Tax Reform Could Deliver a Tax Hike for Homeowners: New Research

Washington, D.C. – May 18, 2017 (PRNewswire) While tax reform proposals swirling around Washington, D.C., promise lower tax bills for American families, new estimates indicate that many middle-income homeowners may actually see a tax increase if those proposals go through.

NAR logo

The study, “Impact of Tax Reform Options on Owner-Occupied Housing,” illustrates the effects of a tax plan that echoes certain elements of the “Better Way for Tax Reform” or “Blueprint” proposal released last year, as well as the White House tax reform outline released in April, to which the National Association of Realtors® responded.

While most individuals would see a tax decrease under such a proposal, the study estimates that many middle-class homeowners could in fact see a net average tax increase. Homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815. The study also estimates that combined tax savings from claiming the mortgage interest deduction and real estate property tax deductions would drop 82 percent between the 2018 and 2027 period.

“Tax reform and lower rates are worthy goals, but only if we can achieve them in a fiscally responsible way,” said NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties. “Balancing tax reform on the backs of homeowners isn’t an option.”

The study, which was commissioned by NAR and prepared by PwC (PricewaterhouseCoopers), estimates that this tax increase would result from the interaction of several provisions in the reforms under consideration. For many homeowners that currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction. For others, the elimination of the state and local tax deduction alone would result in higher federal income taxes.

In addition to increasing taxes on many middle-income homeowners, the report finds that such a proposal could cause home values to fall by an average of more than 10 percent in the near term. In areas with higher property taxes or state income taxes, the drop could be even greater. Although the study doesn’t directly analyze the “Better Way for Tax Reform” plan or the recent White House outline, it examines a proposal with many similar elements.

Those elements include lowering and consolidating marginal tax rates to only three rates, setting a top income tax rate of 33 percent, doubling the standard deduction, eliminating all itemized deductions (other than charitable contributions and mortgage interest) and personal exemptions, eliminating the alternative minimum tax, and capping the tax rate on pass-through business income at 25 percent.

PwC estimated that roughly 35 million households will claim the mortgage interest deduction in 2018, three quarters of which have incomes between $50,000 and $200,000. According to NAR, roughly 70 percent of those eligible for the MID claim it in a given tax year.

“A tax reform proposal that hikes taxes for homeowners is a raw deal, and consumers know it,” said Brown. “Leaders in Washington who are driving tax reform have shown every indication that they have the best of intentions, and we’re hopeful they’ll consider our study as this process plays out in the months ahead.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Video” tab on the website.

Voice for Real Estate – Tax Reform, Selling Solar

NAR President-elect Elizabeth Mendenhall was on Capitol Hill to reinforce REALTORS’ position that any tax reform must protect, not hurt, homeowners. NAR has concerns with the Administration’s proposal because it would hurt homeowners by taking away more deductions than would be offset by the increase in the standard deduction. Also, NAR legal and sustainability staff explain the opportunities and hurdles to selling the increasing number of homes with solar panels.

Millennial Homeowners’ Advice to Peers: Get off the Sidelines

Charlotte, NC – April 12, 2017 (BUSINESS WIRE) Forward-thinking millennials are buying homes – and they are happy about it. While “dreamers” reported last year that they wanted to skip the starter home, Bank of America’s second annual Homebuyer Insights Report revealed that millennials who have taken the plunge into homeownership are buying the house they can afford now and looking ahead to their ideal home in the future. In fact, a large majority (68 percent) of millennial homeowners say their current home is a “stepping stone” to their forever home.

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“After years of seeing millennials sit on the sidelines, it’s clear some are recognizing it might not make sense to wait,” said D. Steve Boland, Consumer Lending executive for Bank of America. “We talk to younger buyers every day about homeownership, and they understand the benefits it can have on their long-term finances. They’re excited to get started but are taking a thoughtful approach by improving their credit and building their savings.”

Millennial homeowners are confident they made the right decision in buying. Nearly 80 percent report homeownership has had a positive impact on their long-term financial picture. A similar number (86 percent) believe owning a home is more affordable than renting. This is in sharp contrast to those consumers who have not yet purchased a home, as they are split on what’s more affordable: 54 percent say owning, compared to 45 percent who say renting.

In further defining homeownership, these 18- to 34-year-old owners are more likely than any other generation to associate it with adulthood (39 percent), and least likely to define it as the American dream (16 percent) and permanence (11 percent).

When looking back at their homebuying experience, current owners across generations would tell their younger selves to start saving sooner (60 percent), consider the maintenance costs and unexpected expenses (42 percent), and create and stick to a budget (35 percent). Twenty-one percent say buy early to build equity.

Prospective buyers are planning, but not pulling the trigger yet

While they are juggling a variety of financial priorities, including paying off debts and bills (61 percent), improving credit scores (47 percent) and paying off student loans (32 percent), nearly one in four prospective buyers see homeownership on the horizon, saying they will purchase their first home within the next two years. Furthermore, 35 percent say they have started to plan for a down payment.

Almost half of first-time buyers believe they need 20 percent or more of a home’s price for a down payment, which may be why just 21 percent think they can currently make one.

“Some prospective first-time homebuyers tend to believe their personal circumstances should line up perfectly, or that they need a 20 percent down payment. Yet there are many ways homebuyers can achieve responsible and sustainable homeownership much sooner than they think,” said Boland.

Experienced buyers say value of homeownership goes beyond dollars and cents

Just one-third of owners say a home’s value is determined by how much it cost to purchase. Beyond financial value, current homeowners also see clear emotional benefits of homeownership, as nearly all say they are proud of owning (95 percent) and treasure the memories they have made (91 percent). Only 21 percent say owning a home is a burden.

Furthermore, the majority (82 percent) of experienced buyers look for ways to make their current home more valuable, and 70 percent spend a lot of free time working on their home.

For additional information about the Bank of America Homebuyer Insights Report, visit www.bankofamerica.com. For information on home financing, visit www.bankofamerica.com.

Bank of America Consumer Lending

Bank of America’s Consumer Lending unit includes First Mortgage, Home Equity, Merrill Lynch Banking, and Consumer Vehicle Lending. Each business is focused on delivering a distinctive and consistent client experience through competitive product offerings, quality loan production, choice of multiple connection and delivery methods, and operational excellence based on a client’s unique attributes and relationship with us.

About the Bank of America Homebuyer Insights Report

This survey was conducted by GfK Public Communications and Social Science, using GfK’s KnowledgePanel®, which yields results that are statistically representative and projectable to the American population. The survey was conducted online January 24–February 2, 2017. A total of 4,906 adults age 18+ were surveyed, including 1,268 current homeowners and 435 prospective homeowners. In addition, an augment was conducted to achieve 300 adults in 10 local markets: Boston, Charlotte, Chicago, Dallas, Denver, Houston, Phoenix, Miami, St. Louis, and New York. The margin of sampling error for national data is +/- 3.0 percentage points.

Bank of America

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 46 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 15,900 ATMs, and award-winning online banking with approximately 34 million active accounts and nearly 22 million mobile active users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Contacts

Reporters May Contact:

Terry Francisco
(213) 345-9024
terry.h.francisco@bankofamerica.com

Kris Yamamoto
(805) 526-1910
kris.yamamoto@bankofamerica.com

U.S. Homeowners Give Record High Satisfaction Scores To Their Insurers

New York, NY – March 13, 2017 (PRNewswire-USNewswire) About one of every 15 U.S. homeowners insurance policyholders files a claim each year and these claimants are now giving insurers their highest ever satisfaction ratings, according to the Insurance Information Institute (I.I.I.).

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The J.D. Power 2017 U.S. Property Claims Satisfaction Study gives U.S. home insurers a record score of 859 (on a 1,000-point scale). The industry’s cumulative score stood at 846 in 2016. Five factors are considered when assessing policyholder satisfaction: settlement; first notice of loss; estimation process; service interaction; and repair process.

“Insurers are the nation’s economic first responders and, as such, are continually working to improve how they help Americans recover their lives and businesses in the wake of tragedy and catastrophe,” said Sean Kevelighan, president and chief executive officer (CEO) of the Insurance Information Institute (I.I.I.). “This year’s J.D. Power and Associates survey results are a clear reflection that the industry’s hard work and dedication are delivering the intended results.”

These all-time high claims satisfaction scores are even more remarkable given that incurred losses and loss-adjustment expenses for U.S. property/casualty (P/C) insurers grew by 7.6 percent year-over-year when comparing the first nine months of 2016 to the first nine months of 2015, according to an analysis developed by Dr. Steven Weisbart, the I.I.I.’s chief economist.

Incurred losses reflect the dollar amount of a home insurer’s claim payout whereas a loss adjustment expense is the sum an insurer pays for investigating and settling claims, including the cost of defending a lawsuit in court.

Moreover, Dr. Weisbart noted, catastrophe-related claims through the first nine months of 2016 were already at their highest level since 2012—the year of Superstorm Sandy—and the fourth quarter of 2016 pushed those numbers even higher after insured claim payouts from October 2016’s Hurricane Matthew.

The federal government agreed that 2016 was a volatile, and costly one, estimating 15 separate weather and climate events last year caused more than $1 billion in economic losses, not all of them insured, according to the National Oceanic and Atmospheric Administration (NOAA).

“Property and casualty insurers have redoubled their efforts to improve the settlement process and fine-tune their customer interactions, efforts that have been clearly recognized and appreciated by homeowners who experienced significant losses this past year,” J.D. Power said.

The study also noted opportunities for improvement, most notably in water-related and other complex claims that take a long time to settle and that cause significant lifestyle disruption. J.D. Power noted, “Insurers that manage to get the settlement process and customer interaction equation right in these types of disruptive and often catastrophic scenarios are those that raise the bar for the industry.”

The study is based on more than 6,600 responses from homeowner’s insurance customers, and was fielded between January and November 2016.

The I.I.I. has a full library of educational videos on its YouTube Channel. Information about I.I.I. mobile apps can be found here.

THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.

Insurance Information Institute,
110 William Street,
New York, NY 10038
(212) 346-5500
www.iii.org

Homeowners Seeking Both a High-Tech and Human-Touch Mortgage Experience, Ellie Mae 2017 Borrower Insights Survey Finds

Survey of Homeowners and Renters Reveals Preferences Among Millennials, Gen Xers and Baby Boomers; Showcases Differences Between Male and Female Borrowers

Las Vegas, NV – March 8th, 2017 (BUSINESS WIRE) Fifty-seven percent of homeowners applied for and completed their latest mortgage completely in person, while more than one-quarter of homeowners (28 percent) applied for their most recent mortgage using a combination of online and in-person interaction, according to the 2017 Borrower Insights Survey of homeowners and renters conducted by mortgage automation provider Ellie Mae® (NYSE: ELLI). Another 11 percent of homeowners applied for their latest mortgage completely online with no in-person interaction. The survey findings were announced today at the annual Ellie Mae Experience conference.

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When asked what factor would have improved the mortgage process, approximately 40 percent of homeowners indicated they would have liked a faster process with fewer delays. Twenty percent indicated that a shorter, easier to understand application would be preferable, while 11 percent asked for more communication with their lender throughout the process.

Millennials were the most likely generation of homebuyers to begin their mortgage application online and finish it with an in-person interaction with their lender (30 percent). Gen X (28 percent) and Baby Boomer (20 percent) borrowers weren’t far behind in using this online and in-person approach.

“There’s no question that technology is playing a larger role in the home buying experience,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “As we expected, many homeowners are seeking a faster and more streamlined experience. And it’s not just a millennial phenomenon; it’s homebuyers of all ages and both genders.”

“But what’s even more telling is that homeowners still want a personal interaction with their lender. They want someone who can answer important questions, and make them feel confident that everything will be handled correctly and on time. While 27 percent of millennials identified the speed of the process as the top area to improve their experience, surprisingly 23 percent cited more face-to-face interaction as the second-greatest opportunity for improvement. By leveraging technology, lenders can provide a more high tech experience to simplify and speed the overall process, while still having the high-touch interactions when and where homebuyers want,” Tyrrell said.

The Ellie Mae survey found that today’s homebuyers most value speed, security and simplicity when applying for a home loan – all of which are enabled by technology. Millennials and women were the most likely to cite security as the most important factor when they applied for a loan. Gen X and Baby Boomer buyers were more likely to value the speed of the process. All three generations equally valued simplicity.

What One Factor Was Most Important To You When Applying For A Loan Online?

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Ellie Mae’s study also revealed that, despite the abundance of online marketing by lenders, referrals remain the predominant method consumers use to select a mortgage lender. Sixty-one percent of respondents chose their last lender based on a referral from a friend or family member (23 percent), bank (17 percent), realtor (16 percent), or financial advisor (5 percent). Online search was used by 18 percent of the survey respondents. Looking at behaviors across generations, 25 percent of millennials said they selected their mortgage lender based on an online search.

More data from the Ellie Mae 2017 Borrower Insights Survey are available online at www.elliemae.com/borrower-insights.

Methodology

Ellie Mae surveyed 3,099 individuals between the ages of 18 and 70 using the Qualtrics Insight Platform and a panel of homeowners and renters provided by Qualtrics panel services. The survey was fielded from December 21 – 30, 2016.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE: ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Contacts

Ellie Mae, Inc.
Erica Harvill
(925) 227-5913
Erica.harvill@elliemae.com

or

Allison+Partners
Alexandra Gardell Kreuter
(646) 428-0618
EllieMae@allisonpr.com

HouseLogic Shows Homeowners How to Organize Every Square Inch of Their Home

Washington, D.C. – Nov. 17, 2016 (PRNewswire-USNewswire) Everyone has that one drawer in their home that serves as a catchall: the junk drawer. But what if you have a junk cabinet? Or a junk room? Or what if you just can’t find space in your home to keep everything as neat and tidy as you would like? This month’s Every Square Inch! spotlight from Houselogic.com, the comprehensive website for homeowners from the National Association of Realtors®, features five articles offing advice on how to organize your home and creative ways to take advantage of underused or misused space.

HouseLogic

Here are a few tips from HouseLogic on how to make sure not a single inch of space in your home is wasted.

7 Sneaky Storage Ideas to Hide Your Clutter in Plain Sight. Even after you’ve purged your home of everything that you don’t need, want or use, somehow you still have items that don’t have an obvious storage space. Follow HouseLogic’s steps on how to get your clutter out of sight, including creating new storage under stairwells or replacing a bed’s box spring with drawers or a lift-up mattress.

When Getting Organized Goes Wrong. You want to get your house in order, but everything you do to get organized just doesn’t seem to work or stick. HouseLogic explains the most common pitfalls in which would-be organizers find themselves, such as trying to buy their way into organization by relying on expensive storage units and containers instead of taking the time to sort and discard clutter.

6 Small-Space Storage Hacks from Desperate New Yorkers. No one knows how to get the most space out of a tiny room than studio apartment dwellers. HouseLogic spoke with a Brooklynite apartment dweller for tips to banish clutter, including thinking like a spy to find secret hiding spots in your home’s nooks and crannies to store belongings.

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Now-You-See-It, Now-You-Don’t Pantry. Finding extra space in your kitchen can seem impossible, but sometimes you just need to figure out how to make use of the space that that doesn’t seem usable. Check out HouseLogic’s DIYable pull-out pantry, which can let you store canned foods and spices in the space between your refrigerator and the wall.

6 Creative Ways to Put a Shoe Organizer to Work. Of course, you can use a shoe organizer to store your flats and sandals, but did you know that they are also perfect for keeping all of your odds and ends in order? HouseLogic suggests six ways to repurpose a hanging shoe organizer, including storing and sorting computer cables, chargers and accessories, as well as creating a gift wrap storage station.

For more information on how to make your space as organized and efficient as possible, visit HouseLogic.com.

HouseLogic is a free source of information that helps consumers make smart, confident decisions about all aspects of home ownership. Made possible by Realtors®, the site helps owners get the most value and enjoyment from their existing home and helps buyers and sellers make the best deal possible.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website.

For further information contact:

Jane Dollinger
(202) 383-1042
jdollinger@realtors.org