Gen Z Is Already Planning for Homeownership – Industry Outlook

By November 13, 2018Industry Outlook

Fed Votes to Leave Rates Unchanged –According to the Federal Reserve they are keeping its key interest rate on hold, but signaled that rate hikes and tightened borrowing costs are likely on the horizon. The Fed’s rate does not directly influence mortgage rates but does tend to have an effect. “The labor market has continued to strengthen and economic activity has been rising at a strong rate,” the U.S. central bank said in a statement. The Fed’s only note of caution on the economy was that growth in business investment had moderated in the third quarter. But inflation remains near the 2 percent target. The Fed, which has already increased rates by one-quarter point three times this year, indicated that its next rate hike will likely be in December.

1 in 4 Homeowners Are Now “Equity Rich” –Based on ATTOM Data Solutions latest report, rising home prices are helping homeowners get richer and richer. Equity-rich properties represented 25.7 percent—or nearly 14.5 million—of U.S. properties in the third quarter, a record high. “Equity-rich” means the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value. “As homeowners stay put longer, they continue to build more equity in their homes, despite the recent slowing in rates of home price appreciation,” says Daren Blomquist, senior vice president with ATTOM Data Solutions.

“Alexa, Get Me a Mortgage” –According NTT Data Services reports, they have implemented an Amazon Alexa skill that is catering to mortgage companies. It allows loan officers to use voice commands to look up and check the status of loans. Megan Geyer, NTT data services director of customer experience for financial services, says they believe there are two main types of skills that can be used with Alexa: informational, where Alexa looks up and gives the user specific information and transactional, where the user can ask Alexa to perform an action. “Companies don’t know if it’s too early to be investing in this, but right now they should be at least exploring how voice interface could complement their digital experience,” Geyer says. “They should see if there is a natural fit for voice interface to solve problems. If there is a natural fit then that’s where voice interface should be.” As HousingWire reports, it won’t be long before consumers are saying, “Alexa, get me a mortgage.”

Gen Z Is Already Planning for Homeownership –Based on a new study by realtor.com®, it looks like Generation Z (particularly those between the ages of 18 to 24) is eager to get an early start into homeownership and they’re two times more likely than previous generations to be saving for a home by the age of 25. “Gen Zers don’t just want to become homeowners; they want to do it at a younger age and we found that they’re saving or planning to save for it accordingly,” says Danielle Hale, realtor.com®’s chief economist. “Their desire for homeownership may be similar to that of millennials and Gen Xers, but graduating into one of the best labor markets in generations might give them the boost they need.” Nearly 80 percent of Gen Zers surveyed say they want to (or already do) own a home, which is comparable to millennials and Gen X (both 82 percent). Only 4 percent of Gen Zers are not sure if they want to own a home. The cost of homeownership is the biggest barrier Gen Z respondents cited. But they aren’t shy about asking their parents for some help. Fifty-six percent of Gen Zers surveyed said “maybe” or “yes” to expecting or receiving financial help from their family.

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