Millennials Finally Flee Parents’ Homes

The pace of young adults leaving their parents’ homes is accelerating significantly, Fannie Mae’s Economic and Strategic Research Group notes in a new analysis.

Young adults aged 24 to 25 in 2013 and 26 to 27 in 2015 residing with their parents dropped by 7.6 percentage points. On the other hand, those who passed through that same age range between 2010 and 2012 saw a decline of only 5.4 percentage points, researchers note.

Millennials in their 20s or early 30s saw their income, adjusted for inflation, grow by at least 23 percent between 2013 and 2015 when compared to 2010 and 2012. Further, their incomes are at least 81 percent greater than between 2008 and 2010.

Also, millennials between 2013 and 2015 were getting married at a markedly faster rate than their predecessors did in that same age range during the recession and the recovery thereafter, Fannie Mae’s report notes.

Source: “Starting to Launch: Millennials Are Leaving Mom and Dad’s Basement,” Fannie Mae’s Housing Insights (2017)

Fannie Mae: Affordability Woes Expected in 2016

Housing affordability will likely be a challenge in many markets this year as home prices continue to escalate, according to a new report by mortgage-financing giant Fannie Mae.

The main struggle for the economy and the housing market this year will be the “challenge of housing affordability coupled with expected modest economic growth,” Fannie Mae notes in its latest Economic & Strategic Research Group report.

Researchers predict an increase in household income and job security this year, while lending standards ease up and home buyers have easier access to mortgage credit. However, those strides will likely be offset somewhat by higher home prices, particularly in the lower-end of the market, that likely will continue to outpace household income growth. That could chip away at affordability, Fannie Mae states.

“We ended 2015 with a positive jobs report, an annual record high for auto sales, and the housing market poised to be the strongest since 2007,” notes Fannie Mae Economist’s Doug Duncan. “The first Fed funds rate hike since 2006 has had a minimal impact on mortgage interest rates so far, and we believe mortgage rates will edge up only gradually, ending the year around 4.2 percent.”

 

Source: “Fannie Mae: Housing Affordability Will Continue to be a Challenge in 2016,” HousingWire (Jan. 18, 2016)