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)

Spike in ‘Hispanic Home Ownership’ Rate

Home ownership rates in the U.S. may be on the decline, but not among Hispanic households, according to the State of Hispanic Home Ownership Report published by the Hispanic Wealth Project and the National Association of Hispanic Real Estate Professionals. Last year was the first time since 2009 that the Hispanic home ownership rate increased.

The Hispanic home ownership rate in just the 12 months ending December 2015, soared from 44.5 percent to 46.7 percent — the largest one-year increase in more than a decade.

Hispanics also led in workforce participation and household formation growth nationwide, according to the report, noting we should expect Hispanics to be the primary driver of the overall home ownership rate for the next decade.

This report “should be required reading by everyone in housing, especially lenders and REALTORS®,” says David Stevens, president and CEO of the Mortgage Bankers Association. “The Latino community is massive, it’s ready to own, and it’s now. The significance of Hispanics to housing and the economy will only grow, creating opportunity for all who focus on this vibrant, dynamic, and impactful part of the U.S. economy.”

Source: National Association of Hispanic Real Estate Professionals

Home Remodeling Activity Looking to Gain Steam

Expenditures for home improvements should see healthy gains in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006.

2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.

For more information about the LIRA, including how it is calculated, please visit the Joint Center for Housing Studies website.

For Home Owners: Best Time to Remodel Is Now!

As home values continue to rise, more home owners may find now is the best time to add to that value even more. Spending on home remodeling is expected to climb from 2.4 percent in the second quarter to 6.8 percent by the second quarter of 2016, according to Harvard University’s Joint Center for Housing Studies.

“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains and sales,” says Chris Herbert, managing director of the Joint Center. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components such as roofing and siding.”

Sellers are already diving into more remodeling projects and using some of the equity in their homes to fund the projects. Black Knight Financial Services reported an increase in cash-out refinancing this summer – a 68 percent jump in the second quarter year-over-year, and it’s now at the highest level in five years.

Source: “New Kitchen? New Bathroom? Why the Time Is Now,” CNBC (Oct. 16, 2015)

Home Remodeling Surge Coming: Here’s Why

As the baby boomer generation ages, many home owners likely will choose to “age in place” and will require remodeling to better suit their changing needs.

“Since much of the housing stock is currently ill-equipped with even basic accessibility features, older home owners aging in place will need to invest in retrofitting their homes in order to age comfortably and safely,” writes Abbe Will, researcher analyst for JCHS.

“Yet the current housing stock is not especially equipped to meet the accessibility needs of an aging nation, as not even a third of homes have what could be considered basic accessibility features, such as a no-step entry and bedroom and full bathroom on the entry level,” JCHS’s analysis notes.

This suggests “the need for significant retrofit spending on existing homes to narrow this supply-demand gap,” the JCHS analysis notes. Meanwhile, “older households in the South and West regions of the country are already better accommodated for aging in place, with relatively more homes in these regions having basic accessibility features, and this trend is not expected to change over the coming decade.”

Source: “Aging Society and Inaccessible Housing Stock Suggest Growing Need for Remodeling,” Harvard University’s Joint Center for Housing Studies’ Housing Perspectives Blog (July 8, 2015)

The Return of the First-Time Home Buyer?

Young people are starting to leave their parent’s home and move out on their own. The Current Population Survey for 2013 showed a drop in the percentage of 20-somethings living with parents, marking the first decline since 2005.

As of now, the percentage drop appears minimal: Those aged 18 to 24 living with parents or a related subgroup dropped from 56 percent to 55 percent in one year. However, Brad Hunter, chief economist at Metrostudy, notes in a Builder online article that the one-percentage-point decline represents 300,000 people who are now looking for a household of their own that who were previously living with their parents.

A recent report by Harvard University’s Joint Center for Housing Studies predicts that 2.7 million more households will form among people in their 30s over the next decade.

First-time buyers usually make up about 40 percent of home buyers. However, lately, the share has been in the 35 percent to 38 percent range, Hunter says. For existing-home sales, first-time buyers’ share is less than one-third of all buyers, at 27 percent in May, according to the National Association of REALTORS®.

The delay in millennials branching out on their own has greatly reduced household formation in recent years. Household formation rates usually average 1.4 million per year. Lately, the rate has been a fraction of that, about 500,000 to 700,000 a year.

“We are seeing some evidence that young people who had moved in with their parents or relatives are now finding the means and the motivation to move out and get their own place,” Hunter notes. “While most of these newly-emerging twenty-somethings will be going into rentals, the movement out of the parental home is nonetheless expected to support a series of positive steps from rentals to entry-level re-sales to entry-level new homes, and on up the ladder.”

Source: “First-Time Buyers and New-Home Demand: Reverting to Normal,” Builder (July 10, 2014)

When Will Millennials Break Into Ownership?

The housing market has made some strides since 2013, but household growth has yet to fully recover from the effects of the recession, according to a new housing report released Thursday by Harvard University’s Joint Center for Housing Studies.

“Young Americans, saddled with higher-than-ever student-loan debt and falling incomes, continue to live with their parents,” the report notes.

Still, researchers are hopeful for a turnaround as the Millennial generation breaks out on their own. The number of households in their 30s is expected to increase by 2.7 million over the coming decade, which should boost demand for new housing, the report predicts.

“Ultimately, the large Millennial generation will make their presence felt in the owner-occupied market, just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013,” says Daniel McCue, research manager at the Joint Center.

But Millennials likely will not be able to increase their presence in the housing market until incomes grow. Also, the report notes that another important aspect is how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of home buyers.

Source: Harvard University’s Joint Center for Housing Studies

When Will Millennials Break Into Home Ownership?

The housing market has made some strides since 2013, but household growth has yet to fully recover from the effects of the recession, according to a new housing report released by Harvard University’s Joint Center for Housing Studies.

“Young Americans, saddled with higher-than-ever student-loan debt and falling incomes, continue to live with their parents,” the report notes.

  • Still, researchers are hopeful for a turnaround as the Millennial generation breaks out on their own. The number of households in their 30s is expected to increase by 2.7 million over the coming decade, which should boost demand for new housing, the report predicts.

“Ultimately, the large Millennial generation will make their presence felt in the owner-occupied market, just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013,” says Daniel McCue, research manager at the Joint Center.

But Millennials likely will not be able to increase their presence in the housing market until incomes grow. Also, the report notes that another important aspect is how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of home buyers.

Source: Harvard University’s Joint Center for Housing Studies

Now Renters Getting Priced Out, Too?

One out of three Americans live in a housing market where rent for a three-bedroom home takes more than 30 percent of their monthly median income, according to a new study released by RealtyTrac. In some cities, the percentage is even higher.

Renters in the New York City borough of the Bronx are spending the most in the U.S. The average household there is forking over nearly 66 percent of their monthly income to rent a three-bedroom apartment, which averages $1,800 a month.

Renters in Philadelphia; Brooklyn, N.Y.; Baltimore; and Miami are paying nearly 50 percent of their income toward rent, according to RealtyTrac’s findings.

Since the housing crisis, a large demand for rental housing has pushed rents more than 21 percent higher since the housing market peaked in 2006, according to Harvard’s Joint Center for Housing Studies. However, real income has dropped about 14 percent over the past six years.

Source: “One in Three Americans Are Spending Too Much on Rent,” CNNMoney (May 1, 2014)

More Home Owners Try ‘Reluctant Landlord’ Role

Daily Real Estate News | Tuesday, November 15, 2011

More sellers who are tired of their home lingering on the market or don’t want to have to take a loss on their home are opting to become landlords instead. 

For example, according to an article at NPR, one couple describes owning a two-bedroom bungalow in Oakland, Calif., which they purchased for $500,000, that was appraised recently at $260,000. When a job relocation was sending them across the country, they decided to rent instead of sell. 

But becoming a landlord isn’t an easy role to step into, as some of these “accidental landlords” describe difficult tenants and constant problem or maintenance issues that require fixing. This is not unique to your area or our Placerville, Calif., regions.

The number of unintentional landlords is growing. About 2.3 million single-family homes became rentals during 2005 to 2009, a significant increase compared to about 700,000 single-family homes that became rentals during 2001 to 2005, according to Eric Belsky with Harvard’s Center for Housing Studies. 

“The good news for the owners or the reluctant landlords has been that the rental market has been so good, they’ve been able to cover pretty much all their expenses and just been able to basically go on with their lives,” Ron Abrams with the Chicago Association of REALTORS® told NPR.

Source: “Would-be Sellers Become Reluctant Landlords,” NPR (Nov. 13, 2011)