This brief presents an overview of residential property taxes. The brief considers recent trends in aggregate property tax revenues and examines the property tax at the county level. Property taxes are an important source of revenue for local governments, though effective property tax rates vary substantially by state and region. The counties with the highest property tax burdens tend to be in New York and New Jersey, while the counties with the lowest property tax burdens are located in Alabama and Louisiana. Most counties levy property taxes that are around $1,000 per homeowner and below 1 percent of house value.
Drawing from our specific expertise in spatial analysis, we have produced an MSA-level analysis of housing affordability, which will be enhanced over the next several months. This month we’ve added a regular quarterly installment that divides newly released GSE data by LTV ratio, FICO score, vintage year, and other characteristics. We also highlight trends in mortgage insurance premiums, and provide details about the latest risk-sharing transactions at Fannie and Freddie.
To address the a lack of information on the role of private investors in acquiring foreclosed properties in low-income communities in the wake of the housing bust, the What Works Collaborative funded a series of case studies in four market areas representing a range of market conditions: Atlanta, Boston, Cleveland, and Las Vegas. This report synthesizes the findings from the four case studies to identify common themes that emerged about the nature of investor activity, the potential impact of their activities on neighborhood conditions, and implications of these findings for public policy and ongoing research.
Shared equity initiatives provide homeownership opportunities to low- and moderate-income families who buy homes at below-market prices. The appreciation that can be earned by resellers is limited to preserve the home's affordability at resale. This article analyses seven shared equity programs, finding: homebuyers earned returns that were competitive with alternative investments; homes remained affordable to lower-income buyers over time; delinquency and foreclosure rates were very low; many families who sold their homes were able to use the proceeds to purchase market-rate homes; and owners showed little evidence of being locked in place.
Jim Stock, a member of the Council of Economic Advisors and a Senior Advisor to the President, discusses housing finance reform from a macroeconomic perspective. Specifically, elaborating on the need for the mortgage finance system to provide liquidity at reasonable rates during good and bad economic times. Stock refers to this property as cyclical resilience.
By most measures, the US housing market appears to be in strong recovery. House prices have risen consistently since January 2013, and by August, the US median home price was the highest it had been since December 2004. As a result of a stronger economy, mortgage rates also have increased consistently since December 2012. Though rising mortgage rates and house prices indicate that the country is in a housing recovery, they indicate housing is less affordable than it was several months ago. Moreover, employing a unique methodology that accounts for regional differences in debt-to-income and loan-to-value ratios, we find that affordability varies significantly among major metropolitan areas.
Las Vegas, Nevada saw the highest levels of foreclosure and price collapse of any American metro, prompting a wave of distressed real estate investor buying that has dominated the area market since 2009. This paper presents a case study of the activities and characteristics of these investors drawing upon both quantitative analysis and interviews with knowledgeable informants. This is one of four case studies that explore the behavior of distressed real estate investors since the collapse of the housing bubble and the onset of the mortgage crisis, and their impact on real estate market and community conditions.
This independent assessment of the What Works Collaborative (WWC) was conducted in the summer and fall of 2012 and focused on determining the benefits, the challenges, and the influence of the WWC. The assessment included 21, one-hour, key informant interviews with WWC participants. Respondents were questioned about the management of the collaborative and research development processes, the efficiency of the collaborative model, the overall quality and relevance of the research, and the dissemination strategies.
The Choice Neighborhoods Initiative, a signature program in the Obama Administration’s Neighborhood Revitalization Initiative, aims to redevelop distressed assisted housing developments and improve their neighborhoods. This brief introduces the first five implementation sites—in Boston, Chicago, New Orleans, San Francisco, and Seattle—and the plans for rebuilding them. Ranging from a few blocks to over two square miles, the sites vary greatly in their challenges, programs, and key actors. All five are making progress in this new phase of federal housing and community development and are addressing the challenge of coordination in their ambitious attempts to build mixed-income neighborhoods.
GSE credit has become very tight, with a significant increase in the average credit score of approved loans. How Fannie Mae and Freddie Mac are enforcing their Representations and Warranties (Reps and Warrants) rights is playing a significant role in this phenomenon. In this paper, we use the recently released Freddie Mac and Fannie Mae loan level credit data and find that put-backs are having an outsized chilling effect on lower FICO/higher LTV loans.