ZIP codes with the most equity; Down Payments; Americans favor owning over renting; Historically low unemployment and more…
14.4 million U.S. properties are equity-rich, meaning the mortgage liens against them have a loan-to-value ratio of 50% or less. This is up from five years ago, when just under 10 million properties were considered equity-rich.
Where are homeowners amassing the greatest amounts of equity? The top five ZIP codes with the greatest number of equity-rich properties were all located in the San Jose and San Francisco markets. Here are the top five states with the highest share of equity-rich properties:
Seattle-area homebuyers have a bit of good news as the middle of the housing market continues to come down from what one local housing economist calls last summer’s “sugar high.”
April’s median price of a single-family home in King County dipped to $690,000, down a substantial 4.8% or $35,000 from the April figure last year, according to the latest data from the Northwest Multiple Listing Service. King County also saw increases in housing inventory and pending sales over the same period.
Buyers looking for higher-end homes in pricier cities like Seattle and Bellevue aren’t paying any more than they did a year ago. Meanwhile, those shopping around for something resembling a deal, perhaps in Tacoma or Everett, are still confronted with the same old hot market from years past.
Company says traditional measures of affordability are skewed toward current homeowners
A recent survey of individuals planning a purchase within the next three years found that nearly a third thought a 20 percent down payment was required. Over 30 percent of renters and 25 percent of existing homeowners didn’t know how much was required but 70 percent said if it were 20 percent it would delay their purchase and nearly 30 percent indicated that amount would prevent them from ever buying. Many also assumed that the down money needed to come from personal savings.
Given these mindsets, Freddie Mac economists Sam Khater, Len Kiefer, and Ajita Atreya looked at where buyers have gotten their down payment funds in recent years using a component of the Federal Housing Finance Agency/Consumer Finance Protection Bureau National Mortgage Database called the NSMO. Some in the 6,000-household sample reported multiple sources for their down payment, but 70 percent of those buying in 2016 used savings including retirement funds or inheritance money, a decrease from 79 percent in 2013. Ten percent had assistance – a grant or loan – from a nonprofit or government agency, twice the share in 2013. The share of homebuyers who used money supplied by family or friends has remained constant at 25 percent since 2013 and support from sellers has been in the 16 to 17 percent range during that time.
67% of American homeowners believe owning is easier than renting
With a homeownership rate of 64.2%, it’s safe to say the American dream of homeownership is alive and well. However, lackluster growth in the sector suggests the market might be turning, especially as affordability remains a top concern.
Builder confidence in this sector reaches record high
The 55+ housing market is thriving right now as more Baby Boomers look to invest in a new nest to live out their retirement dreams.
With scores of older adults looking at new single- and multifamily builds, homebuilder confidence in this market has soared to a record high.
3.11 million first-time buyers are projected to enter the market by 2028
“From 2019 through 2028, 44.9 million people will turn 34, the median age of current first-time home buyers,” Zillow writes. “That’s an increase of 7.4% from the past 10 years, when 41.8 million people passed that threshold.”
While it’s not certain if each of these people will purchase a home, Zillow claims the sheer heft of their numbers will impact the market.
The nation’s unemployment rate retreats to 3.6% in April
Hiring remains strong as the US economy added more jobs than expected in April, marking a record 103 straight months of job gains. The unemployment rate fell to 3.6 percent.
Homes priced at or above $2 million drop to a 9-year low
In the first quarter of 2019, luxury home prices decreased 1.6% year over year, marking the first annual decline for the market in nearly three years, according to the latest data from Redfin. Redfin Chief Economist Daryl Fairweather said since homeowners can’t deduct as much mortgage interest as they used to be able to, the calculus has changed when it comes to buying a home, especially an expensive one.
…Instant buying is a small part of the market, but it is growing at breakneck speed. Zillow bought fewer than 700 homes in 2018. It expects to be buying 5,000 homes per month in three to five years. Opendoor, the first big iBuyer, bought more than 11,000 homes last year and in the past year has raised more than $1 billion to step up its pace.
The companies typically aim to hold homes for 90 days or less before selling them, typically to an individual buyer. For the eventual owner, little changes about the process…
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