Faith in Real Estate, Not Stocks

Real estate has surpassed stocks as Americans’ favorite long-term investment, according to a nationwide Bankrate survey of about 1,000 respondents. Thirty-one percent of survey respondents named real estate as their favorite investment for building wealth that they don’t need access to for a decade or more. That is the best that real estate has performed on Bankrate’s annual survey in the last seven years. In 2018, stocks were the most popular .

Millennials, at 36%, were the most likely age group to call real estate their top long-term investment choice, according to the survey. Other generations also favored real estate, including generation X (31%), baby boomers (30%), and the silent generation (23%). “Millennials are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than ten years,” says Greg McBride, Bankrate’s chief financial analyst.

Source: “Real Estate Is Back as Americans’ Favorite Long-Term Investment,” Bankrate.com (July 17, 2019)

Planning for Home Ownership?

When is the right time to purchase your first home? The answer differs across age groups, family pressures and life goals.

One in five parents say they expect their child to own a home by age 25, yet this doesn’t match up to reality. Younger adults tend to feel the most pressure to own a home, but they’re still waiting on their own time terms, according to a new survey from Porch.com, a home remodeling website. Porch.com surveyed nearly 1,000 individuals, ages of 18 to 81.

“Purchasing a home is one of the most complex and expensive decisions most of us make, so it’s easy to see how not choosing the right style, location, or size can invoke criticism from relatives,” the report notes. “Of the three generations, millennials felt the least amount of pressure from relatives when it came to housing choices, whereas both baby boomers and Gen Xers felt slightly more judged.”

Source: “Exploring Generational Differences in Life Goals,” Porch.com (June 4, 2019)

Retirees Aren’t Downsizing?

All the buzz about retirees downsizing and putting down roots in urban areas may be overrated. After all, neither practice is all that popular among millennial’s, who are usually the trendsetters.

Contrary to many projections, about 87 percent of boomers and Gen Xers don’t plan to make a beeline for urban down towns, instead choosing a suburban or rural setting where they can slow down and enjoy some peace and tranquility. “Data from our most recent survey clearly indicates that true urban living appeals to only a limited number of future retirees,” says Jay Mason, vice president of market intelligence for PulteGroup. “Both Gen Xers and baby boomers nearing retirement are looking for a different quality of life when considering their next move.”

 

 

Who Will Shape the 2019 Market?

The most popular names in transactions show that women, millennials, and Hispanics are shaping up as dominating forces in the housing market, according to a new analysis from realtor.com®. Ten of the top 20 and seven of the 10 fastest-growing buyer first names are mostly millennial female names, researchers found. Home deeds that contained predominantly millennial first names rose 5.3 percent year over year. Home sales associated with traditionally Hispanic first names increased 4.1 percent year over year.

Hannah, Austin, Alexis, Logan, and Taylor—three of which are predominantly female names—were the five fastest-growing first names on home sales deeds in 2018. Their frequency saw an average increase of 22 percent from 2017. However, the first names of Michael, John, David, James, and Robert remained the top five first names on sale deeds by sheer volume, but those names have decreased 3 to 5 percent since 2017, according to the study.

Source: “Women, Millennials, and Hispanics Will Shape the Future of Housing,” realtor.com® (Jan. 9, 2019)

Home Loan Payments Up 13% This Year

Monthly mortgage payments have risen an average of nearly 13 percent nationwide over the last year—or an extra $168—as buyers grapple with both higher home prices and increasing mortgage rates, according to a realtor.com® analysis. Luxury buyers are feeling the worst sticker shock, paying double the rate. In the top 10 percent of the market, owners are now paying an average $241 more per/mo.

Mortgage interest rates are about a half of a percentage point higher than they were at the beginning of the year, and the Federal Reserve has signaled there are more hikes to come.

Different generations of home buyers may have varying tolerance levels for mortgage rate fluctuations. Millennials are pursuing homeownership at a time when interest rates are at historic lows, averaging in the 4 percent range, while older buyers remember when they were in the double digits. So for millennials, “even a minor upswing [in interest rates] may seem significant,” The Wall Street Journal reports.

Source: “Rising Interest Rates Squeeze Homeowners’ Budgets,” The Wall Street Journal (April 4, 2018) [Log-in required.]

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

‘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)