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Spain proposes 100% tax on non-EU homebuyers to tackle housing crisis

January 14, 2025

Spain, like many other countries, is in the throes of a housing crisis — but a new plan to tax foreign homebuyers could help solve that. The country is planning to impose a 100% tax on homes bought by those who are not from the European Union.

With foreign homebuyers and mass tourism seen as contributing to the problem in Spain, Prime Minister Pedro Sanchez proposed a package of measures, which includes taxes, aimed at alleviating a shortage of homes, high rents and rising house prices across the country on Monday, Jan. 13.

Sanchez said house prices in Europe have gone up 48% over the last decade — almost twice as much as household income — which he said risks dividing society into two classes: “rich owners and poor tenants.”

The measure includes 12 housing reforms. The package includes a plan to tax tourism apartments “like a business.” It also suggests a proposal to levy a 100% tax on the value of homes bought by non-EU residents, as well as tax relief to landlords offering affordable rent and more protection for existing tenants.

The prime minister also announced plans to build more public housing and launch a program to renovate empty homes to rent out at affordable prices.

Sanchez did not provide any details on how the tax on non-EU homebuyers would work nor did he indicate when the proposals will be submitted to Parliament for approval.
US economy wows with 256,000 jobs added in December, more than expected

January 10, 2025
The U.S. economy added 256,000 jobs in December, roughly 100,000 jobs more than expected. The unemployment rate ticked down to 4.1% from November’s 4.2%.

December’s jobs figure was even higher than November’s 212,000, which experts said was skewed higher by people returning to work from strikes and hurricanes.

December’s Labor Department’s report appeared to be buoyed by a 72,000-job swing in retail trade.

In December, retail trade added 43,000 jobs, while it lost 29,000 jobs in November. Health care, government and social assistance, along with leisure and hospitality, all saw double-digit gains as well.

While the country saw a rise in unemployment earlier in 2024, the Bureau of Labor Statistics said the unemployment rate has held steady at 4.1% or 4.2% for the past seven months.

“I continue to believe that the U.S. economy is on a solid footing,” Federal Reserve Governor Christopher Waller said earlier this week. “I have seen nothing in the data or forecasts that suggests the labor market will dramatically weaken over coming months.”

Labor market weakness is what triggered the Federal Reserve to start cutting its benchmark interest rate in September, even as progress on inflation stalled. After a jumbo-sized 50-basis-point cut, the Fed made two more 25-basis-point cuts to close out the year, dropping the federal funds target range to 4.25% to 4.5%, a full percentage point below its 2024 peak.

However, as the labor market showed renewed resilience, inflation started to rise. Consumer prices rose 2.7% for the year ending in November, after rising 2.6% in October and 2.4% in September.

“This minimal further progress has led to calls to slow or stop reducing the policy rate,” Waller said Wednesday, Jan. 8. “However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate.”

In December, the Fed released its latest economic projections, which forecast just two cuts in 2025, down from the previous forecast of four. In response, interest rate expectations rose.

This week, the average rate of a 30-year mortgage hit 6.93%, the highest level since July, and nearly a full percentage point higher than when the Fed started cutting its rate in September.

Why are mortgage rates going up while the Fed is cutting rates? Watch this video.

On Thursday, Jan. 9, the probability market had the Fed holding rates steady until June. It was split on whether the Fed would do a second cut in December or hold steady at one cut for the year.

Minutes released this week from the Fed’s last meeting revealed added concern about inflation. Without naming President-elect Donald Trump or his tariff and immigration policies, the Federal Open Market Committee multiple times brought up the unknown impact those policies might have on the economy.

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes read. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”
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CFPB sues Warren Buffett-backed mortgage lender for ignoring ‘red flags’

January 8, 2025
The Consumer Financial Protection Bureau filed a lawsuit against a mortgage lender owned by Warren Buffett’s Berkshire Hathaway. The watchdog alleges Vanderbilt Mortgage and Finance steered customers to buy manufactured homes they couldn’t afford.

Vanderbilt Mortgage and Finance is a subsidiary of Clayton Homes, the nation’s largest builder of manufactured homes. Clayton Homes is a subsidiary of Berkshire Hathaway.

“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in a statement.

The lawsuit said underwriters “ignored clear and obvious red flags” that certain customers would not be able to repay their loans.

“The CFPB’s lawsuit is unfounded and untrue, and is the latest example of politically motivated, regulatory overreach,” Vanderbilt said in a statement to Straight Arrow News. “Vanderbilt Mortgage’s underwriting processes exceed the legal requirements for assessing a borrower’s ability to repay loans by considering both monthly debt-to-income ratio and residual income, while the law only requires the use of one or the other.”

“The core allegation is that Vanderbilt is using an estimate of other expenses that is too low,” said Howard Beales, formerly the director of the Federal Trade Commission’s Bureau of Consumer Protection. “Now, according to the complaint, they only use that estimate when the consumer says either they have no expenses, which is unlikely, or when Vanderbilt’s estimate is higher than what the consumer reported.”

In the lawsuit, the agency details troubled lending situations to make its case. In one instance, CFPB said Vanderbilt approved a loan to co-applicants with 33 debts in collection, insufficient assets to pay those debts and two young children. CFPB said Vanderbilt assumed unreasonably low monthly living expenses. The borrowers fell behind on payments eight months after getting their mortgage.

Vanderbilt claims CFPB looked at tens of thousands of loans and identified “less than 0.8 percent” that may have raised flags. CFPB did not detail a percentage in its lawsuit.

“I didn’t see anything in the complaint that would have led me to bring this case,” said Beales, who now serves as professor emeritus of Strategic Management and Public Policy at George Washington University. “Bad actors have much higher rates of bad loans than that. Default rates in the subprime mortgage crisis were 20% and 30%, 0.8% is nothing.”

Manufactured homes accounted for around 11% of new home builds in 2022, according to the Manufactured Housing Institute, a trade group in the space. The average household income for buyers was $35,000, while the average price of a manufactured home was just over $127,000, not accounting for the price of the lot it sits on.

“The population that’s interested in buying manufactured housing is likely to be lower income and higher risk than the population of people who buy stick-built houses, and that’s going to lead to higher interest rates simply because of the credit risk,” Beales said. “And in fact, the essence of the CFPB charge here seems to be these loans were too cheap. They should have charged more or not made them at all.”

Clayton Homes and Vanderbilt previously received negative attention for lending practices in 2015. A report from The Seattle Times found the company targeted minority customers and charged them higher interest rates than similarly qualified white borrowers.

At that time, Buffett said he wasn’t going to make any apologies for the manufactured home’s lending practices.

“Clayton follows a pattern that actually is exemplary and rather extraordinary,” Buffett said in 2015. “We have no interest in selling anybody a house and having the mortgage default because it is a net loss to us, is a net loss to the customer.”

In 2016, a group of Democratic lawmakers wrote a letter to then-Attorney General Loretta Lynch and then-CFPB Director Richard Cordray asking their respective agencies to investigate Clayton Homes’ lending practices.

In this current lawsuit, CFPB is asking the court to stop Vanderbilt from making allegedly bad loans and pay civil penalties.
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Why mortgage rates are going up while the Fed is cutting rates

January 7, 2025
Prospective home buyers who thought the Federal Reserve’s rate-cutting cycle would relieve high mortgage rates were in for a rude awakening in 2024. Since the date of the Fed’s first cut in September, the rate on a 30-year fixed mortgage has gone up nearly a full percentage point, even though the Fed has cut two more times since then.

The average 30-year fixed mortgage rate started 2025 at 6.91%, up from 6.09% when the Fed first cut in September, according to Freddie Mac.

“People have been saying, ‘Look, I’ll wait until the Fed cuts interest rates and then I’ll get a better mortgage rate. And we’ve seen exactly the opposite,” Bright MLS Chief Economist Lisa Sturtevant told Straight Arrow News.

Sturtevant said a key reason for this phenomenon is the mortgage market is reacting to expectations as opposed to actions.

“Mortgage rates had been following from the beginning of July all the way through the rate cut in September – the Fed had been telegraphing that they were going to do that rate cut in September – so it was already baked in,” she explained.

I think we are in a new normal where the mid-sixes is going to be a good mortgage rate.
Lisa Sturtevant, Bright MLS Chief Economist

But although the Fed would proceed to cut rates two more times before the end of the year, the committee signaled in December that they were less optimistic about the inflation track in 2025. They downgraded their forecast from four cuts in 2025 to just two.

“So mortgage rates rose on account of that information, as opposed to the rate cut itself,” Sturtevant said.

While many homeowners jumped on the opportunity to lock in a rate of around 6% in September, many more missed the boat. Sturtevant said those homeowner hopefuls will be ready to act quickly with any downward movement. But will rates only rise from here?

“I don’t think we’re going to get to 8% for sure,” Sturtevant said, responding to reports warning of that possibility. “I think we are in a new normal where the mid-sixes is going to be a good mortgage rate. And for some people, that’s hard to swallow, since during the pandemic, we saw rates down around 3%.

“But actually, over the last 50 years, the average rate on a 30-year fixed has been about 7.5%,” she continued. “So we’re not high by historical standards. We’re just high by what people had come to expect during the pandemic.”

The average 30-year fixed mortgage rate bottomed out at around 2.65% in January 2021. The post-pandemic peak hit 7.79% in October 2023.

Mortgage rates are more closely tied to the 10-year Treasury, which is a more reliable indicator to consider when predicting where mortgage rates are heading.

“We spent a lot of time wringing our hands and thinking about what the Federal Reserve is going to do, but the Fed is reacting to economic data, and that is what we should be looking at when we want to think about where mortgage rates are headed,” Sturtevant said.

Sturtevant recommended paying attention to the 10-year Treasury, inflation, the labor market and consumer confidence.
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Biden administration bans medical debt from credit reports

January 7, 2025
With less than two weeks left until President Joe Biden leaves office, his administration announced a new rule Tuesday, Jan. 7, that could lift the credit scores of millions of Americans. The finalized rule will not only stop medical debt from being included on credit reports, it will also ban lenders from using certain medical information in loan decisions.

The rule comes despite objections from the banking and consumer data industries and will eliminate an estimated $49 billion in medical bills from the credit reports of about 15 million Americans, according to the Consumer Financial Protection Bureau.

The rule also bans lenders from using medical devices like wheelchairs or prosthetic limbs as collateral for loans and bars lenders from repossessing the devices if patients aren’t able to repay the loans.

Lenders will still be able to consider medical information in certain situations, like when the loan would be used to pay health expenses or if a person asks for a temporary postponement of loan payments for medical reasons.

Today, the CFPB finalized a rule that will remove an estimated $49 billion in medical bills remaining on the credit reports of about 15 million Americans.https://t.co/PeCoLAeQSH
— consumerfinance.gov (@CFPB) January 7, 2025

The CFPB says the measure will boost the credit scores of people with medical debt by 20 points on average. It’s also expected to lead to the approval of 22,000 additional mortgages a year.

The rule would take effect 60 days after it’s published in the federal register. However, the incoming Trump administration could undo the new rule because Congress has the opportunity to review and rescind final rules. President-elect Donald Trump is set to be inaugurated on Jan. 20.
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Prospective home buyers start 2025 with ‘stale’ housing market

January 2, 2025
Home buyers started the new year with a “stale” housing market. A new report shows that while there’s a surplus of homes, many buyers deem them unappealing.

Redfin, a residential real estate broker, reported that the number of homes for sale in November hit the highest level since 2020. However, Redfin said a major reason for the increase in supply is “a pileup of unsold homes, many of which buyers have deemed undesirable.”

Nationally, more than half of November home listings (54.5%) sat on the market for at least 60 days without a buyer willing to sign a contract. That’s the highest percentage since November 2019.

According to the report, the average home spent 43 days on the market.

Real estate agent Meme Loggins of Portland, Oregon, called many listings “stale and uninhabitable.” She said price is also a key factor.

Loggins said homes that are priced well and in good condition sell within three to five days. Overpriced and outdated homes sit on the market for months, she said.

Big cities in Florida hit hard by hurricanes and marred by high insurance costs were listed as having “stale inventory”. Major cities in Texas, including Austin and San Antonio, also made the top of the list.

Mortgage rates are another factor driving up the cost of owning a home. As of Thursday, Jan. 2, the rate for a 30-year fixed-rate mortgage was about 6.7%. A 15-year fixed rate was 6.1%
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Real estate platform lets homebuyers search neighbors’ political leanings

December 18, 2024
Would you want to know your potential neighbor’s political views before deciding to buy a house? A new real estate platform is making that idea a reality. Oyssey lets buyers access a neighborhood’s political affiliations based on election results and campaign contributions.

The company’s CEO Huw Nierenberg told Axios the feature gives users access to data that’s never been available on other platforms. In return, agents are able to negotiate higher commissions.

He said during a house tour, buyers often shift from asking about details of the house to questions concerning the area and people who live nearby.

A recent survey by Redfin shows why political information can be relevant before buying a house. Nearly 20% of people said they’ve had a disagreement with their neighbors over politics.

Around 30% of respondents said they regularly talked about politics with their neighbors.

Oyssey also provides other local demographic data including information on age, education and income of potential neighbors. You can even find how many dogs live in your neighborhood.

When it comes to access, Oyssey is available to real estate agents and brokers through a subscription model. Buyers can use the platform for free by invitation from their agents.

Currently, the platform is soft-launching in south Florida and New York City.

It’s not clear if there are plans for expansion in other parts of the United States.
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San Francisco has highest rate of million-dollar jobs in US: Report

December 13, 2024
Where are the most million-dollar jobs in the U.S.? They’re not in New York, nor Los Angeles, but in San Francisco and the surrounding Bay Area.

The Bay Area leads in offering the biggest share of high-salary jobs, offering the largest percentage of jobs of any city making $500,000 or more per year, $1 million or more per year and $2 million or more per year. That’s according to new data from the payroll company ADP.

About 1 in every 185 jobs in the Bay Area, about one-half of one percent, pay $1 million or more. That’s a ways ahead of second-place Naples, Florida, where the rate is 1 in every 313 jobs.

Both are well above the national average. Across America, 1 in every 455 jobs pays $1 million or more each year.

Why San Francisco? The short answer is tech.

The Bay Area is heavily reliant on tech jobs and a global hub for both tech’s top employees and companies.

The report noted that tech employees, particularly engineers and executives, can command high salaries from companies. Unlike other high-paying jobs like doctors and lawyers, tech employees don’t have their income limited to how many patients or clients they see.

Beyond the tech industry’s dominance, researchers found two other factors at play. And both relate to the city’s cost of living.

Part of why high earners make up such a large share of the population and San Francisco is a major spike in the cost of living there in recent decades.

Home prices in San Francisco itself have more than doubled since 2012, with the average rising from about $700,000 to $1.65 million. Those prices are growing at a considerably higher rate than home prices nationwide.

Both that and the rise of remote work have pushed lower- and middle-income people elsewhere.

It’s created a big gap between the rental market and the housing market. Data from Zillow and Apartment List shows that in both the San Francisco Bay Area and in neighboring San Jose, it’s now roughly twice as expensive to buy a home at the median home price than it is to rent for 20 years. Nationwide on average, those two options cost about the same.

With fewer lower-income people moving in, million-dollar earners now make up a bigger chunk of the population.
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Zillow offers look inside Santa’s home at North Pole

December 11, 2024
Home for the holidays. It’s what many of us are dreaming about this time of the year, and Zillow is giving everyone the chance to visit one special home: Santa’s.

First, here are some new numbers before we get to the tour. AAA estimates a record 119.3 million people will travel 50 miles or more over the year-end holiday period from Dec. 21 to Jan. 1, according to its forecast released Wednesday, Dec. 11.

Nearly 90% of holiday travelers are hitting the road this year, representing roughly 107 million people expected to hop in their cars. Meanwhile, nearly 8 million passengers will take to the skies.

That number may or may not include travel by reindeer, the transportation of choice for one famous jolly fellow. Yes, we’re talking about Santa Claus.

Santa will leave his North Pole storybook home on Christmas Eve to fly around the world. As we prepare to embark on our trips home, Santa is letting us tour his home, courtesy of Zillow.

The real estate website is once again presents “Santa’s House,” a virtual tour of ol’ St. Nick’s 2,000-plus square foot cabin on 25 acres worth an estimated $1.2 million.

Zillow said this is its most visited off-market home listing, already viewed more than 3 million times.

Inside, you’ll find the kitchen where Santa, Mrs. Claus and the elves bake Christmas cookies. The open-concept living room includes a Christmas tree and fireplace –– with a fire, so delightful.

Moving upstairs, a guest bedroom has been transformed into a gift-wrapping room, which is a necessity for this home. And to prove this is indeed Kris Kringle’s abode, there’s Santa’s mail room where he reads every letter sent by boys and girls from all over the world.

This year, the listing includes a feature called “Let Santa Know You Moved.” Kids (and their parents) who have recently relocated can let Santa know their family’s new address. That way, Rudolph and the gang will have no trouble finding them on Christmas Eve.

Of course, if you want to track Santa’s moves once he leaves his home on his global journey, NORAD’s Santa Tracker will return on Dec. 24.
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Macy’s activist investor may be ‘most truthful’ about retailer’s future

December 10, 2024
Macy’s is facing off with an activist investor for the fourth time in a decade. Activist investment firm Barington Capital and private equity firm Thor Equities say the company needs to cut spending, expand luxury brands and leverage its real estate portfolio.

The investors say the real estate Macy’s sits on is worth as much as $9 billion, nearly twice the company’s current valuation. They suggest Macy’s create a subsidiary that would charge rent to its parent company. That subsidiary could also sell space to hotel, apartment or office developers.

“They may be the ones in the room that are being the most truthful with Macy’s,” said Doug Stephens, founder and president of Retail Prophet. “Because the fact of the matter is, I don’t really think that Macy’s has had a retail strategy in decades.”

Macy’s real estate has often been a topic of discussion. In 2021, Macy’s unveiled a proposal to build a 900-foot skyscraper on top of its iconic Herald Square location in New York City.

“I think that these activist investors have simply called that out and said, ‘Look, if you guys aren’t a retailer and you have these real estate holdings, then you need to start taking those holdings seriously and begin leveraging that,’” Stephens said. “You can only do so many stock buybacks and leverage your real estate holdings so many times before the floor sort of falls out of that.”

In response to the deck presented by Barington and Thor, Macy’s said it will work with the investors.

“We will continue to act in the best interests of the Company and all Macy’s, Inc. shareholders and we look forward to engaging with our shareholders, including Barington and Thor, as we further advance our initiatives and execute toward our long-term goals,” Macy’s said in a statement Monday, Dec. 10.

Macy’s has 720 stores, including Bloomingdale’s and Bluemercury locations. The department store closed more than 100 locations over the last 10 years, according to data provided by Barington.

Macy’s struggles continued this year. The company’s sales fell 2.4% in the third quarter. That earnings report was delayed as Macy’s dealt with the fallout of an employee hiding up to $154 million in expenses.

According to Barington, department stores have been decimated as e-commerce takes a growing chunk of retail sales. Meanwhile, off-price retailers like TJ Maxx and Ross are also taking a big bite out of business. Since the turn of the millennium, department stores have seen their sales cut roughly in half.

“I still hold onto the belief that there is a place for the department store, but we have to stop calling them department stores,” Stephens said.

Macy’s valuation fell by $15 billion over the last decade while the stock sank by 70%. The struggles have put Macy’s in the crosshairs of four activist investors over the last 10 years, according to CNBC. It also received a buyout offer in December 2023.

Watch the interview in the video above for what Stephens says Macy’s should do with its retail stores.
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