Guardian Residential Lending Industry News, May 2-9, 2019

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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

ZIP codes with the most equity; Down Payments; Americans favor owning over renting; Historically low unemployment and more… 

 

These are the ZIP codes where homeowners hold the most equity (HW, May 9)

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:

  1. California: 43%
  2. Hawaii: 38.1%
  3. New York: 34.2%
  4. Washington: 33.2%
  5. Vermont: 32.8%

READ MORE…

 

Seattle-area homebuyers get good news as prices cool, choices grow — but competition still hot in some spots (The Seattle Times, May 6)

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.

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Seattle-area housing market split into two different pieces (National Mortgage News, May 2)

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.

READ MORE…

 

Should the housing market change its approach for Millennial housing affordability? (HW, May 8)

Company says traditional measures of affordability are skewed toward current homeowners

READ MORE…

 

How are new borrowers managing to come up with down payments? (Mortgage News Daily, May 8)

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.

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Americans still favor owning over renting, but for how long? (HW, May 7)

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.

READ MORE…

 

The 55+ housing market is booming (HW, May 7)

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.

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Housing slowdown likely to pass as second wave of Millennials enter housing market (HW, May 7)

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.

READ MORE…

 

The U.S. unemployment rate just fell to a 50-year low (HW, May 3)

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.

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Luxury home prices experience the first annual decline in nearly three years (HW, May 2)

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.

READ MORE…

 

Looking for a fast sale? Silicon Valley is buying (Portland Business Journal, May 7)

…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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32 Architects Reveal Budget Breakdowns For Projects Ranging From $1.5K to $910K (Dwell, May 8)

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Just For Fun

7 Past Décor Fads Worth Bringing Back (WSJ, May 3)

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Thanks for reading!