Millennials: We Don’t Want to Be Renters – Industry Outlook

By December 1, 2017Industry Outlook

FHFA Raises Conforming Loan Limits Again – According to the Federal Housing Finance Agency’s announcement, it will raise its conforming loan limit on January 1, 2018. Mortgage financing giants Fannie Mae and Freddie Mac will allow maximum conforming loan limits for mortgages in most parts of the U.S. to be $453,100. For 10 years, the FHFA had set the conforming loan limit in most places at $417,000. But as home prices started rising, the FHFA bumped up the conforming loan limit in 2017 to $424,100. As prices continued to move higher this year, the FHFA has raised limits again for 2018.

New-Home Sales Surge to 10-Year High – The Commerce Department reported that sales of new single-family homes jumped 6.2 percent in October to a seasonally adjusted annual rate of 685,000 units. This marks the highest pace for new-home sales since October 2007. “The October report shows strong sales growth at entry-level price points,” says Granger MacDonald, chairman of the National Association of Home Builders. “In markets where builders are able to provide homes for families with different household budgets, they can fulfill a growing demand for housing.”

Millennials: We Don’t Want to Be Renters – According to Bloomberg, millennials show the same desire for homeownership as their parents and grandparents. Also traditional suburban properties appeal to them more than renting or buying in cities. Many economists have acknowledged that the slow path to homeownership for young adults is contributing to record-low homeownership rates. But for two consecutive quarters, the homeownership rate among those ages 35 and younger has been on the rise. Some economists predict that millennials will eventually own homes at similar rates as their parents. Rents, however, are taking a bigger bite out of household budgets, making it difficult for young adults to save enough for a down payment.

5 Housing Trends to Watch for in 2018 – Based on realtor.com®’s 2018 National Housing Forecast, home shoppers may have it easier in 2018. Inventory constraints of for-sale homes and rising home prices may finally start to ease next year. “Next year will set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com®. “Inventory increases will be felt in higher priced segments after the spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.” But the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com® adds.

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