In the first quarter of 2024, home prices increased in 93% of U.S. metro areas, with significant growth observed in 30% of these markets. The national median price for single-family homes rose to $389,400, marking a 5% year-over-year increase. The South led in sales volume, while the Northeast saw the highest price appreciation. Despite high mortgage rates, market conditions improved slightly for buyers due to a marginal decline in required mortgage payments compared to the previous quarter.

After Kathy Hochul's failed New York Housing Compact plan last year, New York State is trying again to tackle its severe housing crisis. According to anonymous sources close to the deal, New York state leaders have reportedly reached a tentative agreement on a legislative plan to tackle the crisis and will be presented to the full Senate and Assembly on Monday. The framework of the deal offers incentives for both developers and tenants. Developers would receive significant tax breaks to develop more affordable units, while tenants would benefit from enhanced protections against eviction in certain cases. Additionally, the agreement would allow landlords of rent-stabilized apartments to raise rents for renovation costs and eliminate size restrictions on new Manhattan apartment buildings, fulfilling long-standing desires of city officials.

The housing market for buyers in California is becoming increasingly challenging. Prices are soaring while the inventory remains limited. Statistics reveal a stark reality: home prices have surged 9.7% over the past year, with the median home price now at $813,980. Meanwhile, inventory levels have plummeted by 48.3%, exacerbating the affordability crisis. Despite historically low mortgage rates, competition remains fierce, leading to bidding wars and further price escalation. Experts suggest that while the market may stabilize in the long term, immediate relief for buyers appears unlikely.

Currently, the average rate for a 30-year mortgage stands at around 6.9%, a significant decrease from late October when it peaked at nearly 8%. Despite expectations of rates declining later in the year, some buyers are opting to act now due to fears of increased competition. The combination of high mortgage rates and soaring home prices has made affordability a major concern, with many households earning less than what's needed to afford a median-priced home. While economists anticipate mortgage rates easing, uncertainty remains.

There are ongoing bipartisan efforts at various levels of government to address housing supply and pricing challenges in the United States. The importance of local action in addressing these issues, particularly through measures such as accessory dwelling units (ADUs), changes in zoning rules, and reduction of lot sizes, is increasingly becoming evident. Despite political differences, lawmakers in some states are collaborating on bipartisan housing legislation. However, challenges such as NIMBYism hinder progress at the local level, prompting calls for state-level intervention to overcome resistance to housing reforms. 

Los Angeles Mayor Karen Bass took office in 2022 and since then, has been making a big push to address homelessness, particularly in Venice Beach. Mayor Bass initiated the Inside Safe program to provide motel rooms for homeless residents, resulting in cleaner sidewalks and parks in Venice Beach. However, challenges persist, including budgetary constraints and the need for permanent housing solutions. Critics accuse Bass of prioritizing aesthetics over long-term solutions, while supporters applaud her urgency in tackling the crisis. Despite progress, concerns remain about the sustainability and effectiveness of current efforts, highlighting the complex nature of addressing homelessness in Los Angeles.

According to a recent market study report by Arizent, where the company surveyed professionals across different financial segments such as banking, insurance, mortgage, technology etc, there is a range of different opinions about AI. Most respondents have concerns over job displacement and ethical considerations persist, especially regarding generative AI's accuracy and fairness. The general attitude among mortgage professionals is to be hyper cautious towards adopting generative AI, and they citied uncertainty and budget constraints as top considerations. Some of the main concerns of industry professionals regarding the adoption of AI includes loss of personalized customer interactions and job security. Despite apprehensions, there's acknowledgment of AI's potential to enhance efficiency and job performance, with expectations of AI handling a significant portion of tasks within the next five years. While efficiency gains are anticipated across various industries, banking professionals foresee AI primarily bolstering fraud protection.

In California, state and local governments have allocated substantial funds for affordable housing initiatives. Despite widespread acknowledgment of the need for affordable housing, publicly funded initiatives face challenges such as labor agreements and bureaucratic processes, which can inflate costs and slow down construction. Many private firms are moving away from a reliance on government funds, which according to them, drives up development cost owing to the red tape. Instead, these firms are exploring alternative financing models. 

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For example, SDS Capital Group is raising an impact fund from private investors, to build a 49-unit low-income housing project in South Los Angeles. While privately financed projects may still rely on government support for operation, recent regulatory changes have facilitated approvals and increased profitability for such developments. Concerns linger regarding the long-term maintenance and sustainability of privately funded housing projects, particularly regarding the welfare of residents and the availability of federal funding for rental assistance programs. Nevertheless, advocates see potential in private-equity models to drive down construction costs and inspire government reform in affordable housing initiatives.

During the recent legislative session, House Bill 2474, aimed at holding Washington cities accountable for building affordable housing and shelters, gained momentum before dying at the Senate. Championed by Rep. Strom Peterson, the bill was prompted by instances like Kenmore's rejection of a 100-unit affordable housing project, drawing criticism from Governor Inslee for obstructing solutions to homelessness. Evolving over the session, the bill proposed fiscal penalties for non-compliant cities, emphasizing mediation between cities and housing developers before enforcement. Despite setbacks, advocates like Michele Thomas stressed the urgency of addressing homelessness, a critical issue highlighted by over 28,000 homeless individuals counted in Washington during the 2023 Point-in-Time count. With hopes for its return next year, the bill reflects a statewide imperative to bridge the gap in housing needs, projected to exceed 500,000 units for low-income earners over the next two decades.

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Photo by Zhifei Zhou on Unsplash

There has been an emergence in partnerships between healthcare systems and affordable housing developers, such as the H3C project in New Orleans, aiming to integrate stable housing with better health outcomes. Supported by investments from entities like Aetna and Kaiser Permanente, these initiatives reflect a growing recognition among health organizations of the benefits of addressing housing insecurity. While healthcare systems are not acting as banks, they are bridging gaps in funding for affordable housing, leveraging resources to meet community needs and their own nonprofit requirements. Such collaborations extend beyond traditional housing projects to include specialized care facilities and initiatives targeting populations with the greatest needs. Additionally, healthcare systems are exploring innovative approaches, including utilizing their land assets and collecting data to inform future partnerships and interventions aimed at addressing health and housing disparities.

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Leaders in New York’s State Senate are set to propose sweeping legislation to counter the growing housing crisis in the state of New York. The proposed legislation by leaders in New York’s State Senate aims to address the housing crisis through several key points:

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• Creation of a new public benefit corporation to finance housing construction on state-owned land, inspired by the Mitchell-Lama program.
• Introduction of a new developer tax break with stronger affordability protections than the previous 421a program.
• Inclusion of "good cause eviction" legislation to restrict landlords' ability to evict tenants and justify rent hikes.
• Push for more construction of larger residential buildings in Manhattan and legalization of basement units.
• Requirement for condos and rentals built through the program to be affordable to middle-income households.

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The proposal will be released as part of the One House budget bill, to incentivize significant new development while supporting landlords and tenants. However, its success hinges on gaining support from both houses of the Legislature and the governor, with details such as financial viability and inclusiveness of tenant protections remaining crucial factors.

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The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Veterans Affairs (VA) announced the allocation of over $14.5 million to public housing agencies (PHAs) nationwide to address veteran homelessness. An estimated distribution of more than 1,400 HUD-Veterans Affairs Supportive Housing (HUD-VASH) vouchers will be carried out nationwide. Some of the highest concentration of vouchers will go to Tucson, Arizona; Philadelphia; and Spokane, Washington. These vouchers combine rental assistance from HUD with support services, like case management and clinical services provided by VA. The vouchers have contributed to a 4% decrease in veteran homelessness since 2020 and has housed over 46,000 homeless veterans in 2023 alone.

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Photo by Benjamin Faust on Unsplash

In a recent survey conducted by the National Association of Realtors, 34% of real estate agents' clients who were yet to secure a home, reported that scarcity of affordable properties in the market was their primary obstacle to homeownership. An additional 18% stated that their customers were biding their time for a decrease in interest rates.

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Insufficient availability of affordable homes, especially in larger metropolitan areas, alongside historically high interest rates have emerged as the predominant factors deterring potential homebuyers in the United States. Interestingly, prospective Black, Hispanic, and Asian buyers primarily pointed to home prices themselves as the key deterrent, while white buyers were equally as concerned by mortgage rates.

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As per the Mortgage Bankers Association, the average contract rate for a 30-year fixed-rate mortgage escalated to 7.27% during the week ending September 8, nearly reaching the highest rate observed in over two decades, as seen last month.

Retail giant Amazon announced on Wednesday the launch of a new pilot program designed to assist moderate-income families in three different U.S. communities with the purchase of up to 800 homes, in partnership with the National Housing Trust (NHT).

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The initiative will include $40 million to assist residents in the Puget Sound, Washington, Arlington, Virginia, and Nashville, Tennessee communities, the company said. Amazon says the investment will “help moderate-income residents in these communities to purchase homes as a path to help build generational wealth.”

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The nonprofit NHT will use the funds from Amazon’s program to acquire and build affordable homes for sale in partnership with a network of local organizations - Habitat for Humanity Seattle-King & Kittitas Counties serving the Puget Sound region; the African Community Housing & Development (ACHD) and Homestead Community Land Trust both serving King County, Wash., the Douglass Community Land Trust in Washington, D.C. and The Housing Fund serving Nashville.

Property insurance rates continue to soar as insurers aim to mitigate massive losses amid the increasing number of devastating climate change-related disasters. Coastal states like Florida and California are bearing the brunt of the rising insurance costs as wildfires, hurricanes, and storms go on the rise, and fears of earthquake damage remain ever-present. Some insurers have ceased offering property insurance coverage in certain markets altogether, including Allstate, which stopped accepting new applications in California in late 2022, and State Farm, which did the same in 2023.

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Progressive and Nationwide revealed earlier this year that they would no longer provide commercial property coverage for new customers in Florida.

Raising asking rents for apartment units is one avenue some multifamily property owners could pursue to mitigate the high cost of property insurance.

In a recent update from property data provider CoreLogic, it's revealed that U.S. single-family rents recorded a 3.3% year-over-year increase in June, marking the smallest rise since autumn 2020. 

The CoreLogic Single-Family Rent Index (SFRI), which tracks rent changes nationally and in major metro areas, reported a shift in June. Rent growth for attached homes exceeded that of detached properties, a dynamic unseen in recent years. Year-over-year, attached homes saw a 4% increase in rent, outpacing the 2.6% growth for detached homes.

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The demand for affordable housing drove a rapid increase in lower-cost rentals. Homes priced at 75% of the regional median witnessed a substantial 4.9% year-over-year uptick in June. In contrast, rentals priced at 125% or more of the median experienced a milder 2.3% increase. Chicago led with the highest year-over-year rise in single-family rents for June 2023 at 6.6%, trailed by Boston at 5.9%, and Orlando at 5.5%. However, Las Vegas experienced an annual decline in rent prices, dropping by -1.2%.

For decades, Montgomery County has led the country in affordable housing innovations, including a landmark law that requires developers to set aside about 15 percent of the units in new projects for households making less than two-thirds of the area’s median income, which is now $152,100 for a family of four. 

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The government agency in the area, the Housing Opportunities Commission of Montgomery County, has a stake in the new developments in the county. As a result, new projects are combining private and public subsidies and putting a modern spin on the concept of public housing. 

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The Laureate, a newly developed swanky residence that sits outside Washington, D.C., is the first building financed with a new $100 million fund that Montgomery County created to speed development by having H.O.C. invest directly in new projects, then using its ownership position to become a kind of benevolent investor that trades profits for lower rents.

Gov. Kotek’s first promise upon taking office is to build 36,000 new homes annually to overcome our housing backlog and bring down costs of housing statewide. While the homebuilding industry adamantly supports this goal, we know that everyone will need to do their part to bring down the high costs of housing and rent that are impacting families across this state.

Although Texas builds more homes than any other state, it’s not building enough to keep up with its massive population and economic growth, leading to historically high housing costs, according to housing advocates, builders and real estate experts. By some estimates, the state is short hundreds of thousands of homes.A sweeping agenda to slow Texas’ substantial rise in housing costs by reining in local regulations that opponents say get in the way of building new homes has died quietly in the Texas Legislature.

As rents skyrocketed in the aftermath of the pandemic and have continued squeezing Nevadans in the last year, local officials on numerous occasions stressed state law restricted them from taking action to address the housing crisis. Now given a chance to weigh in on legislation that would clarify their authority, local governments have been mostly silent on the matter.

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Image credits - iStockPhoto

"Florida Senate Bill 102 is among the most impactful legislation to stimulate the new construction of affordable housing that’s taken effect in Florida. The bill increases funding availability and provides important incentives to make affordable housing more feasible. However, Senate Bill 102 alone is not a silver bullet. Without increased engagement from local governments and increased local and federal affordable housing subsidies, communities will continue to experience an affordable housing supply that is far below the increasing need." – Jake Morrow, Principal, Interurban.

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Integra Investments and Centennial Bank executives discuss this major legislation, as well as their efforts to ease Miami's housing crisis.

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Image: Program logo from the Florida Housing Finance Corp. website

Many in New York hoped that the final version of the state’s $229 billion budget would include provisions to prevent cities and towns from limiting themselves exclusively to the construction of single-family homes. However, the Governor's Housing Compact plan was abandoned when it proved too controversial to keep budget negotiations with the Legislature moving along. Read about what this missed opportunity could cost the state.

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Arizona is short more than 200,000 homes to match demand and lawmakers proposed to fix that by changing local zoning regulations to make building easier, a strategy that has drawn heated opposition from cities across the state.

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Image credits - Unsplash

Developers are analyzing how to take advantage of Florida’s new legislation, which will set aside over $700 million in funding, create tax breaks, and provide zoning-related incentives for affordable and workforce housing developments. 

The law could contribute to a new boom in housing development, from entirely affordable buildings to mixed-income towers on commercial sites that developers are now looking to purchase, experts say. The Live Local Act, which Gov. Ron DeSantis signed last week, aims to help fill financing gaps, making more developments economically feasible. What is still crucial, attorneys and developers said, is combining that with incentives on the local level. he new legislation sets aside $259 million in SAIL (State Apartment Incentive Loan) funds. It also promises $252 million in SHIP (State Housing Initiatives Program) funding to incentivize local governments to partner with developers preserving or building new housing. The law goes into effect July 1. Developers are expected to apply for incentives this summer, and receive funds next year. If developers don’t have to pay property taxes (beginning in 2024), they can count on a project generating more net operating income, which means they can borrow more debt. Ultimately, that means they could develop more units, experts said. The huge increase in construction costs — including the price of land, debt, labor and materials — and insurance have contributed to the lack of affordable housing.

The Live Local Act aims to remedy some of that. It will put $100 million in non-recurring funds into a competitive loan program that developers could tap to cover inflation-related cost increases for Florida Housing and Finance Corporation-approved multifamily developments that haven’t broken ground yet.

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Image: Brian Sidman, Keith Poliakoff, J.C. De Ona and Jake Morrow (Source: Getty)