increasing ‘basis’

    “It is important to track your cost basis of the home,” which is your original purchase price plus closing costs from the purchase, according to Thomas Scanlon, a certified financial planner at Raymond James in Manchester, Connecticut.

    You can reduce your home sale profit by adding often-forgotten costs and fees to your basis, which minimizes your capital gains tax liability.

    For example, you can start by tacking on fees and closing costs from the purchase and sale of the home, according to the IRS. These may include:

    • Title fees
    • Charges for utility installation
    • Legal and recording fees
    • Surveys
    • Transfer taxes
    • Title insurance
    • Balances owed by the seller

    These could be small amounts individually but have a significant effect on the basis when tallied.

    The average closing cost nationwide is $4,243, according to a report from Assurance, but fees vary widely. In the priciest state, New York, the average is $8,039, while California is a close second at $8,028.

    “You also get credit for the expenses for the sale of the property,” added Scanlon, who is also a certified public accountant. That includes your real estate commissions and closing costs.

    However, there are some fees and closing costs you cannot add to your basis, such as home insurance premiums or rent or utilities paid before your closing date, according to the IRS.

    Similarly, loan charges such as points, mortgage insurance premiums, the cost to pull your credit report or appraisals required by your lender will not count.

    The ‘best way’ to reduce capital gains taxes

    You can further increase your home’s basis by tacking on the cost of eligible upgrades, experts say.

    “The best way to minimize the tax owed from selling a house is to maintain an accurate record of home improvements,” said CFP and enrolled agent Paul Fenner, founder and president of Tamma Capital in Commerce Township, Michigan.

    An improvement must “add to the value of your home, prolong its useful life or adopt it to new uses,” according to the IRS.

    For example, you can increase your basis with additions, outdoor or exterior upgrades, adding new systems, plumbing or built-in appliances.

    However, you cannot tack on repairs or maintenance needed to “keep your home in good condition,” such as fixing leaks, holes or cracks or replacing broken hardware, according to the IRS.

    Of course, you will need documentation for any improvements used to increase your home’s basis in case of a future IRS audit.

    If you do not have receipts, “at the very least, take pictures,” and gather any permits pulled for home projects, Scanlon from Raymond James said.

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  • Marine moved from the U.S. to Brussels with her family—our mortgage is under $3,000/month: Take a look inside

    Marine moved from the U.S. to Brussels with her family—our mortgage is under $3,000/month: Take a look inside

    My husband Martin and I met in Brussels in 2012, when I literally stepped on his toes at my neighborhood farmer’s market. At the time, I was working as a security manager at NATO headquarters, and he was on a business trip from his home in the Netherlands. 

    Three days later, we went on our first date. Five weeks later, I moved to Washington, D.C., to take a post at the Pentagon. Almost a year and a half later, we decided we’d get married and he’d join me in D.C. 

    As a Marine Corps reserve officer, I took advantage of my VA loan benefits, and we bought a small home in 2014. We brought our newborn daughter home there in 2016.

    But we always knew we wanted to move back to Europe eventually. 

    Finding ‘the one’ in Brussels

    Jessica calls Martin her “90-day fiancé.”

    Courtesy of Jessica van Dop DeJesus

    We sold our D.C. home for $899,000 in 2021 — a 67.7% increase compared to what we’d paid for it. And after a year renting in Brussels, we started looking for a place to buy. Our two main requirements: It had to be walking distance to our daughter’s school and have an outdoor space big enough to eat outside. 

    Six months and 20 apartments into our search, we finally found “the one” in Saint Gilles, the neighborhood south of the city center where I’d lived before.

    I fell in love with the 14-foot ceilings, the Art Nouveau buildings, and the great parks nearby.

    One of Jessica’s favorite things to do in Brussels is go to the markets. There are cafés nearby where she likes to order a coffee or, “if I’m feeling a bit festive,” a glass of wine.

    Federico Campanale

    We offered 547,500 euro, or $586,767, for the apartment in Brussels, leveraging the cash we had from the sale of our D.C. home to put down a 10% down payment of $58,677 and securing a 20-year mortgage with a 3.59% interest rate.

    Take a look inside our apartment

    We live in a street-level duplex in a building with only three apartments. It’s slightly smaller than our D.C. home, but it’s been worth it. Our neighborhood is equivalent to Logan Circle in Washington, D.C., where a place like ours could easily cost double or more. We’ve been able to add our own touches. 

    The front door leads into our dining room — one of my favorite parts of the apartment because of its high ceilings and large space for our long dining table, where we host many dinner parties. 

    Jessica is a food and travel content creator, and cooks pretty much every day. She loves that she and her family can host dinner parties in the dining room.

    Federico Campanale

    Next to the dining room is our living room, where I made a “fitness nook” with my stationary bike and weights so I can work out while watching TV. 

    We added an American-style stove and oven that fits my Thanksgiving turkey, as well as a wine fridge to our galley kitchen. We put in terrazzo floors as an homage to my childhood home in Puerto Rico. 

    “In Europe usually ovens are very tiny, but not the case with me because I love a big Thanksgiving turkey,” Jessica says.

    Federico Campanale

    Toward the back of the first floor, a small room doubles as an office and a sitting room. Large sliding doors lead to our two-level terrace, one with a large table we use in the warmer months.

    Jessica and her family like to eat outside on the terrace in the warmer months. Above and beyond the patio, she says, “we have a beautiful view of the city hall.”

    Federico Campanale

    The bedrooms, laundry room, storage, and bathroom are on the bottom floor.

    Lack of closets and storage space is common in European apartments. Fortunately, the former owners made a storage system under the stairs, which we use for extra clothes, household items, wines, and photography equipment. 

    “My daughter’s room still has the home’s original tile, which we love,” Jessica says.

    Federico Campanale

    We have an average-sized bedroom with a walk-in closet and a small guest bedroom with a full-sized bed. 

    Our bathroom is big for European standards with a shower and tub, and we plan to renovate it in 2025.  

    The bedroom is “very basic,” Jessica says.

    Federico Campanale

    Currently, our monthly housing costs in Brussels include our mortgage ($2,931) and condo fee ($65) as well as utilities such as electricity ($73), gas ($70), water (about $50), and internet and cable ($68). 

    Our life in Brussels

    I miss being within driving distance of my family in Western New York. The main sacrifice of this move is being so far from people I’m close to. But we’re happy to be in Brussels. 

    Our neighborhood, Saint Gilles, has always been one of my favorite parts of the city, filled with Portuguese, Brazilian, Eastern European, Italian, Latin American, and North African restaurants and shops. We even had a Latino-themed Christmas market with Colombian food stands and live salsa music sponsored by the town hall last year! 

    Our daughter, now seven, is a half-Dutch, half-Puerto Rican, third-culture kid, so we wanted her to grow up in a diverse community.

    Jessica’s seven-year-old daughter already speaks English, Dutch, and Spanish, and will start learning French at school next year, too.

    Federico Campanale

    Belgium shares borders with four countries: the Netherlands, Germany, Luxembourg, and France. This close proximity makes it easy to take a quick weekend trip to explore even more places and cultures.

    I can’t say leaving the U.S. for Europe meant the end of all our problems. But I feel more content and at ease here. I don’t worry as much about school shootings, for example, or the potential loss of employer-sponsored healthcare. We can afford to live, get childcare for our daughter, eat and cook like the foodie I am, and travel regularly. 

    And we can embrace a slower pace of life and a culture that prizes friends and vacations at least as much as work. 

    Jessica van Dop DeJesus is a freelance journalist, a digital media strategist, and the founder of The Dining Traveler, a multimedia digital platform covering food and travel. Jessica was raised in Puerto Rico and began traveling as a young Marine over 25 years ago. She currently serves as the Latinx facilitator for the Breaking Barriers in Entrepreneurship program for Bunker Labs, providing mentorship to aspiring veteran entrepreneurs. Follow her on Instagram, Facebook, Twitter, Pinterest, and YouTube.

    Want to make extra money outside of your day job? Sign up for CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories. CNBC Make It readers can use special discount code CNBC40 to get 40% off through 8/15/24.

    Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.

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  • Joshua Tree’s Housing Boom Is Busted

    Joshua Tree’s Housing Boom Is Busted

    Joshua Tree’s housing market during its pandemic surge looked like an investment oasis, but instead it may have been a mirage.

    The market in the California desert has dried up after exploding four years ago, the Wall Street Journal reported. Those who bought homes in recent years — which are typically modest, despite some architectural marvels — are facing a difficult dilemma if they choose to sell.

    Joshua Tree home values jumped significantly during peak Covid. In July 2020, the typical value in the area was $217,007, according to the Zillow Home Value Index. Two years later, that number had more than doubled to $467,348. But as of February this year, the typical home value fell to $385,941.

    Approximately 40 percent of the market’s 199 listed homes have seen price reductions, Bryan Wynwood, a local agent told WSJ. Buyers are also grappling with increased interest and mortgage rates from the height of the pandemic, which is having an impact on markets across the nation.

    Wynwood did, however, admit that the price boom was unsustainable. 

    During the height of the pandemic, homes were often sold in under two weeks. But in February, those that did sell were on the market for a median of 106 days, according to Redfin.

    One factor impacting Joshua Tree’s housing market is its popularity as a tourist destination. In 2021, more than 3 million people visited the area, according to the National Park Service. The trickle effect has increased demand — and supply — of short-term rentals, which have nearly doubled in four years, upping competition and dragging down long-term rents.

    Investors who bet on long-term rentals are not making as much money as expected, so buyers are thinking twice about the potential payoff they can deliver in the future. According to one source WSJ spoke with, sales may instead be driven by investors looking at short-term rental assets.

    Holden Walter-Warner

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  • What a $418 million settlement on home-sale commissions may mean for you

    What a $418 million settlement on home-sale commissions may mean for you

    A landmark class-action lawsuit may change the way Americans buy and sell homes.

    The National Association of Realtors agreed to a $418 million settlement last week in an antitrust lawsuit where a federal jury found the organization and several large real-estate brokerages had conspired to artificially inflate agent commissions on the sale and purchase of real estate. 

    The NAR’s multiple listing service, or MLS, used at a local level across areas in the U.S., facilitated the compensation rates for both a buyer’s and seller’s agents.

    At the time of listing a property, the home seller negotiated with the listing agent what the compensation would be for a buyer’s agent, which appeared on the MLS. However, if a seller was unaware they could negotiate, they were typically locked into paying the listed brokerage fee.

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    The proposed settlement would have the commission offer completely removed from the NAR’s system and home sellers will no longer be responsible for paying or offering commission for both the buyer and seller agents, said real estate attorney Claudia Cobreiro, the founder of Cobreiro Law in Coral Gables, Florida.

    “The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation,” the NAR wrote in a press release.

    “Commissions remain negotiable, as they have been,” the organization wrote.

    However, some of these changes may take time to materialize, experts say.

    Settlement process ‘can take some time’

    If a settlement agreement is accepted within a lawsuit between two people, the court generally won’t look at the settlement. Yet, in a federal class-action lawsuit, one that affects a large number of people, there will be a period for the court and interested parties to review the settlement and offer commentary and feedback on the agreement, Cobreiro said.

    “That’s the process that we’re about to enter, and that process can take some time,” she said.

    As proposed, the settlement would have the NAR completely remove commissions from its MLS system by July. That may be optimistic, Cobriero said.

    “It would be more realistic to see this being implemented later this year,” she said.

    Redfin CEO on NAR settlement: People should have a voice in how much a real estate agent gets paid

    In the meantime, it’s “business as usual” for buyers and sellers, Cobreiro said. “There is nothing that agents should be doing differently currently in their ongoing transactions.”

    A buyer or seller already in the market is probably not going to be affected by the settlement unless their property happens to be on the market a little longer than what’s customary, she said.

    “The big gray area here is how will buyer [agent] commissions be handled moving forward,” said Cobreiro, as there is no finalized agreement yet that clearly indicates how that will be handled.

    What the settlement could mean for homebuyers

    The settlement agreement doesn’t say that the buyer’s agent will not be paid nor that the buyer’s agent cannot charge fees.

    “The big question here is who is going to pay for those services moving forward. Will it ultimately be a buyer that will have to get the buyer’s agent’s commission together, on top of closing costs and on top of down payment?” Cobreiro said.

    While commission fees are negotiable between involved parties, knowing what cards you have on the table as a homebuyer will be more important now than before. Using an agent will still be a smart way to achieve that, experts say.

    “A great local agent can give you a competitive advantage,” said Amanda Pendleton, a home trends expert at Zillow Group. That’s especially true as low-priced starter homes are expected to remain in demand, she said.

    Here are two things to know about how the settlement could change the process of buying a home:

    1. Buyers could be responsible for their agent fees: Historically, real estate commissions typically come out of the seller’s pocket, and are split between the buyer’s and seller’s agents.

    As a result of the settlement, the seller will no longer be responsible for commission fees for a buyer’s agent. So this is a new potential charge buyers need to consider in their budget. Historically, if a buyer’s agent got half of a 5% or 6% commission, that equaled thousands of dollars.

    For example: The median home sale price by the end of 2023 was $417,700, according to the Federal Reserve. That would mean commissions at a 5.37% rate — the 2023 average rate, according to Lending Tree — amount to roughly $22,430, about $11,215 of which might go to the buyer’s agent.

    But bypassing an agent’s services may not lead to direct savings, especially for first-time buyers, experts say. You could put yourself at risk by leaving the homebuying process entirely to the seller and their agent, said Cobreiro.

    Sometimes things show up in your home inspection report that merit a credit from the seller, but if you don’t have an agent, the seller’s agent may not volunteer that, said Cobreiro.

    Doing so would be a breach of their fiduciary duty to the seller, and it affects their commission if the price of the property declines, she said.

    “Signing the contract is the least of it; there’s so many things that happen throughout the transaction that really require the expertise and the navigation by someone who understands the process,” she said.

    2. Buyers may be required to sign a contract early on: If buyers become responsible for their agent’s commission, you’re likely to see more agents asking buyers to sign a buyer-broker agreement upfront, before the agent starts helping them find a property.

    Most brokerages have a buyer agency agreement, but it’s common for real estate agents to wait to present the contract.

    “They want to win the person’s business, they don’t want to scare them with having to sign any contracts,” said Steven Nicastro, a former real estate agent who writes for Clever Real Estate.

    Moving the contract talks to earlier in the process is a precaution to protect buyer’s agents in the market.

    “That could lead to negotiations actually taking place at the first meeting between a buyer and the buyer’s agent,” Nicastro said.

    Know you can negotiate the commission rate as well as the duration of the contract, which can span from three months to a year, Cobreiro said.

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  • Biden proposes $10,000 tax breaks for first-time homebuyers, ‘starter home’ sellers

    Biden proposes $10,000 tax breaks for first-time homebuyers, ‘starter home’ sellers

    Cavan Images | Cavan | Getty Images

    President Joe Biden has floated plans to address the country’s affordable housing issues, including new tax breaks for first-time homebuyers and “starter home” sellers. However, experts have mixed opinions on the proposals.

    “I know the cost of housing is so important to you,” Biden said during his State of the Union speech Thursday night.

    “If inflation keeps coming down, mortgage rates will come down as well. But I’m not waiting,” he said.

    More from Smart Tax Planning:

    Here’s a look at more tax-planning news.

    How the homebuyer, ‘starter home’ sale credit works

    Biden has proposed a “mortgage relief credit” of $5,000 per year for two years for middle-class, first-time homebuyers, which would be equivalent to lowering the mortgage interest rate for a median-price home by 1.5 percentage points for two years, according to an outline released by the White House on Thursday.

    The administration is also calling for a one-year credit of up to $10,000 for middle-class families who sell their “starter homes” to another owner-occupant. They define starter homes as properties below the median price for the seller’s county.

    U.S. President Joe Biden delivers the State of the Union address in the House Chamber of the U.S. Capitol in Washington, D.C., on March 7, 2024.

    Pool | Getty Images News | Getty Images

    “Many homeowners have lower rates on their mortgages than current rates,” the White House said. “This ‘lock-in’ effect makes homeowners more reluctant to sell and give up that low rate, even in circumstances where their current homes no longer fit their household needs.”

    However, it’s difficult to predict whether Biden’s proposal will progress during a presidential election year, especially with a split Congress, experts say.

    Interest rates still near ‘multidecade highs’

    With soaring home prices and mortgage interest rates, 2023 was the least affordable year for homebuyers in more than a decade, according to a report from Redfin.

    In 2023, those making the median U.S. income of $78,642 would have spent 41.4% of earnings by purchasing a median-price home at $408,806, up from 38.7% in 2022, the report found.

    While rates have fallen from 2023 peaks, the average interest rate for 30-year fixed-rate mortgages was still hovering around 7%, as of March 7.

    “We’re close to multidecade highs for mortgage rates,” said Keith Gumbinger, vice president of mortgage website HSH.

    “Unless [Biden’s proposed credit] counts as qualifiable income, it’s not going to actually make it easier for homebuyers to qualify for mortgages,” he said.

    There’s a ‘housing supply crisis’

    Of course, higher mortgage interest rates are only one piece of the country’s affordable housing puzzle.

    “The housing supply crisis has been building, really, since the Great Recession,” said Janneke Ratcliffe, vice president for housing finance policy and leader of the Housing Finance Policy Center at the Urban Institute.

    The housing supply crisis has been building, really, since the Great Recession.

    Janneke Ratcliffe

    Vice president for housing finance policy at the Urban Institute

    Since the economic crisis, there has been a “perfect storm” of issues for the country’s housing supply, including declines in new home construction, she said.

    “What we don’t need today in the market is more demand,” said Gumbinger. “We have plenty of demand, but we don’t have adequate supply.”

    Still, Ratcliffe said she was pleased to see housing affordability highlighted during the State of the Union speech. “I think this is a great starting point,” she said.

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  • Southern California Home Sales Rise After Two-Year Slump

    Southern California Home Sales Rise After Two-Year Slump

    Southern California has slammed the brakes on falling home sales.

    After 25 straight months of declining year-over-year sales, home sales rose 7 percent in January to 10,581 deals, the Orange County Register reported, citing figures from CoreLogic.

    The volume of January sales still ranked as the third-lowest in records dating back 36 years.

    Home prices, meanwhile, continued to climb during a severe shortage of homes on the market, CoreLogic reported.

    The median price of a Southern California home was $705,000 in January, up by more than 5 percent from the year before.

    Despite the gain, January’s median was down from the previous nine months. The month is typically the slowest of the year, reflecting deals signed during the holiday season when buyers and sellers generally take a break.

    January’s median was $45,000 below the all-time high of $750,000 reached in April 2022, right before climbing mortgage rates combined with high prices to slow buyer demand.

    Both prices and sales were up year-over-year in all six Southern California counties.

    Orange County had the biggest gain in both prices and sales, with the median up 12 percent to nearly $1.07 million. Sales increased 13 percent year-over-year.

    Los Angeles County had the smallest price gain percentage-wise, with the median rising 4.6 percent to $800,000.

    The Inland Empire continued to have the best housing bargains, with a median price of $475,000 in San Bernardino County and $550,000 in Riverside County. But their annual price growth was 5.6 percent in San Bernardino County and 2.1 percent in Riverside County.

    A lack of homes for sale continued to prop up prices, according to the Register.

    The Southland averaged fewer than 39,000 homes for sale in November and December, when most of January’s transactions went under contract, according to Redfin.

    The region had 37,594 active listings in January, down 8 percent from the previous year and 39 percent below the average for the previous 11 years. All six Southern California counties saw declines in real estate listings.

    High mortgage rates continued to dampen both sales and listings.

    Interest rates for a 30-year, fixed-rate mortgage averaged 7.4 percent in November and 6.8 percent in December, according to Freddie Mac.

    The typical monthly payment for a Southern California home was nearly $3,800 in December, not counting taxes, insurance and the HOA, or homeowner association fees. In addition to dampening demand, higher rates discouraged homeowners from giving up their low mortgage rates by selling their house.

    — Dana Bartholomew

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    TRD Staff

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  • Home prices, mortgage rates remain high as inflation cools

    Home prices, mortgage rates remain high as inflation cools

    Home prices, mortgage rates remain high as inflation cools – CBS News


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    While inflation has shown signs of cooling, mortgage rates and home prices are still stubbornly high, making it challenging for many Americans to buy homes. Elise Preston reports.

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