Author Archives: ipgocorp

Tax Reform Could Significantly Affect LIHTC Equity Market

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(RECAP: The election has increased the likelihood of substantial tax reform being enacted in the coming years. This has renewed concerns about the potential effects—intended and unintended—of that reform on the low-income housing tax credit (LIHTC). Simply place, if current efforts to enact corporate tax reform are successful, the resulting changes to the tax code will affect the amount of LIHTC equity that can be raised and in turn the number of affordable rental apartments that can be built or preserved. It’s vital to note that the overall effects of tax reform could be net positive or net negative, depending on the totality of the impact of the various changes.)

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No, the Future of Fannie and Freddie Is Not a 'Sideshow'

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(RECAP: Despite the fact, documented by the Congressional Budget Office, that Fannie and Freddie have contributed $63 billion to taxpayers (on top of repaying their 2008 advance), the sweep agreement not only takes away 100% of their net profits every quarter — but takes away a part of their remaining capital each year, reaching zero net worth in January 2018. Claims that the GSE’s lack of real capital is a “sideshow,” that a line of credit is just as excellent as real capital, — and that this does not have consequences — is directly rebutted by the GSEs’ regulator, the FHFA. In a February 2016 speech, FHFA Director Mel Watt said that the GSEs’ lack of capital is their “most serious risk.” He warned of real world consequences of a Treasury Department draw, including harm to investor confidence in the GSEs’ mortgage-backed securities and “a legislative response adopted in haste or without the kind of forethought it should be given.” This is not a sideshow. It is the main event.)

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Over 80 Percent of Largest U.S. Housing Markets Improving According to Freddie Mac Market Report

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MCLEAN, VA – Freddie Mac released its Multi-Indicator Market Index showing the majority of the top 100 housing markets across the country steadily improving, with one additional state, Georgia, entering its outer historic benchmark range of housing activity.

The national MiMi value stands at 86.4, indicating a housing market that’s on the outer edge of its historic benchmark range of housing activity with a +0.42 percent improvement from September to October and a three-month improvement of +1.86 percent. On a year-over-year basis, the national MiMi value improved +5.88 percent. Since its all-time low in October 2010, the national MiMi has rebounded 46 percent, but remains significantly off its high of 121.7. 

Forty-one of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with Colorado (98.6), Utah (101.5), Hawaii (98), Idaho (97.2) and Oregon at (96.8) ranking in the top five with scores closest to their historical benchmark index levels of 100.

Seventy-seven of the 100 metro areas have MiMi values within range of their benchmark averages, with Dallas, TX (100.2), Nashville, TN (100.5), Honolulu, HI (100.8), Ogden, UT (100.8), and Los Angeles (99.1), ranking in the top five with scores closest to their historical benchmark index levels of 100.

The most improving states month over month were Nevada (+1.96%), Connecticut (+1.45%), Arizona (+1.40%), South Carolina (+1.33%) and Washington (+1.31%). On a year-over-year basis, the most improving states were Nevada (+12.87%), Massachusetts (+12.77%), Florida (+11.65%), Mississippi (+11.53%) and Arizona (+10.28%).

The most improving metro areas month over month were Springfield, MA (+1.96%), Tucson, AZ (+1.87%), Las Vegas, NV (+1.77%), Ogden, UT (+1.51%) and Worcester, MA (+1.48%). On a year-over-year basis, the most improving metro areas were Orlando, FL (+17.45%), Worcester, MA (+16.02%), Chattanooga, TN (+14.78%), Dallas, TX (+14.51%) and Tampa, FL (+14.45%).

In October, 43 of the 50 states and 82 of the top 100 metros were showing an improving three-month trend. The same time last year, 30 states and 69 of the top 100 metro areas were showing an improving three-month trend.

Len Kiefer, Deputy Chief Economist of Freddie Mac stated, ”The National MiMi stands at 86.4, a 5.88 percent year-over-year increase, but still below its historic benchmark normalized to 100. The buy applications indicator is up nearly 20 percent from last year and is reflected in the recent better-than-expected existing and new home sales buy data. MiMi does not yet capture the recent jump in mortgage rates since the election, which will drive down homebuyer affordability and likely dampen demand for home sales next year in some markets. While we see strong house price growth in markets like Dallas, Houston, Orlando, Phoenix and others, most are still well below their pre-2008 peak and still have significant room for improvement.”

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