Seniors’ Growing Debt Casts Retirement Doubts

The percentage of families in which the head of household is 75 or older and carrying debt grew by 60 percent between 2007 and 2016, according to the Employee Benefit Research Institute. In 2016, nearly 50 percent of such families had debt; the average debt was $36,757. Meanwhile, the average monthly Social Security check is $1,404, and more than 40 percent of single adults receive more than 90 percent of their income from Social Security alone, according to government data. Many may find Social Security payouts aren’t sufficient to maintain their lifestyle and pay off debt.

“To pay off the debt, you’re going to have to give up some living standards,” says Craig Copeland, a senior associate with the Employee Benefit Research Institute. For some homeowners, that may mean having to relocate to a place where the cost of living is less expensive. “They may be able to move into a retirement community, where there may be a better social aspect than living in a house in the suburbs with a bunch of young people,” Copeland says. “Or they may have to move in with a relative or friend to share living expenses.”

Source: “Growing Debt Among Older Americans Threatens Their Retirement,” CNBC (April 4, 2018)

Household Net Worth Reaches Record High

Americans are feeling richer. Household net worth neared $100 trillion in the final quarter of last year, falling into record territory, according to new data released by the Federal Reserve on Thursday. Rising stock markets and property prices were attributed to the jolt in the fourth quarter. (Household net worth is the value of all of a consumer’s assets, like stocks and real estate, minus any liabilities like mortgage and credit card debt.)

Household net worth increased more than $2 trillion last quarter to a record $98.7 trillion in the final three months of last year, according to the report. Households in the U.S. saw their net worth increase to nearly seven times their disposable personal income in 2017.

More at source: “U.S. Household Net Worth Pushes Further Into Record Territory,” The Wall Street Journal (March 8, 2018) [Log-in required.] and “Stock Market Lifts U.S. Household Wealth to $98.7 Trillion,” The Associated Press/USA Today (March 8, 2018)

Survey: Home Owners Worried, Buyers Excited

Consumer sentiment is following an unusual trend for a seller’s market: Home buyers are upbeat, but homeowners are less so, according to ValueInsured’s latest quarterly survey of about 1,600 consumers. Why the divergence between buyers and owners? Some homeowners may feel stuck, while buyers are anxious to jump into real estate before home prices and mortgage rates rise further.

Fifty-eight percent of homeowners surveyed say they want to sell but are holding off because they don’t want to purchase again at today’s higher prices. Fifty-nine percent of owners say they believe buyers in their area are overpaying for a home, according to the survey.

Buyers still have plenty of concerns, such as saving for a down payment and eroding housing affordability, particularly in the nation’s hottest housing markets. Some say they are ready to make some sacrifices to afford their first home.

We suggest you view charts and data at: ValueInsured Modern Homebuyer Survey

Homes are a Better Investment than Retirement Savings

Americans want to buy homes and they want to buy them as an investment option. According to a study on homebuyers by NerdWallet, a personal finance website, 75 percent Americans say that buying a home was a priority for them. NerdWallet analyzed data of more than 2,000 adults surveyed, the company’s mortgage calculator, data from the Consumer Financial Protection Bureau (CFPB), and other sources to develop the study on current home buying sentiments, concerns, and outlook.

The study found that most Americans considered buying a home as a good investment with 64 percent of the people surveyed citing this as a reason to buy a home. And it’s not only the older generation that feels this way. Around 56 percent millennials felt that they would rather own a home that appreciated in value than have more money in retirement savings, reflecting the sentiment of 52 percent of the overall people surveyed.

In fact, according to the survey, 82 percent millennials said that buying a home was a priority compared with 75 percent of generation X and 69 percent of baby boomers. Millennials also aspired to buy more homes, on average throughout their lifetime and were most likely to say that they would like to buy a home to rent out for extra income.

Source: dsnews.com/daily-dose/02-01-2018

Builders Reveal Top 10 Biggest Concerns

Homebuilding is still falling short in many markets in alleviating the shrinking inventories of homes for sale. But builders are blaming the construction shortfall on several factors.

Builders revealed the following top 10 “significant” increases in cost problems they expect to face in 2018, according to the National Association of Home Builders and Wells Fargo Housing Market Index:

  1. Cost/availability of labor: 84%
  2. Building material prices: 84%
  3. Cost/availability of developed lots: 62%
  4. Impact/hook up/inspection or other fees: 60%
  5. Local/state environment regulations and policies: 45%
  6. Inaccurate appraisals: 42%
  7. Federal environment regulations and policies: 42%
  8. Difficulty obtaining zoning/permit approval: 42%
  9. Gridlock/uncertainty in Washington making buyers cautious: 42%
  10. Development standards (parling, setbacks, etc.): 38%

Source: “Building Materials Prices and Labor Access Top Challenges for 2018,” National Association of Home Builders’ Eye on Housing blog (Jan. 16, 2018)

‘Aging in Place’ Begins Early: Report

Homeowners are getting older, and to continue on in their current house, improvements are necessary.

Homeowners at an earlier stage, aged 55-75, are also making modifications, but not necessarily due to aging concerns (though they are, fortuitously, ideal for just that). These include adding automated features like a programmable thermostat or voice activation, and, in bathrooms, grab bars and higher toilets. According to a HomeAdvisor report. The most common remodels, the report shows:

 

  • Add Lever-Style Doorknobs
  • Add Pull-Out Shelves
  • Add a Smart Fire Detection System
  • Add a Smart Security System
  • Replace Stone/Tile With Carpet/Wood

Other key improvements to consider, the report shows:

  • Lighting
  • Modifications in Shower (Bench, threshold)
  • Moving Master Bedroom to First Floor
  • Ramps
  • Wider Doorways

Source: HomeAdvisor

 

 

Rates Hit Pause, Consumers Rush to Lock In?

A slight dip in interest rates last week brought more homeowners and home buyers to the mortgage market. More homeowners were quick to refinance before interest rates rise again, and home buyers were able to lock in lower rates during the week.

The Mortgage Bankers Association reported that total mortgage application volume—which includes for refinancings and home purchases—rose 3.1 percent last week on a seasonally adjusted basis. Mortgage applications, however, still remain 8.5 percent below a year ago.

Additional data at: “Weekly Mortgage Applications Rise as Rates Briefly Fall Back,” CNBC (Nov. 15, 2017)

Newbie Buyers Make Smaller Down Payments

About 60 percent of first-time home buyers put down 6 percent or less on a home purchase in September. The median down payment has dropped from 6 percent to 5 percent for first-time buyers, according to the National Association of REALTORS®’ 2017 Profile of Home Buyers and Sellers.

NAR conducted a survey of non-homeowners earlier this year and found that most consumers believe you need a down payment of 10 percent or 20 percent to buy a home.

“They may not be aware that these programs are available, and they may not be taking advantage of them,” Jessica Lautz, NAR’s managing director of survey research and communications, said in the latest Down Payment Report, published by the Down Payment Resource.

Thirty-two percent of first-time buyers said they saved for more than two years to have enough to buy a home. Student loan debt was the most often cited obstacle to saving. The second most cited barrier for saving was credit card debt.

Source: “The Down Payment Report,” Down Payment Resource (November 2017)

When to Drop Your Listing Price

Though low inventory is prompting buyers to raise their offers in order to beat out competitors, you still want your sellers to know: an overpriced listing will linger on the market. Buyers pay attention to time on market and may erroneously assume something is wrong with a property that has gone “stale.” Real estate pros say it’s critical to determine what time frame is considered stale in your market and drop the price of your listing before getting to that pivotal moment.

Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days in September, down from 39 days a year prior, according to the National Association of REALTORS®. Some sellers may be adamant about “testing the market” with a high asking price, so you should have a game plan for what to do if it backfires.

Source: “How to Know When to Drop the Asking Price on Your Home,” CNBC (Oct. 27, 2017)

Hispanic Homeownership Surges

Hispanics are increasingly making up what’s considered the typical American home buyer, Curbed.com reports. Latinos are expected to make up 52 percent of new home buyers between 2010 and 2030, largely driven by the country’s 14.6 million Latino millennials.

“The fact is the majority of Latinos want to be home owners and will make up half of all new home buyers in the next 20 years,” Scott Astrada, director of federal advocacy at the Center for Responsible Lending, told NBC. “They have a central place in the housing market and finance system.”

Harvard University Joint Center for Housing Studies’ “State of the Nation’s Housing” study predicts minorities overall will drive three-quarters of the gains in U.S. households. Latinos will likely account for one-third of those increases alone.

Source: “Booming Hispanic Homeownership Helping Fuel U.S. Housing Market,” Curbed.com (Sept. 5, 2017)