Tagged: housing

There’s a David-and-Goliath story about to play out in federal court in Detroit.

Oakland County Treasurer Andrew Meisner says Fannie Mae and Freddie Mac are illegally dodging millions of dollars in taxes. The government-backed mortgage giants were created by the federal government, but they were spun off decades ago as hybrid enterprises with a policy mission and a profit motive. 

Just where Fannie and Freddie sit on the public-private spectrum is the central issue of the court case. And the court fight could be a bellwether for similar battles in other states. 

The number of home foreclosures tumbled in Michigan during the first half of the year. One analyst says that’s bad news.  

Realty Trac reports that home foreclosure filings dropped by about 20 percent during the first six months of 2011. One in 74 homes in Michigan received a foreclosure notice between January and June. 

Rick Sharga is with Realty Trac. He says continuing questions about problems with foreclosure paperwork has slowed down the number of properties being repossessed by banks. Federal and state regulators are expected to announce a deal soon clearing major lenders from intentional wrongdoing involving faulty paperwork that mistakenly evicted people current on their mortgages. 

Sharga says the delay in foreclosure filings has slowed the recovery in Michigan’s real estate market. 

 “What over 60% of buyers are looking for right now are bank owned properties or foreclosure properties.   So it might be a little of a ‘Catch-22’ here…where we need a higher inventory of these distressed properties to get the buyers off the sidelines.”  

Sharga says it may take until 2015 to clear the huge backlog of homes in the foreclosure process which will continue to be a drag on the home sale market.

Every year, the U.S. Department of Agriculture releases its estimate of how much it costs to raise a child from birth to seventeen years of age.

Here's what they found for their latest Expenditures on Children by Families report:

A middle-income family with a child born in 2010 can expect to spend about $226,920 ($286,860 if projected inflation costs are factored in) for food, shelter, and other necessities to raise that child over the next 17 years.

It represents a 2% increase from 2009, and the report also notes that, naturally, the more money you make, the more you spend on your child:

• A family earning less than $57,600 per year can expect to spend a total of $163,440 (in 2010 dollars) on a child from birth through high school.
• Similarly, parents with an income between $57,600 and $99,730 can expect to spend $226,920;
• and a family earning more than $99,730 can expect to spend $377,040.

Housing accounts for 31% of the cost for raising a child for a family with a middle income.

The USDA first released this report in 1960 when a middle-income family could have expected to spend $25,230 to raise a child (or $185,856 in 2010 dollars).

There's positive news about the nation's home prices, but that's not  the case in Detroit.  Data released by Clear Capital today suggests home sale prices nationally may be stabilizing.  Home prices lost ground through the winter months, and the latest data shows prices dropped by 2.3% in May.  

But the good news is prices being paid for repossessed homes nationally actually increased last month.   Foreclosed homes have been dragging down home sale prices, but that might be changing. 

Foreclosed homes continued to drag down Michigan home sale prices in the first quarter of the year.  Realty Trac reports nearly 32% of  homes sold in Michigan in the first three months of 2011 were repossessed homes.   

The average price for a foreclosed home was just a little more than $70 thousand.   The price is about a third less than similar homes on the market.  

 A Michigan family needs two people working full-time at minimum wage in order to afford a modest home. That’s according to a report by the National Low Income Housing Coalition. The report says, the cost of housing has risen 27% in Michigan over 11 years, but wages have not increased.

Danilo Pelletiere is with the housing coalition. He says the gap between housing prices and wages has become a problem in the state.