‘Tiny Homes’ May Have a Wider Buyer Pool

A new survey confirms that consumers are definitely intrigued by smaller homes, often described as less than 600 square feet. More than half of adults recently surveyed–or 53 percent—said “yes” or “maybe” when asked if they would ever consider the possibility of buying such a small home, according to a recent study by the National Association of Home Builders. That means a majority of adults would consider moving into a tiny home at some point in the future, the NAHB notes.

Younger generations tend to find tiny homes more appealing than older age groups. More than half of millennials and Generation X members said they were open to the idea of a tiny home. However, only 45 percent of baby boomers and 29 percent of seniors said they’d be willing to entertain the idea.

But local zoning laws may curtail the prevalence of just how big the tiny-home movement gets. However, there has been a recent momentum among some local jurisdictions to relax some of those restrictions.

Source: “Tiny Homes Have Potential Buyers,” National Association of Home Builders’ Eye on Housing blog (Feb. 7, 2018)

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

Walkable Areas Are Getting More Competition

Older Americans are placing a higher value on living in walkable urban centers, according to a new survey of 1,000 respondents nationwide about their living preferences

A majority of respondents surveyed by A Place for Mom, a national referral service, said it was “very important” or “somewhat important” to live in a walkable neighborhood. They also sought neighborhoods with low crime and those that are close to family.

“It’s time to abandon the idea that only millennials and Generation X care about walkability and the services available in dense urban neighborhoods,” says Charlie Severn, head of marketing at A Place for Mom. “These results show a growing set of senior housing consumers also find these neighborhoods desirable.

The survey authors say it’s important for developers to consider creating multigenerational communities in suburban centers that place an emphasis on walkability. Walkability ranked high regardless of income level in the survey. Walkability ranked highest for those under 70 years old who were seeking senior apartments.

Source: “Seniors Want Walkability Too, Survey Says,” Curbed.com (July 25, 2017)

First Half Review: Housing Is Doing Well!

The first half of 2016 has proven to be a boom to real estate, writes Jonathan Smoke, realtor.com®’s chief economist in his monthly column. Total home sales are up 5 percent compared to the first half of 2015 and median existing home prices are up 5 percent as of June, setting a new record. Also, a rise in equity for home owners may encourage them to consider selling.

Yet, Smoke doesn’t expect the strong market to stay this strong in the second half of the year.

“All ages have been tempted by near-record lows in mortgage rates prompted by global economic weakness and instability driving investors toward U.S. bonds,” Smoke writes in his latest column. “But even with all that demand, the market can grow only so much, because of the limited inventory of homes for sale.

“As long as [mortgage] rates do not increase substantially in a short period of time, the real estate market should remain strong,” Smoke says. “The underlying reason for higher rates is a stronger economy; so the benefits of that will offset the impact of marginally higher rates. A stronger economy, more jobs, lower unemployment, and higher wages will power demand. Higher rates will also likely help loosen credit. Those positive conditions coupled with demographic tailwinds from millennials and boomers will keep the U.S. housing market healthy and strong for at least two more years.”

Source: “Housing Had a Great First Half of 2016, But Will It Last?” realtor.com® (July 28, 2016)

How Much Space Home Buyers Really Crave

The amount of desired square footage can vary quite a bit among the different age groups, according to findings from the National Association of Home Builders’ “Housing Preferences of the Boomer Generation: How They Compare to Other Home Buyers.” For example, millennial and Gen X buyers desire the most space, at more than 2,300 square feet. Baby boomers and seniors, on the other hand, mostly would be happy with homes that are under 1,900 square feet.

NAHB’s study also found that more than half of all home buyers across all age groups would like to have a home with three bedrooms. Thirty percent of respondents say they’d prefer four bedrooms or more. Millennials and Gen X’ers are most likely to want a home with at least four bedrooms.

Take a look at the NAHB chart that shows the gap between current and desired home sizes among the various ages at:
“Housing Preferences Across Generations (Part II),” National Association of Home Builders’ Eye on Housing (March 17, 2016)

First-Time Buyers May Face a Difficult Spring

This spring, first-time buyers may struggle to find a house. The number of homes in the lower-price market is severely limited. Inventory fell 8.2 percent in January from a year earlier for properties priced below $250,000, according to data from the National Association of REALTORS®.

“Affordability is a challenge this spring,” says Doug Duncan, Fannie Mae’s chief economist. Potential home buyers “would have gotten their credit in shape and they’ll have a job. But they will be frustrated because, in their market, there simply won’t be affordable homes.”

“Already facing affordability issues, this competition at the entry-level market only adds to the roadblocks slowing first-time buyers,” says Lawrence Yun, NAR’s chief economist.

Source: “First-Time House Hunters Lose in Busy U.S. Homebuying Season,” Bloomberg News (March 16, 2016)

Millennials Are Heading to Outside of Urban Areas

Millennials are leaving the city. While many millennials choose to live in urban areas as renters, when they’re ready to buy, they’re increasingly seeking single-family homes outside of urban areas, according to the 2016 National Association of REALTORS® Home Buyer and Seller study.

“The median age of a millennial home buyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” says Lawrence Yun, NAR’s chief economist. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction, and affordability pressures make buying in the city extremely difficult for most young households.”

The percentage of millennials purchasing a home in an urban or central city area fell to 17 percent in this year’s survey – down from 21 percent the year prior. 10 percent purchased a multifamily home, down from 15 percent a year ago.

Source: “Millennials More Likely to Buy in Suburban Areas,” RISMedia (March 9, 2016)

Home Features ‘Most Desired by Age’

Home buyers are demanding more home features that help them save energy and keep the home organized, a new study released by the National Association of Home Builders, “Housing Preferences of the Boomer Generation: How They Compare to Other Home Buyers” reveals.

However, the generations – millennials (born 1980 or later); Gen X’ers (born 1965-1979); baby boomers (born 1946-1964); and seniors (born 1945 or earlier) – do show some differences in what home features they value the most. In a nationwide survey of more than 4,300 home buyers, NAHB pinpointed those differences and which features each generation most desires.

Home features most wanted by each generation detailed at: “Housing Preferences Across Generations (Part I),” National Association of Home Builders’ Eye on Housing Blog (March 7, 2016), study source.

What Generation Faces the Most Financial Hurdles?

A recent Experian study finds that, among millennials (ages 19-34), generation Xers (35-49), and baby boomers, and the greatest generation (ages 50-87), generation Y has the biggest job ahead of them in terms of repairing their credit. They also have the worst credit scores of all groups combined.

“Given the significance millennials play in financial services and the credit marketplace, it is crucial to understand this influential consumer segment and how they use credit as a tool,” says Michele Raneri, vice president of analytics and business development at Experian. “While this generation may not look like they are on the right track financially, it’s important to keep in mind that credit scores are built on credit experiences, and while this generation has been slower to use credit, they have plenty of opportunities to build a positive credit history.”

Source: Experian

 

Millennials Striking Out on Their Own

In 2013, 31 percent of 18- to 34-year-olds still lived with their parents. Prior to the housing crisis, however, that percentage stood at 27 percent. If the number of 18- to 34-year-olds who live with their parents returns to pre-recession levels over the next five years that could mean an extra 400,000 young adults leaving home each year.

“[A] normalization in the share of young adults living with their parents looks set to provide a boost to household formation, underpinning the recovery in housing starts,” says Ed Stansfield, chief property economist for Capital Economics. “But unless it is also accompanied by a marked loosening in lending criteria it is unlikely to trigger a new house price boom, as house price growth will be constrained by income growth.”

“The U.S. economy is now growing strongly, with real incomes rising rapidly and mortgage credit conditions loosening,” says Stansfield. “That means more young adults will have the means to strike out on their own.”

Source: “Is Household Formation Set for a Rebound?” HousingWire (March 12, 2015)