Who Needs to Downsize?

A growing number of baby boomers are choosing not to downsize in retirement. Instead, they’re opting to remain in the homes where they raised their children, USA Today reports. But their reluctance to move is contributing to low inventory across the country, says realtor.com® Chief Economist Danielle Hale.

Baby boomers “have refused to follow what the traditional expectations were,” Barbara Risman, a sociology professor at the University of Illinois at Chicago, told USA Today. Baby boomers, mostly between the ages of 54 to 73, are working longer and, therefore, putting retirement off longer than previous generations. Their millennial children increasingly are living at home with them and staying well into adulthood.

For baby boomers who do plan to move, 43% say they want their next home to be the same size as their current one. Twenty-two percent say they want their next home to be even larger, according to a January surveyof 50- and 60-year-olds by Del Webb.

Homeowners’ Top Neighborhood Gripes

The wrong neighborhood can make for an unhappy homeowner.

A new survey from Porch.com, a home remodeling website, surveyed about 1,000 consumers to find the biggest neighborhood turnoffs. Noise, traffic, and crime were the chief concerns of buyers. Noise topped the list of neighborhood turnoffs, with 41% of respondents citing it as their top gripe, according to the survey. In fact, noise proved to be an even bigger deterrent than a high crime rate.

More details on illustrations at source: “Moving Matters,” Porch.com (May 2019)

Home Loan Interest Rates Update

Home buyers saw mortgage rates edge lower again this week, with rates remaining well below year ago levels.

“While signals from the financial markets are flashing caution signs, the real economy remains on solid ground with steady job growth and five-decade low unemployment rates, which will drive up home sales this summer,” said Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending May 16:

  • 30-year fixed-rate mortgages averaged 4.07 percent, with an average 0.5 point, dropping from last week’s 4.10 percent average. A year ago, 30-year rates averaged 4.61 percent.
  • 15-year fixed-rate mortgages averaged 3.53 percent, with an average 0.4 point, falling from last week’s 3.57 percent average. A year ago, was 4.08 percent.
Source: Freddie Mac

Mortgage Rates ‘Drop This Week’

Mortgage rates are showing signs of moderating this month, following increases in April. Borrowers are discovering much lower rates compared to a year ago.

“A combination of low mortgage rates, a strong job market, and modest wage growth should spur home buyer interest and also serve as an incentive for homeowners looking to refinance this spring,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending May 9:

  • 30-year fixed-rate mortgages: averaged 4.10%, with an average 0.5 point, falling from last week’s 4.14% average. Last year at this time, rates averaged 4.55%.
  • 15-year fixed-rate mortgages: averaged 3.57%, with an average 0.4 point, falling from last week’s 3.60% average. A year ago, 15-year rates averaged 4.01%.
Source: Freddie Mac

Multiple Refinance Problems

It can be financially harmful to borrowers and investors to repeatedly refinance their mortgages, warns Ginnie Mae, a government-backed firm that guarantees government mortgage bonds. That’s why the institution is taking steps to crack down on the practice of “churning,” where lenders push borrowers to refinance their home loans over and over again. Homeowners may be drawn to the idea of lowering their monthly mortgage payments, but multiple refinances can lead to more lender fees and a higher bill in the end.

Ginnie Mae started to take action against individual lenders last year when their activity suggested they were pushing refis on borrowers, even when they wouldn’t benefit from it. Ginnie Mae is honing in on mortgages where borrowers pull cash out of their home during a refinancing. The loan then results in more than 90% of value.

Source: “Ginnie Mae Moves to Crack Down on Repeated Refinancers,” The Wall Street Journal (May 3, 2019) [Log-in required.]