CoreLogic’s Loan Performance Insights report for April 2018 was released today and if we remove last year’s natural disasters in Houston and throughout Florida and in Puerto Rico, the seriously delinquent loans and foreclosure rates are very strong. Thanks to a long period of strict underwriting practices and improved economic conditions, delinquency rates are near historic lows.
Forty-nine percent of Americans feel wealthy when they own a home, and 62 percent defined wealth as spending time with family. Where better to spend time with family than at home, in one of the largest investments one makes in their lifetime. Home sweet wealthy home.
An increase in home inventories could be on the horizon. Construction jobs saw an increase in employment by 13K in June, making the total figure building jobs created since the start of 2018 more than 280K.
The 2026 World Cup is coming to North America, with the U.S. hosting some of the games and providing the country with an opportunity for “tremendous economic boost” if U.S. cities keep their infrastructure costs in check and are smart. Homeowners could personally benefit by using apps like Airbnb and Uber to capitalize on the tourism the event will bring to town.
Traverse City, MI, the Pure Michigan lake town that’s arguably most recognized as one of the top summer destinations in the state scored the No. 4 spot on the Top 10 Lake Towns of 2018. The median home list price is $327K and a two-year home price appreciation of almost 18 percent. Branson, MO stole the top spot thanks to homes in a variety of price ranges available on the market, the beaches, a full marina, scuba diving, some of the best trout fishing in the country, and being recognized as “the live music show capital of the world.” Vacation home anyone?
Photo Source: Instagram via unknown.
When comparing many categories of demographics of homebuyers, single women over the age of 55 have been the fastest growing since 1981. Last year, the percentage of single older women nearly doubled from 20 years ago, making up 8.2 percent of all homebuyers. Also on the rise: Hispanic homeownership, up for the third consecutive year and rising to 46.2 percent in 2017.
Homes with central air conditioning sell for a 2.5 percent greater profit than homes without it. With the heat wave we’re facing in Michigan this week, we can’t say this is a surprise. It’s a common feature many homeowners prefer and was a requirement for 62 percent of homebuyers last year—we’re surprised that percent wasn’t higher.
Two Michigan cities made the top 20 hottest markets list again: Detroit and Grand Rapids. Midland, Texas topped the list, holding onto it’s No. 1 spot for the third month in a row, thanks to homebuyers’ ability to obtain a decent-size home for an attractive price in the area. California only holds five of the top 20 spots, no longer dominating the list, and signaling a shift in interest and money away from the overheated markets and into the less expensive secondary markets.
The Bureau of Labor Statistics reported 213K jobs created in June, beating expectations of 190K but last month’s number was revised lower by 22K and the unemployment rate increased to 4 percent. The Average Hourly Earnings also moved slightly higher. The ADP Employment Report released yesterday showed 177K jobs created in June.
The National Association of Home Builders (NAHB) Housing Market Index for April was reported at 69, a very strong figure, with buyer traffic remaining at 51, still showing a strong demand. What’s constraining availability and building? The lack of buildable lots and increasing construction material costs. Confidence remains strong thanks to rising wages, millennials and first-time homebuyers continuing to enter the market, and low unemployment continuing to fuel demand. Folks are wanting to invest in their own home and we can’t blame them in today’s market and economy.
Sorry parents, you’re not out of the woods yet when it comes to paying for your millennial kid. Almost 17 percent of millennials expect their parents to help them with their first downpayment on a home, according to a recent report. For the renting millennial, 8 percent of those who are not students receive financial help from their parents, with one-in-three of those renters’ rent paid in full by their parents.
There’s always a list, even for the business professional. For many, profession dictates location. So where are the most affordable cities for the nation’s fastest-growing professions? Physical therapist assistants might want to think about Springfield, MO while software developers check out Austin, TX. For women and looking more general, the city that shows the most success is the nation’s capital, where women were the highest paid and comprised almost 40 percent of the area’s business owners.
Could smart wallpaper be the next trend for the home or just a nice thought? Researchers are working to develop a smart fire-resistant and fire alarm wallpaper that is electrically insulated and can be used to close a circuit and activate an alarm if heat rises above a certain temperature and before the fire spreads. Question remains: will homeowners use it? Wallpaper hasn’t been the most popular choice as of late.
Photo Source: Instagram via unknown.
Buyer traffic continues to rise despite low housing inventory and marginally higher mortgage rates. Though, the threat of rising mortgage rates has forced homebuyers off the fence to take a more active role in purchasing a home sooner rather than later.
Rent prices are also on the rise, tipping the scale for some to purchase a home. Millennials are putting 45 percent of their total income toward rent and will pay out close to $100K for rent before they are 30. They might be earning more compared to other generations when it comes to income, but they’re also spending more on rent. The struggle with owning a home: almost half of millennials who have student debt, according to the recent study, are uncomfortable obtaining a mortgage in addition to their student loans. The real obstacle: downpayment perceptions.
The BLS Jobs Report for March was a miss, coming in 72K short of the 175K expected jobs created. It was the worst reported gain in the last six months but came after February’s major gain that was the best in two-and-a-half years. The lag in construction jobs created could likely be due to the fabulously intense winter taking place across much of the country still. Construction job openings still remain at a historic high, it’s just about filling them at this point. That’s comforting.
Speaking of construction, the percentage of builders using drones have doubled in the last two years, especially popular with single-family builders, from 22 percent to 46 percent. Makes sense, they provide a great perspective for preliminary surveying and monitoring a project. That’s one way to add some eyes onto the jobsite; now about adding some hands.
Photo Source: Instagram via @beckiowens
Historically, millennials have tended to look more at FHA programs for home financing but in the last couple months this has changed. More millennials are qualifying for conventional mortgages. In January, conventional loans accounted for 67 percent of overall volume by millennial borrowers. The share of refinances ticked up to 18 percent of all closed loans to millennials.
The February BLS Jobs Report completely blew away expectations of only 210K, coming in strong at 313K jobs created, the largest monthly gain in 19 months. Construction saw the largest gain since 2007. Both, the January and December reports were revised higher. Such strong reports indicate a Fed rate hike later this month to be “a given.”
Fun Facts Friday:
- For 2017, forty-three percent of mortgage customers reported applying digitally.
- Most buyers don’t choose a lender based on rate and price but rather on “a combination of trust in the brand and reasonable price.”
- The magic formula for the mortgage business according to J.D. Power: convenience + recognition + advice + trust + value. We can’t argue with that!
Photo Source: Instagram via @landschute
Nationally speaking, “homes are the most affordable they’ve been in the last 40 years.” How is this recent claim by Trulia possible when multiple reports contradict it? Home prices may have outpaced income growth but as we’ve seen, there’s great wage growth and job stability—economy is good—and buying a home has remained more affordable now compared to history due to the still low mortgage interest rates. In 1980, they were at 16%. CRAZY! Five percent is looking pretty beautiful.
Over 207K homes were flipped in 2017, the highest in eleven years. However, this is no “flipping frenzy” like we saw between 2004 and 2006. Flippers saw an average return of 50 percent over the last few years compared to only 31 percent before. Hottest market: Buffalo, New York.
Now, we’re seeing investors take an interest in student housing after it slowed in 2017 (but was still at a historical high despite its drop from 2016). These properties are typically viewed as a steady investment because they can retain their value in all economic times. Not to mention, there’s quite a demand.
The labor market is strong and yesterday’s ADP Employment report came in much stronger than expectations at 235K and the previous month’s report was revised even higher by 10K to 244K. Employers are holding onto their people as the number of firings remain very low—we like this but it also means job openings are getting tight.
Photo Source: Instagram via @landschute
The 55+ Housing Market Index report jumped to a record high of 71 in the fourth quarter of 2017, showcasing how the 55 and up crowd believe housing to be very good overall.
The BLS Jobs report for January was released Friday morning announcing a 200K job increase, an encouraging figure and solid report. Biggest news: wage growth increased 2.9% from a year ago, the highest annual growth since 2009. This has also fueled support and predictions for the Federal Reserve to hike rates a quarter percent in March. There’s no doubt we’ll see a rate hike this year, the question is how many.
Wayne County—Detroit—in Michigan scored the No. 6 spot for best counties to buy in, not rent, with monthly median homeownership costs coming in at less than 63% of the median monthly rent cost.
Photo Source: Instagram via @landschute
During the fourth quarter of 2017, home sellers saw an average home price gain of $54K, up almost $7K from the same time in 2016. This is the highest recorded home price gain for sellers in over a decade! It also represents almost a 30% average return on investment. Now is the most profitable time to sell a home in more than ten years but homeowners are increasingly staying in their homes longer.
Shared living is increasing. What’s shared living? Think Golden Girls, where adults live with other adults who they are not family and are not romantically involved with. Pretty common phenomenon for older college students and millennials, but even older generations are doing so, as well. Thirty-two percent of the population lived in a shared household last year.
Initial Jobless Claims for last week reported at 230K. The ADP Employment report for last month indicates 234K jobs created. If there’s a slowdown in job growth, it’s likely due to businesses unable to find enough workers to fill positions, not that companies aren’t hiring. That can be a good thing, especially when considering the unemployment rate has remained low. Tomorrow the BLS report is released.
Photo Source: Instagram via @bhg.homeservices
2017 saw the best existing home sales year since 2006. Existing Home Sales for the month of December were down slightly more than expected but November’s figure was the best in 11 years so this pullback—any pullback, really—was expected. Despite the decline and the low inventory, 2017 finished with sales up 1.1% from 2016—the high demand is still there. First-time homebuyers made up 32% of these sales in December.
New Home Sales for December were down 9.3% but this also came off November’s strong month that had the best number in a decade. This slowdown in pace did allow for the inventory of new homes on the market to increase 3.9%.
The Federal Housing Finance Agency (FHFA) Housing Price Index was up 0.4% in November. Shocker, home prices continue to rise.
Are factory-built homes the answer to low inventory? The Smart Home Company LLC has developed a few of these homes and planted them along West Michigan. They’re built to be energy-efficient with smart design features and 2 or 3 bedrooms to target millennials. They’ve become a popular choice for investors and there’s been a demand increase from such developers.
Millennials, the generation of avocado toast and craft beer, are big money savers—much more than in 2015. Sixteen percent of millennials have at least $100K in savings and 47% have a savings of $15K. Student loans aren’t holding them back. Why the focus on savings? In case of an emergency, retirement, and to buy a home are the top three given but many still believe they aren’t saving enough.
Detroit listed among cities with highest percentage of millennial homeowners. Detroit also remained on the list for 20 Hottest Markets in America for January 2018. However, California was the popular choice owning 13 of the 20 spots.
Mortgage Applications for last week were up 4.5% overall, with both purchases and refinances posting increases.
Initial Jobless Claims for last week reported at 233K. January is expected to show a strong Jobs Report.
Photo Source: Instagram via @lifestyle.luxuries
Millennials might love technology but not enough to remove phone calls, emails, and face to face interactions from communication standards. While 88% of millennials use online resources when purchasing a home, 70% are also looking for a lender to educate them on the process. Millennials don’t want to deal with a robot, they only want technology to ease the homebuying process. Only 14% of consumers indicate they’ll respond to an automated message, or what they perceive as such.
Best place to live in America was once again awarded to Ann Arbor for the second year in a row, this time by Livability (Niche named the city such for 2017). Why is the home to the Wolverines favored: its environmental focus, natural beauty, civic engagement, education, and high quality healthcare to name a few.
Amazon announced its list of the 20 cities under consideration for its second headquarters. For the local homeowners of the still TBD winner, there could be quite a jump in home values as Amazon is expected to bring 50,000 high paying jobs to the selected are. For the renters, this could raise concerns. When home prices rise, rent prices rise as well. For homebuyers, it’s a great investment opportunity.