Renter Population Outpacing Owners

Realtor Magazine recently carried an interesting piece asking, “Is it still a good time to be a landlord?” In the article they report data showing that the renter population in the nation’s largest cities are outpacing owners. The data was taken from RentCafe, which is an apartment and house rental listing company.  They compared U.S. Census data from 2006 – 2016. The data included some of the following points of interest:

  • The number of renters has increased by more than 23 million and homeowners by less than 700,000
  • Rentership growth has outpaced homeownership in 97 of the 100 largest cities
  • From 2007 to 2015, the renter population has been growing faster than the owner population.
  • However, in 2010, the gap started to show signs of closing. By 2016, the trend started looking more similar to what it did prior to the recession.

Below find the specific data provided for Milwaukee:
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Home Sales Up In Greater Milwaukee

Earlier this week the Greater Milwaukee Association of Realtors reported home sales and other data for the Greater (4 County) Milwaukee area.  Some of the key points included the following:

  • Home sales for December were up 1.5%
  • Home sales for 2017 were up 1.7%
  • 2017 was the best sales year since 2005
  • 2017 finished 1.3% ahead of 2016 in properties listed for sale
  • Although listings continue to be “desperately low”

For a few more relevant data points please reference this GMAR chart that accompanied their recent analysis of the local market.

New Programs Might Benefit Smaller Investors

National Real Estate Investor recently reported that Fannie Mae and Freddie Mac are initiating programs which provide long-term financing for smaller investors in single family home rentals.

As investors consolidate their portfolios, agency lenders are there to help. Fannie Mae and Freddie Mac have both announced programs that provide long-term financing at competitive interest rates to help investors refinance and acquire SFR properties—in some cases potentially building up portfolios large enough to attract the interest of the largest companies, like Invitation Homes or American Homes 4 Rent.

Investors of all sizes have been expanding their portfolios of single family rentals recently and the newly announced programs from Fannie and Freddie are likely to help drive that trend forward.  Some experts cited in the National Real Estate Investor article refer to the programs as a “game changer” because among other things, they allow owners of smaller portfolios to find financing with competitive fixed interest rates and terms as long as 10 years.  Previously these kinds of investors had to rely on bank loans with shorter terms and higher interest rates.

The New York Times reported last year that “Freddie Mac wants to provide tens of millions of dollars in financing to midsize landlords…”

In all, Freddie Mac could provide up to $1 billion in financing or loan guarantees to smaller firms that buy single-family homes and operate them as what it considers affordable-housing rentals, a company official said in an interview. Some nonprofit housing groups might also be eligible for financing.

If you are a smaller to mid-size real estate investor that is interested in single family homes, perhaps you should investigate these new programs more closely to see if they fit your situation and help you reach your goals.

Top Home Improvements That Pay Off

When clients prepare to sell their home, it is always good to assess the kind of improvements that they might make before putting it on the market.  Improvements can help speed up the sale and garner a higher purchase price.

Popular home features change just like all other trends, so it is important to invest in upgrades that will most likely move a buyer today.  Many of the home improvements that were common in the 1990’s for example are simply a waste of money today.

So what are the top home improvements that pay off in the current market? A story on this very topic recently ran on  The authors looked at the most common features in listings and how long those properties took to sell.  They determined that the quicker a property sold, the more in demand its features were.

After crunching all of the numbers, they came up with the following list of top home improvements:

1. Smart home features (such as smart thermostats, refrigerators, and locking systems)
2. Finished basements
3. Patios
4. Walk-in closets
5. Granite countertops
6. Eat-in kitchens
7. Hardwood floors
8. Laundry rooms
9. Open kitchens
10. Front porches
11. Dining rooms
12. Energy Star appliances
13. Two-car garages
14. Fireplaces
15. Security systems


New Tax Bill And Home Ownership

With today’s final passage of the tax bill in Congress, people are wondering what it means to them on a practical level, current and potential homeowners are certainly no exception.  Below I’ve provided some of those details as reported today from the Washington Post and the National Association of Realtors.

Washington Post

  • The new law increases the standard deduction to $12,000 for single filers and $24,000 for joint filers.
  • The new law caps the limit on deductible mortgage debt at $750,000 for loans taken out after Dec. 14.
  • The new law limits the property tax deduction to $10,000.
  • Home sellers can exclude up to $500,000 for joint filers or $250,000 for single filers for capital gains when selling a primary home as long as the homeowner has lived in the residence for two of the past five years.
  • The law eliminates the moving expense deduction except for members of the military.

National Association of Realtors

  • The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
  • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
  • The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
  • The final bill provides a deduction only if a casualty loss is attributable to a presidentially-declared disaster.
  • The final bill retains the current Section 1031 Like Kind Exchange rules for real property. It repeals the use of Section 1031 for personal property, such as art work, auto fleets, heavy equipment, etc.