Gen Z: They’re Not Too Young to Buy a Home – Industry Outlook

By August 19, 2019Industry Outlook

20M Owners Could Lower Mortgage Payments by Refinancing – Based on a recent analysis from Black Knight Mortgage, rates are hovering near three-year lows, and more homeowners may want to start taking advantage. Up to 20 million homeowners could “theoretically” see a 75-point drop in mortgage rates by refinancing. For homeowners with a credit score of at least 720 and with 20% equity in their property, they could see savings of nearly $270 per month from lower rates. “Millions of homeowners could save money by refinancing,” Holden Lewis, home expert for NerdWallet, told “That includes most people who bought homes in 2018. Seriously, even if you bought your home last year, you could save money by refinancing right now.” Homeowners are starting to respond to lower rates. Refinances are at the highest point since mid-2016 and have doubled since late July. Refinances are up 37% over the past week alone, according to the Mortgage Bankers Association.
Source and link to the full article: “Refinances Double; 20 Million Homeowners Could See a Mortgage Rate Drop,” (Aug. 14, 2019)

Fannie, Freddie Say New Mortgage Forms Will Be Delayed – According to the government-sponsored enterprise (GSE) announcement recently, they will delay the mandatory use by lenders of the redesigned Uniform Residential Loan Application which was originally to take effect on February 1, 2020. The Federal Housing Finance Agency has requested changes to the proposed URLA form. At issue is a Language Preference and Homeownership Education and Housing Counseling question, which the GSEs say will now be removed from the redesigned form and included on a separate voluntary form. The Mortgage Bankers Association had opposed including the language question because of the “customer relations issues the question would cause if lenders could not actually serve borrowers in their preferred language, and due to unresolved operational and legal questions raised by the language preference information,” MBA CEO Bob Broeksmit wrote in a letter to members.
Source and link to the full article: “Fannie Mae, Freddie Mac Delaying Use of New Uniform Residential Loan Application,” HousingWire (Aug. 8, 2019)

Gen Z: They’re Not Too Young to Buy a Home – According to the latest Industry Insights Report from TransUnion, Generation Z is growing up. Those born in 1995 or after are taking out more credit and increasingly eyeing homeownership. About 14 million of Gen Z consumers who are 18 or older are taking out credit, and that includes those who are taking on mortgages. “Both the newest and oldest members of the credit-eligible Gen Z generation are beginning to enter the credit market for the very first time,” says Matt Komos, vice president of research and consulting at TransUnion. “The rapid growth in Gen Z credit activity is occurring despite many of these individuals having grown up during the Great Recession. Though the recession itself landed less than two years, its impact was felt for several years afterward. As we see more members of this group come of age, we naturally expect continued growth in credit activity by Gen Z.” While credit cards are the most popular forms of credit among Gen Z consumers, they are increasingly taking out mortgages. Mortgages are still the credit product Gen Z consumers are least likely to have, with only 0.5% of mortgages held by this age group.

Source and link to the full article: “As Gen Z Comes of Age, Credit Market Activity Shows Significant Growth,” TransUnion (Aug. 14, 2019)

Mortgage Rates Hover Near Record Lows – Based on Freddie Mac reports, the 30-year fixed-rate mortgage continued to hover near historical lows recently, lowering borrowing costs for home buyers and refinancing homeowners. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.60% recently, unchanged from the previous average. “The sound and fury of the financial markets continue to warn of an impending recession; however, the silver lining is mortgage demand reached a three-year high this week,” says Sam Khater, Freddie Mac’s chief economist. “The decline in mortgage rates over the last month is causing a spike in refinancing activity as homeowners currently have $2 trillion in conventional mortgage loans which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up 7% from a year ago.”

Source and link to the full article: Freddie Mac


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