Case-Shiller: Housing is not repeating the bubble period

Home prices increase in May

Home prices continued to increase in May, however experts explained housing is not repeating the bubble period, according to the latest report from S&P Dow Jones Indices and CoreLogic.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, increased 5.6% in May, the same increase as the month before. Before seasonal adjustment, the National Index increased 1% from May, however after seasonal adjustment, it increased just 0.2%.

“Home prices continue to climb and outpace both inflation and wages,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the index committee. “Housing is not repeating the bubble period of 2000 to 2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”

“The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices,” Blitzer said. “New home construction, higher than during the recession but still low, is another factor in rising prices.”

The 10-City Composite also increased, rising 4.9% from last year. This increase is down from the 5% annual increase in April. Before seasonal adjustment, the 10-City Composite increased 0.7%, however after seasonal adjustment it showed no increase.

Similarly, the 20-City Composite increased 5.7% in May from last year, down from April’s annual increase of 5.8%. It increased 0.8% before seasonal adjustment, but only 0.1% after the adjustment. All top 20 cities in the U.S. reported increases before seasonal adjustment, and after seasonal adjustment 14 cities saw monthly price increases in May.

The chart below shows the National, 10-City and 20-City Indices, and their history. As of May 2017, the average home prices within the 10-City and 20-City Composites hit 2007 levels in home prices.

Case-Shiller

(Source: S&P Dow Jones)

“For the last 19 months, either Seattle or Portland was the city with fastest rising home prices based on 12-month gains,” Blitzer said. “Since the national index bottomed in February 2012, San Francisco has the largest gain. Using Census Bureau data for 2011 to 2015, it is possible to compare these three cities to national averages.”

“The proportion of owner-occupied homes is lower than the national average in all three cities with San Francisco being the lowest at 36%, Seattle at 46%, and Portland at 52%,” he said. “Nationally, the figure is 64%. The key factor for the rise in home prices is population growth from 2010 to 2016: the national increase is 4.7%, but for these cities, it is 8.2% in San Francisco, 9.6% in Portland and 15.7% in Seattle. A larger population combined with more people working leads to higher home prices.”

Link to Original Article on HousingWire.com

Experts: Spring home-buying season starts off with a bang

But first-time buyers face headwinds from high prices

The spring home-buying season is in full swing and it started off with a bang.

Home prices increased in February to a new high for the fourth consecutive month, according to the S&P CoreLogic Case-Shiller Indices, released Tuesday by S&P Dow Jones and CoreLogic.

And another release Tuesday from the Federal Housing Finance Agency showed home prices rose 6.4% annually and 0.2% from the prior month.

But these rising home prices didn’t hold back new home sales, which increased a full 5.8% monthly and 15.6% annually, according to Tuesday’s release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

“The 2017 spring home shopping season has started off with a bang, and at this point the strength of the market shouldn’t come as much of a surprise,” Zillow Chief Economist Svenja Gudell said. “February Case-Shiller numbers point to more fierce competition in the housing market.”

“The thing to watch for now is when market conditions will shift, and change does seem to loom on the horizon, with rising mortgage interest rates and flattening rents,” Gudell said. “Both could put a dent in home-buyer demand and overall price growth and affordability.”

Another expert confirmed that the market is strong for now, but explains high home prices and low inventory create significant headwinds for first-time homebuyers.

“Strong demand bolstered by income and job growth sets the stage for intense competition and continued price growth in the housing market,” Trulia Senior Economist Cheryl Young said.

“Consumers are likely to also take advantage of mortgage rates as they remain low,” Young said. “While the housing market looks to be recovering, these high prices impact the affordability of homes, directing the strongest headwinds towards starter-home buyers.”

But one expert explained that while new home sales were above expectations in March, home prices are actually beginning to level out.

“New home sales for March were above our expectations,” said Tian Liu, Genworth Mortgage Insurance chief economist. “Strong demand from homebuyers and very tight supply conditions in the overall housing market are fueling demand for new homes.”

“In addition, prices on new homes are stabilizing, suggesting more affordable homes are coming to the market, which will help builders capture more demand from first-time homebuyers,” Liu said.

While the Case-Shiller report shows home prices increased to a new high, the rate of increase slowed.

“The pace of house price gains slowed in February according to Case-Shiller, with the smallest month-on-month rise since July last year,” Capital Economics Property Economist Matthew Pointon said.

After the new home sales report showed March’s increase, one expert explained this increase is likely to continue throughout 2017.

“We expect new home sales to rise further over the course of 2017 in response to solid job gains, faster wage growth, still low, albeit rising, mortgage rates, and faster household formations,” said Nationwide Chief Economist David Berson, who served as chief economist at Fannie Mae for over 20 years.

However, the increase in new home sales may not be much help for first-time homebuyers.

“The good news is that new home sales jumped for the third month in a row, to about the same as last year’s peak in July,” realtor.com Senior Economist Joseph Kirchner said. “Already this spring market is challenging last year’s high-water mark.”

“The bad news is that sales are increasingly concentrated at the mid- to upper-end of the price range,” Kirchner said. “Sales of affordable new homes under $200,000 dropped to 12% from 17% of the market since last April.”

LINK TO ORIGINAL ARTICLE

Ben Carson sworn in, spends first day as HUD Secretary

Will lead agency with 8,000 employees, $40 billion annual budget

After being confirmed by a 58-41 vote in the Senate, Ben Carson officially became the 17th secretary of the Department of Housing and Urban Development on Thursday evening when he was sworn in by Vice President Mike Pence.

Carson took the oath of office alongside his wife, Candy, and his granddaughter, Tesora, who held the bible for Carson.

After being sworn in by Pence, the vice president took to Twitter to congratulate Carson, stating that “Secretary Dr. Ben Carson will open doors of opportunity and meet the needs of our most vulnerable.”

View image on TwitterView image on Twitter

Carson also received congratulations from the official presidential account of President Donald Trump.

Carson takes over at HUD for Craig Clemmensen, HUD’s Director of the Departmental Enforcement Center, who served as interim HUD secretary during the transition after Julián Castro left at the end of the Obama administration.

As HUD secretary, Carson will be tasked with leading an agency that has approximately 8,000 employees and boasts an annual budget of more than $40 billion.

“I am immensely grateful and deeply humbled to take on such an important role in service to the American people,” Carson said in a statement after being sworn in.

“Working directly with patients and their families for many years taught me that there is a deep relationship between health and housing,” Carson continued. “I learned that it’s difficult for a child to realize their dreams if he or she doesn’t have a proper place to live, and I’ve seen firsthand how poor housing conditions can rob a person of their potential. I am excited to roll up my sleeves and to get to work.”

According to HUD, one of Carson’s first actions as HUD secretary will be to embark on an “ambitious listening tour of select communities and HUD field offices around the country, beginning in his native Detroit.”

Before leaving for that listening tour, Carson spent his first day as HUD secretary on Friday.

As part of his first day, Carson greeted HUD employees, posting from his new @SecretaryCarson Twitter account that he is “looking forward to meeting (HUD) employees across the country.”

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

Carson also spent part of his first day visiting HUD’s health clinic to discuss the services the clinic provides to HUD’s employees.

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According to HUD, Carson also plans to give his first address to HUD employees on Monday.

~Original article can be found at HousingWire.com~

Monday Morning Cup of Coffee: Trump shows he’s serious about deregulation

Monday Morning Cup of Coffee: Trump shows he’s serious about deregulation

Also, The New York Times goes negative on Quicken Loans

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.

Politics continued to dominate the news cycle this weekend, with inauguration parties and protests following Donald Trump’s swearing in as POTUS.

Trump’s administration wasted no time making good on some of his campaign promises, with the Department of Housing and Urban Devlopment suspending the reduction of FHA Mortgage Insurance Premiums one hour after Trump was sworn in. The Obama administration had just announced the cut to the FHA premiums on Jan. 9.

But a more telling regulatory move was the one Trump took Friday night when he signed an executive order seeking to repeal the Affordable Care Act. An exectuve order doesn’t change the existing law, but does change the enforcement of the law, a course of action that could just as easily be applied to mortgage legislation like Dodd-Frank. From a CNN article:

It directs the secretary of health and human services, as well as other agencies, to interpret regulations as loosely as allowed to minimize the financial burden on individuals, insurers, health care providers and others.
It stressed that agencies can “waive, defer, grant exemptions from or delay implementation of any provision or requirement” of Obamacare that imposes a burden “to the maximum extent permitted by law.”

On Sunday, Politico reported that Senate Majority Leader Mitch McConell believes Republicans had the votes to confirm all of Trump’s cabinet, which includes Steven Mnuchin for Treasury Secretary and Ben Carson as HUD Secretary. The Senate has already confirmed James Mattis as defense secretary and John Kelly as homeland security secretary.

After lots of handwringing beforehand by people worried about his housing resume, Carson’s Senate confirmation hearing was mostly tame, but Mnuchin, a former executive at Goldman Sachs and chairman of OneWest Bank, formerly IndyMac, was not so lucky. Mnuchin was put through a blistering round of questions from Democrats, including a scolding speech from Sen. Elizabeth Warren, D-Mass.

Warren and other Democrats had solicited complaints from those who had been foreclosed on by OneWest and planned to have them testify during Mnuchin’s hearing, but Sen. Orrin Hatch blocked them from testifying. Mnuchin vigorously defended the actions of OneWest during the foreclosure crisis, noting that the bank tried to do loan modifications whenever possible and pointing out that he was not responsible for originating the loans.

Speaking of Mnuchin, I finally got to see The Accountant this weekend, a movie Mnuchin produced starring Ben Affleck. But Affleck shares the spotlight in the film with another key player that is hardly known outside the financial services industry: the Treasury department’s Financial Crimes Enforcement Network (FinCEN). The film features FinCEN agents solving high-profile cases involving drug cartels, money laundering and mafia bosses, which lines up well with the agency’s actual mission and accomplishments.

Bankers are intimately familiar with the agency, of course, which enforces rules under the Bank Secrecy Act, including the gathering of Suspicious Activity Reports. But your average American has never heard of them, and I felt a little like Buddy the Elf when he thinks he’s going to see Santa, shouting,  “I know him!!”

Just to recap, a former executive at Goldman Sachs and OneWest Bank is also a movie producer who just so happened to produce a thriller this year that involves the Treasury, which it now appears he will run in real life. Which actually sounds like a movie plot itself. Mnuchin’s company, RatPac-Dune Entertainment, also helped finance movies like Suicide Squad, Batman v. Superman: Dawn of Justice, The Conjuring 2 and Fantastic Beasts and Where to Find Them. No word yet on whether Mnuchin will also become a wizard and/or Batman.

Why did the New York Times run such a negative piece on Quicken Loans? The New York Times ran a profile on Saturday titled, Quicken Loans: The New Mortgage Machine, by Julie Creswell, which left me scratching my head. The article begins by citing some quirky examples of Quicken’s culture, but somehow makes them seem sinister.

A visit to the headquarters of Quicken Loans in downtown Detroit may seem like a trip to a place where “Glengarry Glen Ross” meets Seussville. But the whimsical, irreverent atmosphere sits atop a fast-growing business in a field — the selling of the American dream — that has changed drastically since an earlier generation of mortgage lenders propelled the economy to near collapse in 2008 by issuing risky and even fraudulent loans.

In case you didn’t see the movie, comparisons to Glengarry Glen Ross are far from positive. In fact, the whole paragaph is filled with negative connotations. Originating mortgages is equated with “selling the American Dream,” followed by a sentence conjuring up the ghost of the financial crisis where mortgage lenders “propelled the economy to near collapse” through loans that were not just “risky” but “fraudulent.”

The rest of the article is similarly written, with nonbanks consistently referred to as part of  “shadow banking.” Either the author is unfamiliar with the actual definition of shadow banking, or hasn’t paid attention to the increasing scrutiny the nondepository lenders are under. as demonstrated by the Community Home Lenders Association, here.

In describing Dan Gilbert, Quicken’s founder, the article follows any positive contributions he has made with negative asides. For instance, noting that Gilbert has revitalized downtown Detroit by locating not only Quicken Loans but also other businesses there, the article states,

“That sort of presence makes downtown Detroit today seem a bit like a company town, a sort of Quickenville. That’s because Quicken Loans is just one of more than 100 closely knit companies that is owned or controlled by Mr. Gilbert with a footprint in the area. Through his commercial real estate properties, Mr. Gilbert can decide which tenants fit into his vision for downtown Detroit, and which don’t.”

Quickenville? Was Creswell making a reference to Pottersville from It’s A Wonderful Life, where the greedy banker makes money off poor tenants? What a bizarre way to describe the wholesale investment in a town that no one else would touch, providing tens of thousands of jobs in the process.

Another description of Gilbert tries to make him seem irrational in his explanation of why his company was targeted by the Department of Justice for a false claims lawsuit in 2015. According to the article, Gilbert states: “You want to know what this case is about?” he said. “Somebody probably put up a whiteboard and said, ‘Here are the 10 largest F.H.A. lenders, now go and collect settlements from them, regardless of whether they did anything wrong.’”

I don’t know about the Department of Justice, but that scenario is completely in line with some of the recent revelations about another regulator — the Consumer Financial Protection Bureau. To anybody familiar with the CFPB’s enforcement style, that description is not at all off base.

Earnings season continues this week, with D.R. Horton, Fifth Third and BOK Financial reporting early in the week. Check back with HousingWire for all the details on companies in the mortgage finance space.

Zillow: Total value of U.S. housing reaches all-time high

Housing market regains all value lost in crisis

The total value of all the housing stock in the United States has never been worth more than it is right now, according to a new report from Zillow.

The report says the total value of U.S. housing stock grew to a total of $29.6 trillion in 2016, marking an all-time high.

Zillow’s report shows that housing stock showed an increase of $1.6 trillion from 2015, a 5.7% increase in value to reach that record level.

That increase also means that the U.S. housing market has now regained all of the value that was lost during and after the housing crisis.

According to the report, the cumulative value of all homes in the U.S. declined by $6.4 trillion from 2006 to 2012 as the housing market collapsed.

But now, all of that value has been gained back.

It’s important to note that Zillow’s report is a national total of housing values. As the report shows, there are more than a few markets where housing values have not completely recovered from the crisis yet.

In fact, according to Zillow’s report, there are several markets that are now more valuable than they were at the height of the housing bubble, but roughly 60% of the markets in the U.S. are still below the maximum values reached during the bubble years.

As an example, the Chicago market is still approximately $134 billion below the highest value it reached in 2006.

According to Zillow’s report, the Los Angeles and New York metro areas have the highest shares of the country’s overall housing value, at 8.6% and 8%, respectively.

San Francisco checks in at third on that list, with Bay Area housing carrying 4.2% of the nation’s overall housing value.

As Zillow notes in its report, while the record high in U.S. housing value shows that the housing market is still moving in the right direction, the increase in value could also price more prospective buyers out of the market.

“Housing is incredibly important to us personally and to the economy as a whole,” said Zillow Chief Economist Svenja Gudell.

“The U.S. housing stock is worth more than ever, which is a sign of the ongoing housing recovery,” Gudell added.

“As buying a home gets more expensive, affordability remains a concern for many, and these numbers highlight just how much people are spending on housing,” Gudell said. “The total value of the housing stock grew nearly 6% this year, a pace that will likely mean some American families are priced out of homeownership.”

And many of those families that are priced out of homeownership end up turning to renting to put a roof over their family’s heads, as Zillow’s report also shows.

According to data analyzed by Zillow, in 2016, renters in this country paid $478.5 billion in rent, which represents a $17.7 billion increase from 2015.

Zillow’s report also shows that approximately 635,000 new renter households formed in 2016, which contributed to the amount of rent spent even as rent appreciation slowed.

According to Zillow’s report, apartment renters spent nearly $50 billion more than renters of single-family homes, as more multifamily construction became available this year.

Home builder confidence ends the year at highest point since 2005

New housing inventory to come in 2017?

Home builders saw a significant boost in confidence after President-elect Donald Trump won the election, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

This increase brought builder sentiment up seven points to a level of 70, the index’s highest point since July 2005.

“This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said NAHB Chairman Ed Brady, a home builder and developer.  “This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29% in the past five years.”

Perhaps this is just the increase the industry needs to boost new home development for first-time buyers, something that First American Chief Economist Mark Fleming said will be a key player in 2017’s housing market.

“Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” NAHB Chief Economist Robert Dietz said.

“The rise in the HMI is consistent with recent gains for the stock market and consumer confidence,” Dietz said. “At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three components of the HMI increased in December. The component gauging current sales conditions increased seven points to 76, while the index measuring sales expectations in the next six months increased nine points to 78. The component measuring buyer traffic increased six points to 53, the first time it moved above 50 since October 2005.

Monday Morning Cup of Coffee: Here’s what we know about Trump’s housing team

Who else wants to join the team?
Real-mmcc

The deadline for President-elect Donald Trump to fill more than 4,000 political appointees is approaching fast.

When Trump became the next official president to move to D.C., from a Democratic-run system to a Republican-run system to boot, a whole lot of jobs opened up too.

An article in Reuters by Peter Van Buren explains what happens when it comes to the actual work of filling jobs.

Trump was well aware if he won he would need to hire, and if he was not keeping lists of potential candidates, you can be sure others around him were. Far from some kind of unanticipated chore, political organizations stretching back to Tammany Hall if not ancient Rome live for this task – handing out jobs is one of the prizes every election winner, Republican or Democrat, takes home.

Here’s what we know so far about which political officials the President-elect selected for housing.

Let’s start with the biggest name when it comes to housing, the Secretary of Housing and Urban Development.

In what’s turned into one of the most covered selections, Trump announced he selectedBen Carson to lead HUD on Dec. 5.

For HousingWire readers, the news wasn’t too surprising since we exclusively reportedCarson’s intention to accept the nomination an entire week prior.

“I am honored to accept the opportunity to serve our country in the Trump administration,” Carson said. “I feel that I can make a significant contribution particularly by strengthening communities that are most in need. We have much work to do in enhancing every aspect of our nation and ensuring that our nation’s housing needs are met.”

The selection of Carson then opens the door to the next key role and possibly an even more pivotal one, the deputy secretary.

Even though HUD secretary gets to sit at the helm of the top housing agency, most of the day-to-day operations are handled by the deputy secretary, currently Nani Coloretti, who essentially serves as COO.

It’s those people inside the housing market that are closely watching for who will fill this position. Here’s the short list for deputy secretary: Pam Patenaude, president of the J. Ronald Terwilliger Foundation for Housing America’s Families and former director of the Bipartisan Policy Center, Rick Lazio, former New York Congressman and national housing attorney, and Brian Montgomery, former assistant secretary for housing and federal housing commissioner at HUD.

Future Treasury Secretary Steve Mnuchin is the other top position that Trump already announced.

Mnuchin is a former executive at Goldman Sachs and former chairman of OneWest Bank. He also previously served as the finance director of Trump’s campaign and has a long history of working in finance and mortgages.

He’s had the role for less than two weeks and in that period has already touched on GSE reform and reforming Dodd-Frank.

After these top positions, you get into the transition-team announcement.

So far, in housing, Trump announced he selected Paul Atkins, a former Republican member of the Securities and Exchange Commission, to be on the landing team for the Consumer Financial Protection Bureau and Quicken Loans executive vice president Shawn Krause to the HUD transition team. Check here for other transition team announcements.

Van Buren noted in the article that the big jobs will then fill in below them, the deputy and assistant secretaries, attorneys and special advisors.

Given the number of people he knows and trusts from his business, Trump himself may seed in some mid-level appointees, particularly in agencies like Treasury and Commerce.

These positions amount to about one-fourth of the jobs that need to be staffed. And of those, maybe fewer than 100 are critical for Day One.

On the other side, we have the people electing to step down from their positions.

Mary Jo White, the chair of the Securities and Exchange Commissionannounced she planned to step down at the end of the year, clearing the way for Trump to choose new leadership for the financial regulator. Andrew Ceresney, the SEC’s enforcement director, announced he plans to step down at the end of the year as well.

Think you have what it takes to join the Trump administration? Van Buren stated that the last way Trump will staff up his administration is via application.

That’s right. You can go to Trump’s website right now and apply to join his team.

For those who want to apply, here are a couple factors the website suggests considering:

  • The time commitment is significant and the pace is fast
  • Appointments and jobs of the Trump-Pence Administration are demanding, and the application process is rigorous

Go here to apply.

This list is changing everyday, so be sure to follow HousingWire for the latest coverage. Or if you think we missed anyone, feel free to shoot us email! We know the tops seats right now, but there are a lot of important housing positions up for grabs.

QUIZ: How well do you know the past HUD secretaries?

QUIZ: How well do you know the past HUD secretaries?

I didn’t go easy on you!

President-elect Donald Trump’s selection of Ben Carson as secretary of the Department of Housing and Urban Development brought national attention to a department that’s long been in the shadows.

Now that a household name (no pun intended) is about to lead HUD, every day Americans, politicians and the media are all giving their two cents on what this means for the country.

But before people go speculating about the future of HUD, why don’t you give this quiz I made on the history of HUD secretaries a shot?

While Carson sparked a lot of opinions on the HUD secretary position, I would be curious to see if people can name any other HUD secretaries or facts about the position.

And I didn’t go easy on y’all, so good luck! If you get a 100%, you can consider yourself a HUD aficionado.

One note when taking the quiz — I did not count acting HUD secretaries or Carson in questions that asked about total numbers.

The 5 Real Estate Trends That Will Shape 2017

The 5 Real Estate Trends That Will Shape 2017
2017-trends

We won’t pretend to know everything that 2017 will bring—heck, 2016 sure surprised us—but we’re pretty certain there will be changes. A lot of them. And while the surprise triumph of Donald Trump in the presidential election won’t alter the fundamentals shaping the 2017 real estate market, its impact is already being felt.

We’ve seen interest rates jump since the election, a movement that’s likely to affect the youngest generation of home buyers.

Just like last year, realtor.com®‘s economic data team analyzed our market data and economic indicators to come up with a picture of the key housing trends for 2017. As we prepare to bid farewell to 2016, it looks like we’ll be saying goodbye to the last of the record-low interest rates of the past few years, too. Interest rates have shot up 40 basis points, or 0.4 percentage points, since Trump’s election.

And that’s significant, especially for first-time home buyers, including many millennials.

“With more than 95% of first-time home buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we’ve already seen may price some first-timers out of the market,” says Chief Economist Jonathan Smoke, who worked on the realtor.com 2017 housing forecast.

According to the forecast, the 2017 national real estate market is predicted to slow compared with the past two years, across the majority of economic indicators studied.  But maybe “slowdown” isn’t quite the right description.

“I would characterize our 2017 forecast as a moderation, as opposed to a slowdown,” says Smoke. “The pace of growth is still strong and, for pricing, still represents an above-average level of appreciation.”

Smoke says we’re mostly reverting to normal prices, after years of appreciation as the housing market recovered from its 2008 crash.

Recovery is good, but the flip side is that pricing is tougher for consumers, Smoke points out.

“Throw in higher mortgage rates, and it becomes more challenging to be able to afford homes compared to what it was over the course of this recovery,” he says.

Here are some of the key predictions for 2017:

1. Millennials and boomers will move markets

In 2017, the U.S. real estate market will be in the middle of two massive demographic waves that will power demand for at least the next 10 years.

Millennials and baby boomers, the two largest American generations in history, are both approaching life stages that typically motivate people to buy a home: marriage, having children, retirement, and becoming empty nesters.

Smoke predicts that millennials will make up 33% of buyers in 2017, lower than his original estimate due to those increasing interest rates.

2. Millennials will look to the Midwest

While the financial picture may look grim for our youngest home buyers, the Midwest, with its affordable cities, still looks good. We believe Midwestern cities will continue to beat the national average in terms of its proportion of millennial home buyers in 2017. Leading the pack are Madison, WI; Columbus, OH; Omaha, NE; Des Moines, IA; and Minneapolis.

“It’s easier for millennials to buy in more affordable markets like in the Midwest,” Smoke says. “We’re also seeing large numbers of millennials buying in Midwestern markets with or near big universities. So part of this is an effect of recent graduates with good jobs being able to settle down in these more affordable markets.”

3. Price appreciation will slow down

Nationally, home prices are forecast to slow to 3.9% growth year over year, from an estimated 4.9% in 2016.

“Prices are still likely to go up at an above-average pace as long as supply remains so tight,” Smoke says. “The inventory problem is not going away.”

Of the top 100 largest metros in the country, 26 markets are expected to see price acceleration of 1 percentage point or more, with Greensboro, NC; Akron, OH; and Baltimore experiencing the largest gains. Likewise, 46 markets are expected to see a slowdown in price growth of 1 percentage point or more, with Lakeland, FL; Durham, NC; and Jackson, MS, undergoing the biggest downshift.

4. Fewer homes, fast-moving markets

The inventory of homes available for sale is currently down an average of 11% year over year in the top 100 U.S. metropolitan markets—and the conditions limiting home supply are not expected to change in 2017. The median age of inventory, or the time it takes a home to sell, is currently 68 days in the top 100 metros, which is 14%, or 11 days, faster than the national average.

5. The West will lead the way

We’re expecting metropolitan markets in the West will see a price increase of 5.8% and sales increase of 4.7%, much higher than the U.S. overall. These markets also dominate the ranking of the realtor.com 2017 top housing markets (more on that tomorrow), making up five of the top 10 markets on the list: Los Angeles, Sacramento, and Riverside in California; Tucson, AZ; and Portland, OR.

It’s looking like Ben Carson is Trump’s HUD pick. What do you think?

Ben Carson as HUD Secretary? All signs point that way

Trump reportedly offers top HUD job to Carson, who indicates he will accept

government

After President-elect Donald Trump tweeted Tuesday that he was “seriously considering” offering the job of Secretary of Housing and Urban Development to Ben Carson, all signs appear to show that Carson will indeed be the next HUD secretary.

On Tuesday, Trump tweeted that he’s “gotten to know (Carson) well” and feels he is a “greatly talented person who loves people.”

Later Tuesday, a report from Reuters stated that Trump did offer the top HUD job to Carson.

The Reuters report cited Carson’s business manager, who said that Trump asked Carson to “consider” the position, a request that Carson agreed to.

According to the report, Carson plans to consider Trump’s offer over the Thanksgiving holiday.

But Carson himself took to Twitter and Facebook Wednesday to discuss the HUD offer and strongly intimated that he plans to accept the job.

“We have much work to do in strengthening every aspect of our nation and ensuring that both our physical & spiritual infrastructure is solid,” Carson tweeted Wednesday morning.

Carson followed that tweet with another suggesting that the plans to accept the HUD job, stating “An announcement is forthcoming about my role in helping to make America great again.”

That tweet is accompanied by a link to Carson’s Facebook page, where posted a message that appears to provide some insight into his plans for HUD.

“Winning the presidential election was only the first step for those who love traditional America and do not wish to fundamentally change it,” Carson wrote.

“Now the hard work begins of restoring the values that made us great. We must bring back the compassion and the unity that empowers us and banish the divisiveness that weakens us,” Carson continued.

“After serious discussions with the Trump transition team, I feel that I can make a significant contribution particularly to making our inner cities great for everyone,” Carson added.

“We have much work to do in strengthening every aspect of our nation and ensuring that both our physical infrastructure and our spiritual infrastructure is solid,” Carson concluded. “An announcement is forthcoming about my role in helping to make America great again.”

Carson’s insinuation that he plans to accept the HUD job is a stark turnaround from just over a week ago when his business manager said that Carson did not want to serve in Trump’s cabinet.

But now, it appears that Carson is ready to take on the job at HUD, which puts him in a position to oversee the Federal Housing Administration as well as countless other housing programs.

As HousingWire noted Tuesday, Carson, a former neurosurgeon, would not bring the same level of housing knowledge to HUD that the other rumored candidates, Pam Patenaude and Robert Woodson would bring.

Patenaude currently serves as the president of the J. Ronald Terwilliger Foundation for Housing America’s Families. She is also a former adviser to Presidents Ronald Reagan and George W. Bush. Under President Bush, she served as HUD assistant secretary for community, planning and development.

Patenaude is also the former director of housing policy at the Bipartisan Policy Center.

Woodson who runs the Center for Neighborhood Enterprise in Washington, D.C.,, is a close advisor for Speaker of the House Rep. Paul Ryan, R-Wisc., on poverty issues.

But it appears that none of that experience mattered to Trump.

Whether that’s a good decision or not remains to be seen.