Category Archives: homebuying

More millennials having children and moving to the suburbs

Posted on by

As the millennial generation ages, their preferences are evolving.

According to the National Association of Realtors® 2017 Homebuyer and Seller Generational Trends study, 49 percent of millennial homebuyers have at least one child, up 4 percent from last year and 6 percent from 2015. Approximately two-thirds are married, comparable to previous years.

With a growing family, less millennials are choosing city life when buying. Only 15 percent choose to buy in the city, down 2 percent from 2016 and 6 percent from two years ago.  Two-thirds of millennials who purchased in the past year are first-time homebuyers.

Eighty-five percent said homes are a good investment.

“Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” said NAR Chief Economist Lawrence Yun. “These strong feelings bode well for even greater demand in the future as more millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.”

However, the survey also found that younger baby boomers are more apt to consider their millennial children when they are purchasing a home, with 20 percent purchasing a multi-generational home, and 30 percent reporting it was because their adult children had never left or were moving back home.

Millennials have made up the largest generation of homebuyers since the report’s inception in 2013. More than 90 percent of millennials searched for a home online, and 90 percent reported they purchased a home using an agent.

“Online and mobile technology is increasingly giving consumers a glut of real estate data at their disposal,” said NAR President William E. Brown. “However, at the end of the day, buyers and sellers of all ages — but especially younger and often DIY-minded consumers — seek and value a Realtors®’ ability to dissect this information and use their expertise and market insights to coach buyers and sellers through the complexities of a real estate transaction.”

Survey: 25 percent of Americans interested in buying this year

Posted on by

Twenty-five percent of adults reported that they are very likely or somewhat likely to purchase a home this year, according to a recent survey by Bankrate.

Of all non-homeowners surveyed, 15 percent reported they are somewhat or very likely to purchase a home in 2017.

Specially, older millennials (aged 27-36) and Generation Xers (aged 37-52) are more likely to buy within the year. Nearly 40 percent of minorities, more than double the percentage of white adults, reported they are likely to buy a home this year.

“Among millennials, there’s a lot of pent-up demand for home buying,” said Holden Lewis, Bankrate.com’s senior mortgage analyst. “They have been stymied by stagnant wages, student loans and a lack of available starter homes. If enough affordable homes are put on the market, we might see a surge of first-time homebuyers in their early to mid-30s.”

Mortgages do cause hesitation in some would-be homebuyers. Thirty-seven percent of possible homebuyers reported that the size of the mortgage has a major impact on their savings for the future, while 46 percent reported it has a minor impact on their savings.

Parents also struggle more to save, according to the report. Two-thirds of non-homeowners with young children said they are unable to purchase a home due to lack of good credit or the inability to save for a down payment. Eighteen percent reported they don’t want to own a home.

“Having kids and raising a family is a primary reason why Americans take the leap into homeownership—many consider it a key component of the American dream,” added Lewis. “They’re caught between the costs of raising children and paying those mortgages and saving money.”

Realtor.com® Chief Economist Jonathan Smoke said that while most people believe they need 20 percent for a down payment, “in reality, it averaged 11 percent last year.”

 

Existing-home sales kick off 2017 hitting decade high

Posted on by

Existing-home sales increased 3.3 percent, and reached a 10-year high in January, according to the National Association of Realtors® recent release.

Sales hit 5.69 million, the strongest sales pace since February 2007. The sales pace is 3.8 percent higher than January 2016, but the median home price rose 7.1 percent year-to-year to $228,900. This is the 59th consecutive month representing year-to-year price increases.

Nearly every region, excluding the Midwest, saw increases. In the Northeast, sales rose 5.3 percent, increasing to an annual rate of 800,000, 6.7 percent higher than January 2016. The median home price was $253,800, up 2.5 percent from this time last year.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability condition,” said Dr. Lawrence Yun, chief economist at NAR.

First-time homebuyers represented a third (33 percent) of purchasers, an increase of 1 percent from December and last January.

Housing inventory saw an increase of 2.4 percent, rising to 1.69 million existing homes for sale. However, it is still 7.1 percent below January 2016’s housing inventory, which was 1.82 million. Time on the market has also dropped from 52 days in December to 50 days in January.

All-cash sales represented 23 percent of purchases, a 2 percent increase from December, but a 3 percent decrease from January 2016.

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” said Yun. “The combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”