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Real Estate Trends & Economic News - Joe Bourland

FHA to reduce MIP (Mortgage Insurance Premiums)

The article, Federal Housing Administration to reduce annual insurance premiums, saving homeowners avg $500 this year, from, reports that U.S. Housing and Urban Development Secretary Julián Castro said on Monday the Federal Housing Administration will reduce the annual premiums most borrowers will pay by a quarter of a percent.  

The FHA is reducing its annual mortgage insurance premium by 25 basis points for most new mortgages with a closing or disbursement date on or after Jan. 27. The new rates are projected to save new FHA-insured homeowners an average of $500 this year, Castro said. The secretary said consumers are facing higher credit costs as mortgage interest rates increase. "After four straight years of growth and with sufficient reserves on hand to meet future claims, it's time for FHA to pass along some modest savings to working families," said Castro.  

The new rates come as the FHA enters a fourth straight year of improved economic health, the administration said. The FHA gained $44 billion in value since 2012. "We've carefully weighed the risks associated with lower premiums with our historic mission to provide safe and sustainable mortgage financing to responsible homebuyers. Homeownership is the way most middle class Americans build wealth and achieve financial security for themselves and their families," Ed Golding, principal deputy assistant secretary for HUD's Office of Housing, said in the report.  

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Arizona cracks top 10 for attracting people moving from other states during 2016!

The article, Arizona cracks top 10 for attracting people moving from other states during 2016, from, reports that Arizona might be emerging as a hot destination for newcomers, according to a new survey that tracks state-to-state migration patterns.

The annual report by United Van Lines places Arizona as the 10th-highest state for attracting people moving from other states during 2016. Arizona didn't crack the top 10 in the 2015 survey. In the 2016 study, South Dakota overtook Oregon, which had held the top spot for the previous three years. After South Dakota, Vermont placed second in attracting newcomers, followed by Oregon, Idaho, South Carolina, Washington, the District of Columbia, North Carolina, Nevada and Arizona. New jobs, company transfers and retirement are among the main reasons that people pack up and move from one state to another. Pacific and Mountain states have been especially strong in luring retirees, according to the study. A desire to be closer to family members is another important motivation. For top-ranked South Dakota, 68 percent of moves to or from the state were inbound.

 In Arizona, in 10th place, 57 percent of total moves were inbound. 

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The article, Arizona ends year on strong income and population growth, from the Phoenix Business Journal, reports that Arizona’s population is poised to top 7 million people next year, based on average and highest growth rates since 2010, according to the U.S. Census Bureau.

Added to that estimate, the Bureau of Economic Analysis reports personal income in Arizona increased 1 percent in the third quarter this year over the second quarter. The 1.7 percent population increase for 2016 over 2015 makes the state the eighth fastest-growing state in terms of percentage growth. In terms of the number of new residents, Arizona ranked fifth nationally, adding 114,000 newbies and taking the population to 6.9 million. Arizona ranked No. 20 for personal income growth over last year gaining 3.8 percent in the last 12 months.

The advanced industry sectors saw the highest increases in earnings growth in the third quarter over the second quarter. Management wages rose 4 percent. Education wages rose 2.9 percent in the quarters. Financial services and business services were up 2.5 percent. Leisure and hospitality wages was up 2.3 percent.  

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Metro Phoenix new-home prices ready to rise in 2017

The article, Metro Phoenix new-home prices ready to rise in 2017, from, reports that Arizona housing analyst Jim Belfiore predicts new-home prices in the Valley will climb an average of 7 percent to 9 percent this year. In 2016, new-home prices in the area climbed about 2 percent. 

“Appreciation is the biggest issue for the home-building industry now,” Belfiore told a packed room of home builders, developers and others in the real estate industry at his annual Valley housing forecast on Thursday. That’s because the cost of building has climbed 50 percent in the past two years,” he explained. A panel of metro Phoenix home builders and a developer with more than 60,000 acres in Arizona spoke before Belfiore and emphatically made the point about home-price increases not keeping up with building costs. “The market’s recovery feels good now but not great,” said Meritage Homes Corp. CEO Steve Hilton. “Home costs are up, but margins are low.” Valley builders are out of the bargain land they were able to buy during the housing crash in the Great Recession, and a shortage of construction workers has driven up building costs. 

The median price of a new Valley home was about $311,000 in November, according to RL Brown’s Phoenix Housing Market Letter. That’s only about $1,000 more than it was in June of last year. Home builders also  can likely raise prices more this year because demand from buyers has picked up. Belfiore is predicting more than 21,000 houses will go up in the Phoenix area this year.

Based on what the builders said at the forecast, most of the new homes will be more affordable and geared toward first-time buyers, particularly #Millennials. The home builders on the panel all agreed they would focus on more affordable homes to try to tap the growing number of first-time buyers in metro Phoenix this year. 

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