Eye on Santa Fe

The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals

The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well to ensure as many real estate professionals as possible would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members, not only in the last three months, but over several years.






February 27, 2020

New Headlines Are Better

There have been plenty of headlines in 2020 and it is only mid-February. The virus scare has died down a bit in the markets, though this is no indication that the threat of the virus has gone away. It just seems that these events can only hold the attention of the markets for just so long. A recent event reminded us of this fact.

This event was the recent Brexit day at the end of January. The UK formally has left the European Union as of January 31. Remember back to 2016 when the threat of Brexit was all over the headlines and the markets were reacting accordingly? Now Brexit has actually happened and there was barely a ripple in the markets. The coronavirus gained much more attention that day.

Of course, there is a Brexit implementation period which will last the rest of 2020. During that time agreements will be negotiated. Much like we negotiated with China on trade all last year. Last year, those negotiations were affecting the markets. The point is that the markets tend to respond to the new headlines. We are barely one-tenth of the way through 2020 and we have had plenty of those headlines already. With a Presidential election this year, we guarantee plenty more.

Scott Robinson, Gateway Mortgage Group


New versions of the FICO score are coming, but that doesn’t necessarily mean you’ll have a harder time getting a loan. Fair Isaac Corp., which creates the widely-used FICO scores, will roll out two new credit scores this summer. The changes FICO has made to its credit-scoring model could mean a bigger gap between consumers with good credit and those with poor credit. People who already have high FICO scores will likely get an even better credit score under the new system, and people who struggle to pay lenders on time will see more significant declines in their scores than under previous versions of FICO, The Wall Street Journal reported. But even if consumers get a lower numerical score with the FICO Score 10, that may not prevent them from getting an affordable loan. That’s because lenders use a wide variety of credit-score models to make decisions on whether to provide a loan to a prospective borrower. For example, residential lenders using the Fair Isaac score follow a “classic FICO” model required by Fannie Mae and Freddie Mac. That can’t change without approval from the Federal Housing Finance Agency, which can take a longer period of time. Source: MarketWatch

New data from Black Knight revealed that 9.4 million homeowners are refi-eligible right now as interest rates just hit their lowest level in three months. “We remain in an environment where even slight changes in interest rates – in either direction – can have an outsized impact on the number of refinance candidates,” Black Knight explained in its report. In mid-January, Freddie Mac reported the 30-year fixed rate home loan rate fell to 3.6% – its lowest level in three months and only about 0.25% above all-time lows. This pushed the population of high-quality refinance candidates to approximately 9.4 million. Black Knight defines refinance candidates as 30-year home loan holders with a maximum 80% loan-to-value ratio and credit scores of 720 or higher, who could shave at least 0.75% off their current first lien rate by refinancing. We might just see that refi boom continue through 2020 if rates remain at these lows. Source: Rise and Shred

The housing recovery added $11.3 trillion to US housing values during the last decade, according to a new report by Zillow. The total value of every home in the US is now $33.6 trillion, nearly as much as the combined GDP of the world’s two largest economies – the US ($20.5 trillion) and China ($13.6 trillion). The $11.3 trillion in value added to the housing market since 2010 represents a more than 50% increase, according to Zillow. About 14% of that gain came from new stock entering the market, while the rest represents increased values of existing stock. “In 2010, Americans were grappling with falling home values, unsold subdivisions, and sky-high foreclosure rates, while policymakers were working to stimulate demand,” said Jeff Tucker, economist at Zillow. “A decade later, we’re facing a very different set of challenges, as a persistent shortage of new homes and starter homes has kept home prices rising.” Source: Mortgage Professional America