Photo credit: Joint Center for Housing Studies of Harvard University
Signs Point to Recovery
All signs point to a strong rebound for home improvement activity in 2013, according to the Leading Indicator of Remodeling Activity from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Robust spending in the second half of 2012 suggests the remodeling recovery is already underway, and the LIRA projects annual homeowner improvement spending will see accelerating double-digit growth through the third quarter of 2013. “The solid momentum behind home building activity, existing home sales, low financing costs and remodeling contractor sentiment all point to a solid start to the new year for home improvement spending,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center.
25C Energy Tax Credit Revived
The revival of the 25C energy tax credit went almost unnoticed in Congress’s “fiscal cliff” legislation, H.R. 8, the American Taxpayer Relief Act of 2012. The energy tax credit was extended through the end of 2013 and made retroactive to products installed in 2012. It had previously expired at the end of 2011. Applied to qualified energy efficiency improvements, the credit is capped at 10 percent of the product cost with a $500 lifetime limit. Improvements include insulation, windows, doors and skylights as well as specified solar, wind, geothermal and HVAC installations. For details, see IRS Form 5695.
Americans Expect Growth in Home Prices
Consumer confidence in the housing sector grew in December, marked by continued positive attitudes toward home price, rental price, and mortgage rate expectations, according to Fannie Mae's National Housing Survey results. The growing belief held by Americans that these housing indicators will climb in 2013 may inspire a boost in home purchase activity during the coming months. However, while consumers seem confident that housing activity is on the rise, their outlook toward the economy and personal finances appears to have resumed a more unsettled trend following a show of optimism in November, according to Fannie Mae.
20.6 Million Homes Free of Mortgage Debt
Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow analysis of mortgage data. A number of elements influence the percentage of free-and-clear homeowners in a given area, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly.
BPI Launches New Certificate
The Building Performance Institute, Inc. has launched its Building Science Principles (BSP) Certificate of Knowledge and companion Reference Guide, responding to strong demand for a method of verifying basic building science knowledge in the home performance and energy efficiency retrofit fields. The certificate is designed for home inspectors, appraisers, realtors, educators and program managers in government and utility energy efficiency programs. Earning the BSP certificate is based on passing a 100-question online exam that verifies a basic knowledge of building science. For information, go to: bpi.org/certificate
List of Improving Housing Markets Expands
In the latest sign of a burgeoning recovery in U.S. housing markets, the number of metropolitan areas on the National Association of Home Builders/First American Improving Markets Index rose for a fifth consecutive month to 242 in January. This is up from 201 markets listed as improving in December, and includes entrants from 48 states and the District of Columbia.
Housing Starts Up 12 Percent
Solid gains in both single-family and multifamily housing production resulted in nationwide housing starts rising 12.1 percent to a seasonally adjusted annual rate of 954,000 units in December, according to data from the U.S. Commerce Department. This is the highest level of new home production since June of 2008.