In this week’s Real Estate News in Brief… borrowers are using Skype to close their loans, housing affordability took a big dip in California, and Google is jumping into the short-term rental space.
We begin with economic news from Market Watch:
Consumers increased their borrowing in June but the pace was much slower than the month before. The Federal Reserve says consumers added another $12.4 billion of debt to their balance sheets. That’s down from $18.3 billion in May. Total consumer credit for non-revolving credit, like college and car loans, is $3.86 trillion. Consumer credit readings do not include loans for real estate.
The Labor Department reported an increase in productivity. It rose to an annual rate of .9% in the second quarter. That’s below the post World War II average of 2.1%. The low number has led to debate among economists about how to raise productivity. According to MarketWatch, some feel Congress should boost productivity with a tax bill and new infrastructure spending.
There’s more downward pressure on wholesale prices that could haunt the Federal Reserve and its plans to raise interest rates. The Labor Department reported that the producer price index was down .1% in July. Economists had expected a gain of about that much. The Fed typically hikes interest rates to help offset inflation.
Consumer prices were also soft in July which adds to the dilemma about further rate hikes. The Labor Department reported a seasonally adjusted .1% increase in the consumer price index, for an annual rate of 1.7%. In order to raise interest rates, the Fed would like inflation to hit an annual rate of 2%.
This is good news for borrowers. The 30-year fixed rate is still under that 4% mark, and this last week, it dropped a little lower. Freddie Mac says it fell 3 basis points to 3.90%.
Other real estate stories of interest
United Wholesale Mortgage Completes First-Ever Virtual E-Closing
United Wholesale Mortgage announced the very first “virtual e-closing” for refinancing loans. HousingWire reports that e-mortgages are gaining ground, but for the first time, a borrower closed the deal without physically going to a notary. Instead, UWM is making use of Facetime and Skype so that a notary can be virtually present when the borrowers sign the documents electronically.
The UWM CEO is calling it a revolutionary time for borrowers and independent mortgage brokers. Mat Ishbia says “The days of being bombarded with reams of paper at the closing table are over.” This also gives borrowers more leeway to close a loan at a time that’s convenient for them, and of course the notary. Ishbia told HousingWire that this will have an “incredible impact on the entire experience.”
UWM is making the virtual e-closing possible with the help of a digital notary platform called “Notarize”. It’s currently offering the service in Illinois, Montana, Virginia, and Washington, with plans to expand that to other states throughout the year.
Most Californians Priced Out of Homeownership
Affordability is shrinking in California according to the California Association of Realtors, just 29% of the people who live in the Golden State, had enough gold or cash in the second quarter to buy a median-priced home. That’s down from 32% in the first quarter of the year. A year before that it was 31%.
The median price for a single-family home in California is more than a half million dollars. CAR says a homebuyer would need to earn at least $110,000 a year to qualify for a loan. Condos and townhomes are a little more affordable. They have a median price of $443,000. About 38% of Californians can afford to buy those.
Airbnb’s New Competitor: Google
The short-term rental business has a new player, and it’s a force to be reckoned with. It appears that tech giant Google will be competing against Airbnb for rental listings. The Los Angeles Business Journal writes that Google has begun to include short-term rentals as part of its hotel feature in European cities. You just have to specify an “accommodation type” when you look for lodging in a particular city. The results will include places that are listed as temporary rentals.
The Journal writes that Google has about 7,000 vacation rental listings so far. Listing cities include Paris, Barcelona, Naples, Seville, Berlin, Venice, Rome, Palermo, Bordeaux, Madrid, Cologne, Munich, Dresden, Milan, Frankfurt, Nice, Lisbon, Nuremberg, Reims, and Porto. Once you’ve decided on a place, you can use Priceline’s Booking.com platform to make a reservation. The Journal writes that the short-term rental market is expected to hit $34 billion by the end of this year.
Employees Get First Crack at Tesla’s New Solar Roof System
Tesla employees are the first to test the company’s new solar roof tile system, according to TechCrunch. That gives the company an opportunity to test the new product on the homes of the people who developed it. Tesla co-founder Elon Musk is one of those “employees”. He told the blog that the first installations are already generating electricity.
The roofing tiles look like normal shingles from the street, but they have the solar generating technology built into them. Construction Dive writes that the average consumer would need to cover about 40% of the roof in those shingles. The rest of the roof could be covered with matching non-active shingles, also sold by Tesla.
The cost is expected to be an average $22 a square foot. According to the blog, the total cost for an 1,800-square foot home near Fresno, CA would be about $59,000. That includes the roof system and the battery storage pack.
Airbnb Listing Lets You “Live Like a Trump”
If you’ve ever wondered what it’s like to live like President Trump, Airbnb is offering you a great opportunity. Donald Trump’s boyhood home in New York City is now listed on Airbnb. It’s a 1940 Tudor-style home with five bedrooms. To help create a Trump-like environment, there’s even a life-sized cardboard cut-out of the President in the living room.
The President no longer owns the home. CNBC says it was auctioned to an unidentified buyer in March for $2.14 million. The fee for staying there? About $725 a night for the whole house. There are plenty of photos on the Airbnb website.
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