Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Fri, Apr 24 1992 Date: Fri, 24 Apr 92 05:26:46 EDT Message-ID: 04-24 0000 DECISIONLINE: Real Estate USA TODAY Update April 24-26, 1992 Source: USA TODAY:Gannett National Information Network HOME OWNERSHIP UNLIKELY TO RISE: Despite the recent surge in first-time homebuyers, the USA's declining rate of home ownership isn't likely to reverse, say industry experts. Prices and interest rates have dropped recently, but are still higher than in the early 1970s, say experts. The income of young renters is also down, and there is less benefit in itemizing deductions; many young adults don't itemize. (For more, see special Trend package below.) FIRMS OFFER OWN TAX CREDITS: Although President Bush's proposed $5,000 tax credit for first-time home buyers has failed, some some brokers and builders are offering their own incentives. Glenville Associates, a Greenwich, Conn.-based builder, is offering first-time buyers a $5,000 reduction in the price of a new townhouse. In return, buyers agree to hand over their $5,000 tax credit when and if they receive it. LANDFILL RECLAMATION GROWING: Joining a growing number of cities excavating landfills and reusing the sites, Edinburg, N.Y., is reclaiming its landfill, possibly to use the property for park land. The cost of reclamation: About $125,000 per acre, roughly the same as for closing a landfill, but minus the long-term liability risk. By extending landfill life, experts hope to delay locating new sites. PROVIDENCE MAYOR OFFERS PLAN: Providence, R.I., Mayor Vincent Cianci Jr. unveiled a six-point plan Thursday aimed at revitalizing the city. Under the plan, a part of the city's $100 million housing fund would be set aside for for middle-income homeowners. Other aims include increasing the number of jobs and improving schools and neighborhoods. S.C. HOPES TO LURE BMW PLANT: South Carolina's Senate has approved one part of a three-part, $35 million economic incentive package in the hopes of luring BMW to build an auto manufacturing plant in the state. The other two provisions, totaling $10 million, are pending in the Legislature. BMW is reportedly looking at sites in the Greenville-Spartanburg area and in Nebraska. BILL SEEKS TO STOP POWER LINE: Rep. Nick Rahall, D-W.Va., will unveil a bill next week seeking protection for a 17-mile stretch of New River. The bill would block a proposed Appalachian Power Co. 750,000-volt line that would carry electricity from Appalachian Power's Oceana plant to Cloverdale, Va. FIXED-RATE MORTGAGES STABLE: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 8.76 Thursday, unchanged from Wednesday but down from 8.84% the week before. They were at 9.47% a year ago. For 30-year adjustable-rate mortgages, the rates were 6.11%, unchanged from Wednesday but down from 6.15% the week before. A year ago they were at 7.37%. ARM INDEXES UNCHANGED: The one-year Treasury ARM index rates were listed at 4.14% Thursday, unchanged from Wednesday but down from 4.25% the week before. A year ago they were at 6.26%. For the 11th District ARM index, rates were at 5.800%, unchanged from Wednesday and unchanged also from the week before. A year ago they were at 7.848%. T-BONDS RISE: Treasury security rates for the 30-year bonds showed an increase Thursday, listing at 8.04%. That's up 0.01 from rates of 8.03% Wednesday and up 0.11 from 7.93% the week before. A year ago T-bonds were at 8.24%. SPECIAL PACKAGE ON TREND: RICES, INTEREST RATES TO BLAME: The typical starter home sells for nearly 13% more than it did in 1973, adjusting for inflation, says the Harvard University-based Joint Center for Housing Studies. And although below the peaks of the early 1980s, interest rates are higher than in the early 1970s. Young renters' income has fallen nearly 5% since 1973, and typical first-time buyers now spend 31% of their earnings on payments. THE OUTLOOK IS GRIM: The next 10 years will see baby boomers hit the trade-up market "with a vengeance," says James Brown, director of the Harvard-based Joint Center for Housing Studies, and that won't go smoothly without more first-time buyers. One solution is to remove excess regulation, says Robert Buchert, president of the National Association of Home Builders. CODES HAVE STYMIED BUILDING: Tougher building codes have been used to keep starter homes from being built in communities, says Buchert. Code changes have added as much as 25% to the cost of a new home in some areas, says a presidential commission on affordable housing. Lenders should offer alternative credit histories for those without debt records, says Mark Goldhaber, a vice president of GE Capital Mortgage. CHEAPER HOMES ARE NEEDED: Cutting the federal deficit would lower interest rates, says Roger Schipke, chairman of Ryland Group, a Columbia, Md.-based home builder. A percentage-point rise in mortgage rates drives at least 350,000 potential buyers from the market, he says. Building cheaper entry-level homes is the key, says Brown of the joint center. Without that, he says, other steps are "relatively trivial." (End of package.) Real Estate Editor: Christopher Goldthwaite. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. 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