Homeowners are winning when it comes to housing. The CoreLogic Equity Report revealed record levels of home equity growth: equity per owner is up an average $16.3K for the year ending March 2018. CoreLogic also released their Loan Performance Insights report for March 2018, which showcased loans 30 days or more past due decreased from 4.8 percent to 4.3 percent, and seriously delinquent loans also decreased from 2.1 percent to 1.9 percent. It definitely helps that unemployment is at the lowest level in 18 years.
Millennials want in on the action and the investment of owning a home. First-time homebuyers made up 46 percent of the mortgages backed by Freddie Mac, not including refinances, issued in the first quarter of 2018. Ellie Mae showed 89 percent of loans made to millennial borrowers in April were for the purchase of new homes, the highest level since May 2017. The average age of the millennial homebuyer in April was 29.9 years with an average FICO score of 721. The easing of credit, rising rent, and the “threat” of being priced out of homeownership due to increasing home prices and mortgage costs are all quoted for motivating millennial buyers to move now. However, we should note homeownership is still relatively affordable thanks to rising wages but it’s all about location.
Detroit is hot for those in the market for an investment home. The comeback city is still on an upswing but that’s not why investors are loving the housing market—Detroit ranks at No. 2 for having the most under-$100K listings in the nation, with nearly 2,500 homes for sale. More importantly, most are fixer-uppers and many investors are seeing a two to three times return on investment.
The average American dream home costs $1.3 million. Unless you’re a millennial, in which case the cost is $1.5 million. Sixty percent of millennials said they plan to buy a home in the next 5 years, though it may not be that $1.5 million dream home just yet. According to the survey, 60 percent of Americans believe they will be able to purchase their dream home in their lifetime.