HousingWire's Monday Morning Cup of Coffee takes a look at news from the weekend, with more coverage on bigger issues.
With existing home prices up 10% in February from one year prior and inventories at a 20-year low, many homebuyers are facing a dilemma, according to an article in the Wall Street Journal: paying more for a home today, compared with a year ago, or paying even more tomorrow at a time when interest rates might also be higher.
For many buyers looking to get into their first home, high unemployment, low savings, high debt loads and tight credit standards are making homeownership nearly impossible.
Many experts are concerned that if prices keep rising at their current pace, an affordability problem may arise — especially once rates reach above 6%.
Budget cuts due to the federal sequester are already taking a toll on public housing, as the New Albany Housing Authority is adjusting to an 18% annual budget cut, News and Tribune reported.
According to the article, the reduction in the operating budget could lead to the merger of some NAHA offices and potentially even result in employee furloughs, reduction of services and possibly the loss of public housing units.
The NAHA Executive Director Bob Lane says this could force the housing authority to close 40 Section 8 housing units in the next few years if the federal matter isn’t resolved.
With inventories so small, homebuilders are desperate to find quality land to expand the housing inventory. However, in Dayton, Ohio, ready-to-build land is one of the biggest challenges faced by homebuilders, writes Dayton Daily News.
Homebuilding, which is expected to continue improving slowly throughout 2013, could face series issues by 2014 if this turns out to be a good year for local homebuilders.
“I think the problem will get progressively worse as we have chewed through the inventory of lots, and then it will take a little while to bring new lots online to hopefully fill a demand that should be there,” said Walt Hibner, executive director of Home Builders Association of Dayton.
According to the article, it takes time for a new development to get through the approval and financing process.
The Federal Deposit Insurance Corp. closed its fifth institution in the nation this year.
Gold Canyon Bank in Gold Canyon, Ariz., was closed by the Arizona Department of Financial Institution, which appointed the FDIC as the receiver. As a receiver for Gold Canyon Bank, the FDIC named First Scottsdale as the winning bidder to take over the failed bank’s assets.
The former Gold Canyon Bank has a single branch in Peoria. The bank’s offices will reopen under the First Scottsdale Bank name on April 8.
As of Dec. 31, 2012, Gold Canyon Bank had approximately $45.2 million in total assets and $44.2 million in total deposits.
Read the full statement here.