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.

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September 11, 2018

The Jobs Machine Rolls

Leading up to the jobs report released last week, all indications were that the good times would continue. We had an upward revision in the measure of economic growth for last quarter, consumers continue to spend, and confidence is soaring. Therefore, the markets were predicting another strong employment report, especially considering that last month’s numbers were a bit lighter than expected. Of course, each release is subject to revisions which is what makes the reports harder to interpret from month-to-month.

The number of jobs added was reported at 201,000 for August. This was higher than expected. The previous months were revised downward by 50,000. The headline number was the unemployment rate, which came in at 3.9%. This number carries more importance when looking at the labor participation rate, which measures how many people are coming back to the workforce. The rate came in at 62.7%, which was down from last month because of more individuals re-entering the work force.

The Fed will be meeting at the end of the month, and certainly these numbers will be considered when they decide whether to raise short-term interest rates. Right now, the markets are banking on another 1/4% increase, especially considering the statements recently made by the members of the Fed, including Chairman Powell. Even more important than the gain in jobs, the acceleration in wage growth reported for last month certainly supports this prediction.

Scott Robinson, Gateway Mortgage Group






An overhaul in how several major credit reporting agencies factor in negative credit information is prompting millions of consumers’ credit scores to rise. Collection events were struck from 8 million consumers’ credit reports in the 12 months ending in June. The New York Federal Reserve reported that consumers who had at least one collections account removed from their credit reports are seeing an 11-point increase to their scores. Critics have long claimed such dings to scores are prone to errors or that they’ve unfairly kept many out of the borrowing market. Equifax, Experian PLC, and TransUnion have all agreed to revamp reports, which stems from a 2015 settlement with state attorneys general on the matter. In the settlement, the firms agreed to remove some non-loan related items that were sent to collection firms, such as gym memberships, library fines, and traffic tickets. They also agreed to strike medical-debt collections that have been paid by a patient’s insurance company. The majority of consumers who benefited from the recent changes are those who had scores below 660 before the collection events were removed, according to the New York Fed. Source: The Wall Street Journal — Want to see if your score has changed? Contact us and we will help you find out and help interpret your score “picture.”

Zillow is aiming to take more ground in the rental market. Recently, the online real estate giant rolled out new online tools that allow renters to apply for multiple rentals with one application that includes a background check and eviction history through Checkr and credit reports through Experian. The new functions also allow renters to pay rent through Zillow. Yes, you heard that right. Pay rent directly through Zillow, which will then pass the funds directly along to the property manager or owner. “Renters tell us they want the entire rental process to happen online, from search to application to payment,” Zillow President Jeremy Wacksman said in a statement. “However, most landlords don’t have the resources to offer these services. We’re excited to provide the technology to help renters and landlords have a better experience.” According to Zillow, there are 35 million renters who visit Zillow’s rental sites and mobile apps each month, each of whom–if they’re not just window shopping–typically need to file about three applications with an average cost of $40 each. According to the company, these new products are part of the company’s effort to build an end-to-end solution that allows renters to complete the entire transaction using Zillow. The company said that once its rollout is complete, renters will be able to search for properties, schedule tours, apply, sign a lease and pay rent all from within Zillow itself. Source: HousingWire

Similar to the concept of rent control, Freddie Mac announced a new program to incentivize rental property owners to ease their continuous rent hikes. The housing agency is offering discounted financing to owners who agree to cap rent increases for the life of their loans. Owners who take part in the program must limit rent increases on 80 percent of their units. “Maybe there’s a way we can help change incentives,” says David Brickman, an executive vice president at Freddie Mac. “We can provide an economic basis for private, profit-oriented developers to pursue a strategy where they didn’t raise rents by quite as much.” Owners also must agree to make at least 50 percent of their units affordable to those earning the local median income or less. The program, now available across the country, is voluntary. Freddie Mac officials say they will check rents on an annual basis to make sure participating property owners are complying with the program’s rules. Those who are in violation will be assessed a penalty fee until they return rents to a level that Freddie deems compliant. The announcement comes on the heels of a recent report by RentCafé, which showed that average apartment rents reached an all-time high in July. The national average rent climbed to a record high of $1,409 in July, up 2.8 percent year over year, the rental listing service noted. Source: The New York Times