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Millennials Say Homeownership Is A Top Priority

Millennials are now at, or quickly approaching, the age when the average American buys their first home. And though attitudes can shift from one generation to the next, when it comes to buying a home, millennials seem to agree with their parents and grandparents. In fact, they may be even more enthusiastic about buying a home. According to one recent survey of potential home buyers, millennials consider owning a home a top priority, second only to being able to retire. Homeownership was even named a higher priority than getting married and having kids. But though they may want to pursue homeownership in the near future, they also share some of the same misconceptions about the buying process that earlier generations had. The survey found that nearly half of current renters said they believe a 20 percent down payment is required to buy a home and almost a quarter of them said they think theyâ€™ll need to have a perfect credit score before theyâ€™re qualified for a mortgage. More here.

The Simple Reason Housing Isn’t Headed For A Crash

At a glance, it might seem like home prices can only increase so much before they crash again. After all, theyâ€™ve largely recovered and are now at or above where they were just before they fell the last time. So doesnâ€™t that mean weâ€™re entering another housing bubble? Well, no. And the reason we arenâ€™t is fairly simple. According to Lawrence Yun, the National Association of Realtorsâ€™ chief economist, the difference is what is pushing home values higher. â€œThe current market conditions are fundamentally different than what we were experiencing before the recession 10 years ago,â€ Yun says. â€œMost states are reporting stable or strong market conditions, housing starts are under producing instead of over producing and we are seeing historically low foreclosure levels, indicating that people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.â€ Generally speaking, home prices have been moving up because there are more buyers than available homes for sale. And while that produces its own set of challenges, it doesnâ€™t indicate the market is headed for another crash. More here.

Housing Outlook Sees Similar Conditions Next Year

Real estate, of course, is about location. From neighborhood to neighborhood, conditions may differ. Pricier neighborhoods will have different dynamics than more affordable areas. Hot spots that offer buyers features and amenities will have different conditions than less popular areas farther from the action. Thatâ€™s why most people work with professionals when buying or selling a home. Itâ€™s good to be able to lean on the experience of someone with expertise in the specific parts of town youâ€™re interested in. But thatâ€™s not to say you canâ€™t have a general sense of where the market is headed and what to expect when you hit the streets in search of a house. Take the most recent forecast from Freddie Mac, for example. The outlook says, though the market will slow down this fall and winter, high demand for homes will mean more sales and competition next year. It also says home price growth will begin to slow next year, though you should expect mortgage rates to continue to edge higher through 2020. Overall, according to Freddie Macâ€™s outlook, home buyers and sellers should expect next yearâ€™s market to look relatively similar to this yearâ€™s. More here.

Young Adults Saving Early For Homeownership

First-time home buyers are important to the health of the housing market, since they typically account for around 40 percent of the homes sold. And though that number has fallen in recent years, a stronger economy and job market has led to increasing demand among younger buyers. In fact, according to one recent survey, an overwhelming majority of Americans between the ages of 18 and 34 say they want to own a home, if they donâ€™t already. And while thatâ€™s not that surprising, the fact that the youngest respondents were among the most enthusiastic is. Generation Z â€“ which includes Americans between the ages of 18 and 24 â€“ were more than twice as likely to have started, or plan to start, saving for a home before the age of 25 than previous generations. Two in five Gen-Z participants said they hope to become homeowners by that age. But while they want to become homeowners, they may not have the same motivations as previous generations. Fewer of them said they wanted to become homeowners to live the American Dream or because they think real estate is a good investment. Instead, 61 percent said they want to own a home because they want to customize their own space. More here.

Mortgage Rates Mostly Steady Last Week

According to the Mortgage Bankers Associationâ€™s Weekly Applications Survey, average mortgage rates were mostly flat last week from one week earlier. There was little change across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. However, though rates were virtually unchanged, demand for mortgage applications moved lower, with both purchase and refinance activity posting declines. Joel Kan, AVP of economic and industry forecasts for the MBA, said there are a few factors that may have led to the decreases. â€œThe 30-year fixed-rate mortgage held steady over the week, but total applications decreased overall,â€ Kan said. â€œPurchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks.â€ Still, despite the dip, demand for loans to buy homes was just 0.4 percent lower than during the same week last year when rates were lower. The MBAâ€™s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

The Winter Market May Be Good For Buyers

Typically, spring and summer are thought of as the prime times to buy or sell a home. There are a number of reasons for this, including weather and the end of the school year. But whatever the reason, there are usually more homes for sale and more active buyers during what is typically the busiest sales season. Fall and winter, on the other hand, are the time of the year when the housing market slows down. The approaching holidays and colder temperatures across much of the country mean fewer Americans are in the mood for a move. But that can mean opportunities for buyers who are. A recent analysis looked at the countryâ€™s largest metro areas and compared typical affordability levels, projected rent increases, and the share of listings with a price cut to determine where buyers might have the best chances in the coming months. The results showed conditions in hot markets like Orlando, Boston, Seattle, and Las Vegas are becoming more favorable as the end of the year approaches. That means, interested buyers may be in a better position this fall and winter than they will be next spring when things begin to heat back up. More here.

How Affordable Is The Typical New Home?

Generally speaking, there are two types of homes available to buyers. There are previously owned homes and there are new homes. Which one you choose comes down to a couple of factors. The first is personal preference. Some people prefer the quirks and character of an older home, while others like the comfort of knowing everything in their house is brand new. But though itâ€™d be nice if it was, preference isnâ€™t usually the deciding factor. Ultimately, your decision will come down to budget and affordability. New homes tend to be more expensive than existing homes. Which means, whether or not you consider buying new might be determined by your price range. So how affordable is the typical new home? Well, according to the most recent numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, theyâ€™re becoming more affordable. In September, for example, the median sales price of new homes sold was $320,000, which is down from $331,500 last year at the same time. More here.

Pending Home Sales Increase In September

When an offer on a home has been accepted, that homeâ€™s sale is considered pending. It isnâ€™t final until closing, which typically takes place a few weeks later. But, because most accepted offers result in completed sales, the National Association of Realtors tracks contract signings as an indicator of what sales should look like in the near future. In September, the NARâ€™s Pending Home Sales Index showed a slight increase from the month before, though itâ€™s still below where it was at the same time last year. Lawrence Yun, NARâ€™s chief economist, says the month-over-month increase is a good sign. â€œThis shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right,â€ Yun said. In other words, though tight inventory and the end of the summer season may lead to slowing sales in the near term, home buyer demand remains elevated. Additionally, Yun points out that compared to data going back to the year 2000, affordability levels are favorable and should help keep housing demand steady in the coming months.

Mortgage Demand Bounces Back After Holiday

According to the Mortgage Bankers Associationâ€™s Weekly Application Survey, demand for mortgage loans rose 4.9 percent last week from one week earlier. Refinance activity led the way, increasing 10 percent from the previous week. Demand for loans to buy homes was also higher, however, posting a 2 percent increase. But though demand was up, the rebound follows a holiday week that saw sharp declines. â€œMortgage application activity rebounded the week following the Columbus Day holiday, but both purchase and refinance levels remained lower than where they were two weeks ago,â€ Joel Kan, MBAâ€™s AVP of economic and industry forecasting, said. In other words, despite last weekâ€™s gains, activity overall has slowed. It may have something to do with climbing interest rates. Last week, average rates rose again. Rates were up across most loan types, including 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. Average rates for 15-year fixed-rate loans were unchanged from one week earlier. The MBAâ€™s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

How Long Will It Take To Save A Down Payment?

When asked, most Americans who donâ€™t own a home say theyâ€™d like to become homeowners someday. Regardless of current market conditions or the state of the economy, the desire to own a home endures. Part of this is because it helps to build wealth. The other part is homeownershipâ€™s long-cemented status as a key element of the American dream. So whatâ€™s keeping aspiring homeowners from pursuing their dream? Well, one main factor is coming up with a down payment. The down payment is among the biggest obstacles that keep people from buying. Mostly, this is because the traditional 20 percent down payment can be difficult to save. In fact, according to one recent analysis, someone making the median income and saving 10 percent of their earnings each month would take more than seven years to save a down payment on the typical American home. And, because home prices have grown faster than incomes over the past few decades, the amount of time it takes has been increasing. Fortunately, though, a 20 percent down payment isnâ€™t required, depending on the type of loan you choose. Also, where youâ€™re looking to buy will affect the amount of time itâ€™ll take. For example, a down payment in Pittsburgh will take just 4.8 years to save, while in cities like Boston or Miami it can take twice that long. More here.