January 24, 2013
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Data show a surge in U.S. home prices last year
House prices in the U.S. climbed almost as much in 2012 as they did at the peak of the housing bubble and are set to keep increasing at a slightly slower pace this year, according to Zillow. Prices gained 5.9% compared with 2011 and are forecast to rise an additional 3.3% this year, the firm said.  MarketWatch (1/22), USA Today (1/22), Banker & Tradesman (Boston) (1/22)
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Housing starts reach highest level since 2008
Housing starts in the U.S. increased 12.1% last month compared with November, reaching a seasonally adjusted annual rate of 954,000, the Commerce Department says. In 2012, construction began on about 780,000 units, a 28.1% increase from 2011.  RTT News (1/17)
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2012 housing forecasts solidly underestimated recovery
A look back at last year's forecasts for housing recovery reveals that none of the experts that Zillow and Pulsenomics surveyed anticipated just how strongly the market would rebound. Although final year-end data won't be out for several weeks, even the most bullish forecast was modest compared with gains posted late in 2012. Forecasts for 2013 are more positive, though a few analysts see headwinds this year that could reverse 2012 gains.  The Wall Street Journal/Developments blog (1/22)
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Trends in Housing
Rental-home investors chase the hot markets
Institutional investors have been snapping up distressed homes with plans to rent them and realize gains on appreciation. As more investors flood certain markets, however, bidding wars are driving up prices, and the investment is often not worth the return. Phoenix, one of the first hot markets, has seen a significant decline in investor purchases as buyers move to other markets, such as Tampa, Fla., and Atlanta.  USA Today (1/22)
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Report: Housing has become a greater financial burden for boomers
Census Bureau data indicate that middle-income households age 50 or older in 2009 spent a larger percentage of their incomes on mortgages than a decade earlier, according to an AARP analysis. Twenty-nine percent of these families spent 30% or more of their income on housing, up from 20% who spent that much in 2000.  AARP.org (1/22)
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Policy Roundup
CFPB issues requirements
for mortgage servicing

The Consumer Financial Protection Bureau has released mortgage-servicing rules that are set to go into effect early next year. Director Richard Cordray says the goal is to repair a "broken system." For example, the rules govern when a mortgage servicer can foreclose. They also require servicers to notify borrowers when interest rates change.  AmericanBanker.com (free registration) (1/17), Bloomberg Businessweek (1/17), MarketWatch (1/17)
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Agency revamps loan-officer compensation rules
Under a new rule from the Consumer Financial Protection Bureau, loan officers can no longer receive higher compensation when steering borrowers to loans with higher interest rates, prepayment penalties or higher fees. The rule also forbids loan officers from getting paid by both the consumer and another company.  Bloomberg (1/18)
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Freddie Mac to speed short sales
The government-sponsored entity Freddie Mac is taking steps to cut the time needed to complete a short sale, in an effort to encourage more short sales versus foreclosures. "We estimate that the time to complete a short sale will decrease by approximately 50% to 75%" as a result of the changes, Freddie Mac executive Tracy Mooney wrote in a blog post.  Housing Wire/ReWired blog (1/22)
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Location, Location, Location
Tiny-apartment contest envisions future of NYC living
A competition in New York City pitted architects and designers against one another to envision and create livable apartments that are about the size of a hotel room, or 250 to 370 square feet. Mayor Michael Bloomberg says the city is facing a housing shortfall of 800,000 studio and one-bedroom apartments, and that the tiny units will be needed in any city with young people. The winning design will come to life as a 10-story apartment tower, built on city-owned land using modular construction.  The New York Times (tiered subscription model)/City Room blog (1/22)
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Project in Boston's Chinatown highlights challenges in affordable housing
The $35 million redevelopment of Hong Lok House in Boston's Chinatown will provide apartments for low-income elderly residents for about $500 a month. This is a feat, experts say, both because the area is a magnet for luxury homes and because federal financing for affordable housing had declined dramatically in recent years, leaving developers to cobble together private loans and grants.  The Boston Globe (tiered subscription model) (1/23)
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Environment and Housing
Baltimore grant connects scattered energy-efficiency efforts
Baltimore is using a $52.9 million award for energy innovation to consolidate a hodgepodge of programs and grants into a robust new effort that is expected to alter the city's power usage, offer funding for weatherization and other home improvements, and promote financial literacy.  The Baltimore Sun (1/22)
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The Economy and Housing
Housing inventory continues its slide
The inventory of homes on the market has been dropping as sales continue their upward trend. At the end of 2012, the U.S. had 21.6% fewer homes for sale than a year earlier, the National Association of Realtors reported. Reasons for the shrinking inventory include homeowners' lack of equity, a slowing pace of bank foreclosures and fewer new homes under construction.  The Wall Street Journal/Developments blog (1/22)
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Housing Matters Spotlight
CBPP recommends renters' credit to balance housing policy
The Center on Budget and Policy Priorities, a John D. and Catherine T. MacArthur Foundation grantee, proposes a renters' tax credit to improve the effectiveness and equity of the nation's housing expenditures. Currently, federal spending on housing favors homeownership over renting and targets a larger share of subsidies toward higher-income households. The Center recommends the renters' tax credit as a step toward a more balanced housing policy. Capped at $5 billion, it would assist 1.2 million of the lowest-income renters and lift 250,000 families out of poverty. Read a fact sheet on key features of the Center's proposal.
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About How Housing Matters
The How Housing Matters research initiative seeks to explore whether, and if so how, having a decent, stable, affordable home leads to strong families and vibrant communities. Research is showing that stable, quality housing has value beyond the provision of shelter; it improves school performance, diminishes health problems for children and adults, and decreases psychological stress. By illuminating the ways in which housing matters and highlighting innovative practices in the field, we hope to encourage collaboration among leaders and policymakers in housing, education, health, and economic development to help families lead healthy, successful lives. How Housing Matters is an initiative of the John D. and Catherine T. MacArthur Foundation.
Learn more about The MacArthur Foundation ->How Housing Matters | The MacArthur Foundation
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