From solar technology, to sustainable building materials, to futuristic heating and cooling systems, these teams are using the latest innovations from companies across the globe, while pushing the envelope of energy efficiency with their own new ideas.

The homes are fully built and decorated, and the student teams are performing all kinds of tasks within the homes, from washing clothes to boiling water; whichever team does it all best wins.

(Watch more: Peak inside the homes of the future)

The competition, which is called the Solar Decathlon, started in 2002, occurring biannually in Washington, D.C. This year, the Department of Energy-sponsored event moved to Irvine, Calif., to bring its homes to a wider audience. Irvine is the perfect place, as new construction is booming again after a lull during the housing recession. A big emphasis in this year’s competition is affordability.

The home builders are watching, especially Lennar, which has a major development going on near the site of this year’s competition. Lennar is building homes with solar standard.

Here are some highlights of this year’s decathlon.

By CNBC’s Diana Olick; follow her on Twitter at @Diana_Olick.
CNBC’s Harriet Taylor, Stephanie Dhue, and Gennine Uliasz contributed to this slideshow.
Posted 11 Oct. 2013

Article source: https://www.cnbc.com/2013/10/11/heres-what-your-home-might-look-like-in-the-future.html

Contracts for newly built homes dipped slightly last month, and strong October numbers were revised even higher.

Article source: http://www.cnbc.com/id/101604588

“Amazon is at the forefront of a larger trend that has seen demand for well-located logistics centers, very close to major urban centers increase sharply,” said Sam Chandan of Chandan Economics. “It’s some of the best performing space that we see in commercial real estate right now, across all property types.”

Warehouses are the strongest prospect for both investment and development in 2014, according to the latest PWC Investor Survey. Two thirds of respondents deemed warehouses a “buy.”

“That’s the highest of all the real estate food groups,” said PWC partner Mitch Roschelle. “The online retailers have struggled to figure out how to get the goods closer and closer and closer to where the people live.”

As Amazon starts moving its products closer to its customers, others will likely follow suit, meaning more need for those smaller distribution centers that are closer to major metropolitan areas.

“They [Amazon] are probably the most creative and forward-looking people in this space, and seeing this type of thing doesn’t surprise me,” said Jack Cuneo, CEO of Chambers Street Properties. “It’s a great model, so you’re going to see more people emulating what they do and more need on their part for space.”

Chambers Street, a real estate investment trust based in Princeton, N.J., owns six Amazon fulfillment centers, three in the United States and three overseas. While these are larger properties, Cuneo says a system like Amazon is proposing might move the retailer out of some of the larger facilities and into smaller ones.

(Read more: Construction up, but are we building too many houses?)

Article source: http://www.cnbc.com/id/101354474

Contracts for newly built homes dipped slightly last month, and strong October numbers were revised even higher.

Article source: http://www.cnbc.com/id/101366971

That is because overall mortgage production is down. The rate jump at the start of last summer ended the refinance boom, and purchase originations are sluggish, as sales slow and all-cash buyers reign.

Total mortgage applications are down 52 percent from a year ago, according to a weekly report from the Mortgage Bankers Association. Refinance applications and purchase applications are down nearly 63 percent and over 12 percent, respectively. The average contract rate on the 30-year fixed was 4.52 percent last week, compared with 3.67 percent during the same week a year ago.

The Fed may have cut its mortgage-bond buying by $5 billion in January, but it has had no effect on rates for one simple reason.

(Read more: New home sales drop 7 percent)

“Other parties have filled the void, and then some,” said Dan Green, publisher of TheMortgageReports.com. “Mortgage bonds are rallying, and mortgage rates are dropping.”

The reason: As the stock market falls, investors head to the safety of quality assets such as bonds. Recent economic turmoil overseas has added to that movement and, consequently, to a rebound in Treasury-buying, which depresses yields. Mortgage rates generally follow the 10-year yield.

“A reduction of $10 billion or even $20 billion shouldn’t change the current situation where the Fed is buying a disproportionately high percentage of new agency MBS production,” Cecala said. “Again, the big factor is declining originations and new MBS production.”

As for any major policy changes in the mortgage market, they are unlikely at least this year.

(Read more: Real estate least sexy sector is red hot)

President Barack Obama mentioned housing just two times in his State of the Union address Tuesday. He said housing is “rebounding,” and then suggested that legislation was needed to protect taxpayers from another housing crisis. In a policy fact-sheet released during the speech, Obama reiterated his plan—first outlined last summer—to reform housing finance.

The primary reason the president is not pushing a housing agenda is that mortgage giants Fannie Mae and Freddie Mae are making money hand over fist—money that goes directly to the federal government because of its conservatorship.

It’s also just too big an issue to tackle with Congress facing midterm elections.

“The housing market is in the best shape of Obama’s presidency,” said Jed Kolko, chief economist at Trulia.com. “Construction and sales in 2013 were both at their highest levels since before he took office, and prices have bounced back to within range of their long-term norms.”

(Read more: All-cash offers crushing first-time buyers)

Kolko also noted that the president’s two main initiatives, mortgage refinancing and modifications, don’t work as well in a higher interest rate environment.

Article source: http://www.cnbc.com/id/101374459

While this securitization market is still in its infancy, a recent Wall Street estimate put potential financing opportunities for the single-family rental industry as high as $1.5 trillion. Already some members of Congress and economists are worried about another credit bubble.

“The investment and lending opportunities are immense and perhaps just beginning,” Jade Rahmani, a real estate analyst with Keefe, Bruyette Woods, wrote in a recent report.

In just the last two years, large investors have bought as many as 200,000 single-family houses and are now renting them out, according to the K.B.W. report.

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The private equity giant Blackstone Group sold the first single-family rental securitization of its kind last fall, a $479 million bond, attracting six times as many investors as the private equity firm could accept, a person involved in the deal said.

Investors like mutual funds and insurance companies bought slices of the bond, which are backed by the rental homes owned by Blackstone’s company, Invitation Homes.

The rental business is still dominated by landlords who own and manage only a handful of properties. Wall Street has found a way to finance them, too. Cerberus Capital Management and Blackstone have started businesses that lend to small-time and medium-size investors.

And there are discussions about bundling many of these small loans and securitizing them also.

“That’s the part of the business that will take off,” said Stephen D. Blevit, a lawyer at Sidley Austin. “Providing cheap financing to mom-and-pop investors who save their pennies, buy a few properties and do all the maintenance themselves.”

What the new securitization boom will mean for homeowners and renters is less clear.

Wall Street may be clamoring to lend to investors in single-family homes, but it is still difficult for millions of Americans to qualify for a mortgage. The easy financing could give investors the upper hand in bidding for homes on the market.

(Read more: From ashes of housing crisis, a new type of bond)

Representative Mark Takano, Democrat of California, whose district includes the Inland Empire just east of Los Angeles, which was hit by a tidal wave of foreclosures, has asked the House Financial Services Committee to hold hearings on the impact that single-family rental bonds could have on the housing market.

“Proper oversight of new financial innovation is key to ensuring we don’t go down the same road of the unchecked mortgage-backed security and create an unsustainable bubble that will wreak havoc when it bursts,” Mr. Takano said in a letter to the committee last week.

Securitization, however, could provide a pick-me-up to Wall Street’s mortgage machine, a once-mighty profit engine that has never fully recovered from the financial crisis. Bankers estimate that single family-rental bond deals could total as much as $7 billion this year and eventually grow to about $20 billion a year.

For landlords like American Homes 4 Rent, securitizing debt would provide them with more leverage to buy more homes. It would also increase their profits by lowering their borrowing costs.

With securitization, landlords could in theory put as little as 25 percent of equity into their properties, while borrowing the rest. Credit lines from banks typically require 40 percent equity.

Last month, economists at the Federal Reserve warned that if large landlords took on too much debt, they might feel pressure to hold fire sales of their properties, flooding the housing market with supply.

“Financial stability concerns may become more significant should debt financing become more prevalent or if the share of homes owned by investors in certain markets rises significantly further,” the Fed economists wrote.

They added that it was important to monitor the emergence of single-family rental securitization for signs that it could destabilize “financial markets.”

For now, though, companies like American Homes 4 Rent are earning their early investors big profits. Many tenants used to own the houses they are now renting from the company, said a person with knowledge of the matter.

A spokesman for the company, which owns 21,000 homes, did not return calls requesting comment.

Article source: http://www.cnbc.com/id/101376344

However, it added: “The exception is London, where limited supply and strong demand have driven price-to-income ratios and income multiples back to previous highs, signaling the potential for overheating.”

U.K. house prices rose at their fastest rate in over four years in December, according to the latest data from the U.K.-based Nationwide building society. House prices in the U.K. rose 1.4 percent in December and were 8.4 percent higher year-on-year, with the single-month increase the biggest since August 2009 with London house prices leading the trend, having risen 14.9 percent year on year.

“Prices in London are now 14 percent above their 2007 peak,” Robert Gardner, Nationwide’s chief economist said in the report, “with the price of a typical London home at £345,186 ($567,000)”

(Read more: UK house prices soar: Biggest jump in 4 years)

The report said that over the next five years, improving economic conditions — along with rising employment and support from the government’s Help to Buy scheme — will guarantee growth in demand in the housing sector, but that increased supply from house-builders will ensure that prices across the majority of the country will be contained. Thus, the report concluded, U.K. house prices will riseby an average of 6.5 percent annually over the half decade.

“House prices in most regions are still well below their previous peaks, both in real terms and in relation to average incomes,” the report stated, adding, “And household debt is at much more manageable levels than before the financial crisis.”

(Read more: UK house prices show first monthly fall since January 2013)

The stronger employment and income growth rates in London – combined with limited supply – will force the U.K. capital to buck the national trend. House prices in the capital rose by over 11 percent in 2013 and the report argued that there was evidence of this surge taking place beyond central London’s prime properties and spreading to the rest of the residential market.

“All of this marks London out as a special case demanding particular vigilance from policy makers,” the EY report argued.

It was predicted that by 2018 the average London property will be just below £600,000 ($984,000), three-and-a-half times more than the average price in Ireland, and over 3.3 times the price in the north east.

EY argued that to restrain this bubble in London, policy makers should intervene in the market with actions directed specifically at London.

“The best option would be to police income multiples in the capital while allowing market forces to hold sway in other regions,” the report stated, while the government should also implement measures that will increase the housing supply, such as planning reforms and public sector house-building.

—By CNBC’s Kiran Moodley. Follow him on Twitter
@kirancmoodley

Article source: http://www.cnbc.com/id/101383595

A rebound in home prices has slowed, so has the recovery process for those still submerged with negative equity.

Article source: http://www.cnbc.com/id/101487611

But at this stage, most bigger lenders are uncomfortable with the loans—for example, in 2011, Wells Fargo Co and Bank of America backed out of the business. Wells has cited factors including unpredictable home values and the level of delinquencies as reasons for it to stay away from reverse mortgages.

The government agency that guarantees these loans, the U.S. Federal Housing Administration, found them to be risky, too. Losses on reverse mortgages were a big reason for the agency’s $1.7 billion taxpayer bailout last year – and some experts worry it could end up in similar trouble again.

“The FHA is at risk from these loans, and the taxpayers are at risk too,” said James Bothwell, a consultant and former chief operating officer of the Federal Home Loan Bank system.

(Read more: Foreclosures fall to lowest in 7 years: Report)

The agency has made changes to its reverse mortgage program in the last year to try to make the loans safer.

“As with any mortgage product, there is risk to financing a loan, but we have made, and continue to make, significant efforts to mitigate that risk,” both when making loans and when recovering money at the end of the loan, said Melanie Roussell, a spokeswoman for U.S. Department of Housing and Urban Development. The FHA is part of the department.

What makes these loans potentially toxic for lenders and the government also makes them attractive for borrowers: a homeowner who is at least 62 years old gets a lump sum of money, a line of credit, or monthly income from their reverse mortgage, and potentially does not have to repay the loan for decades.

During those years, the loan accumulates interest, which is currently just above 5 percent for a fixed-rate loan. When it is time to pay off the loan, the home may not be worth enough to cover the debt, potentially leaving the FHA with losses.

Given that reverse mortgage lending volume is still small relative to the $9.4 trillion U.S. mortgage market, the risk to the financial system is manageable, analysts said.

Smaller Lenders

It is smaller lenders that see an opportunity in reverse mortgages, and are still convinced there is a real opportunity for growth.

“The market is huge. It’s underpenetrated,” said Denmar Dixon, chief investment officer at independent mortgage company Walter Investment Management Co at a conference in December.

Every day, 10,000 baby boomers turn 65, the traditional retirement age in the United States. And 48 percent of them report they are not on track to cover the basics in retirement, according to financial services company Fidelity.

Sixty percent have less than $100,000 in retirement savings, estimates brokerage Charles Schwab.

Walter’s larger rival, Ocwen Financial, estimates the potential size of the reverse mortgage market at $1.9 trillion, leaving a lot of room for growth from the $90 billion of these loans outstanding at the end of September.

Lenders charge high fees for making these mortgages, and then bundle them into U.S. government-guaranteed bonds that are sold to investors. The margins on selling these loans can be three to five times the margins on regular mortgages, said Don Currie, president of lender High Tech Lending. Banks can also collect fees for performing tasks like sending out account statements to borrowers.

(Read more: What happens to prices when Wall St is the landlord)

To tout the benefits of the product, reverse mortgage lenders have turned to Hollywood pitchmen. Liberty Home Equity Solutions, which Ocwen purchased in April 2013, uses Robert Wagner, star of the “Hart to Hart” television series, in its advertisements.

Commercials for Quicken Loans’ One Reverse Mortgage featured “Happy Days” star Henry Winkler. Fred Thompson, a former U.S. Senator and star on television’s Law Order series, promotes loans for American Advisors Group.

While volume for these loans is rising, traditional mortgage lending is expected to fall 37 percent in 2014 as higher rates choke off refinancing activity, according to forecasts from the Mortgage Bankers Association.

“There are lots of mortgage lenders who see declining volumes and may view (reverse mortgages) as an opportunity to increase revenues,” said David Stevens, president of the MBA and a former commissioner of the FHA.

Broadly Hurt

Loans that the FHA guaranteed were broadly hurt after the financial crisis as home prices dropped more than 30 percent nationally. But the agency suffered disproportionately big losses on reverse mortgages—these loans made up just 7 percent of the portfolio of loans the agency guaranteed, but contributed to 17 percent of the losses.

Reverse mortgages can sting lenders and guarantors because they depend so heavily on home prices for repayment.

During stable times, regular mortgages are made based on the borrower’s ability to repay, with foreclosure and sale of the home available as a backstop in case the borrower defaults.

For reverse mortgages, the collateral, namely the home, is just about all the lender can rely on. Home prices, which are still below their 2006 peaks, have been rising in the past couple of years, and economists do not see much risk of a significant drop in the near term.

Article source: http://www.cnbc.com/id/101500872

Applications for U.S. home mortgages rose last week as interest rates declined, an industry group said on Wednesday.

Article source: http://www.cnbc.com/id/101510287