Older Home Buyers Are Opting to “Smart-Size” Over Downsize – Industry Outlook

By September 30, 2019Industry Outlook

Mortgage Rates Recede After Last Week’s Uptick – Based on Freddie Mac reports, September has proven to be the most volatile month for the 30-year fixed-rate mortgage since March. Average weekly movement on rates has fluctuated 11 basis points in that time, Freddie Mac reports. Recently, mortgage rates fell after posting the largest uptick in nearly a year. “With both the unemployment rate and mortgage rates below 4% and near historic lows, it is no surprise that the housing market regained momentum in home sales and construction is at or near decade highs,” says Sam Khater, Freddie Mac’s chief economist. “The fall housing market is poised to continue with steady gains in prices and solid sales activity.”

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Source and link to the full article:  Freddie Mac

Older Home Buyers Are Opting to ‘Smart-Size’ Over ‘Downsize’ – Based on The Washington Post report, retiring baby boomers are finding that downsizing is not always the answer. Empty nesters transitioning from their longtime houses are finding they still need plenty of space. “Older home buyers today are ‘smart-sizing’ rather than just downsizing,” Mollie Carmichael, a principal with the housing research firm Meyers Research, told The Washington Post. “Affordability is a big priority before and during retirement, so people think they need to downsize for financial security, but that’s not always true.” Carmichael says her organization’s research has shown that 30% of people who have moved to age-restricted communities end up moving to a larger place within the community after they’ve lived there for a while. The average home size in active-adult communities, which are geared for ages 55 and older, is 1,500 to 1,800 square feet. “They just want a little extra space and yet want to stay in the neighborhood,” Carmichael says.

Source and link to the full article:  “Why Many Older Home Buyers Are ‘Smart-Sizing,’ Not Downsizing,” The Washington Post (Sept. 21, 2019)

Redemption in New-Home Sales? – According to the Commerce Department, lower mortgage rates are prompting more home buyers to consider new-home construction, builders say. Sales of newly built single-family homes surged in August, rising 7.1% to a seasonally adjusted annual rate of 713,000 units. This marked the second time in three months that new-home sales rose above 700,000. Further, new-home sales have now jumped 18% compared to a year ago. The latest report follows on the heels of other positive housing data released recently. Housing starts and building permits surged to a 12-year high in August. Home resales also increased to the highest level in 17 months, the National Association of REALTORS® reported. “This positive data caps off a month of redemption for the housing market,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Fla. “If American consumers remain in good spirits, there is no reason this positive momentum can’t continue, so long as prices remain in check and housing supply does not get critically low.”

Source and link to the full article:  National Association of Home Builders and “Lower Mortgage Rates Stimulate Lethargic U.S. Housing Market,” Reuters (Sept. 25, 2019)

Americans’ Debt Anxiety Is Real – According to Northwestern Mutual’s 2019 Planning & Progress Study, Americans are getting anxious about their debt. About one-third (34%) of Americans’ monthly income goes toward paying off debt. It’s no wonder 45% of Americans say debt makes them feel anxious on at least a monthly basis, according to a survey of about 2,000 American adults. U.S. adults aged 18 and older reported having an average of $29,800 in personal debt, which excludes mortgages. That does mark an improvement over last year when personal debt averaged $38,000. Still, consumers are plenty worried about it. One in five respondents says that their debt makes them feel physically ill at least once a month. Generation X reported the highest levels of personal debt with $36,000, on average, followed by baby boomers at $28,600. Millennials and Gen Z had the lowest at $27,900 and $14,700, respectively.

Source and link to the full article:  Northwestern Mutual

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