Why Homeownership Makes People Happier – Industry Outlook

By September 16, 2019Industry Outlook

Mortgage Rates Reverse, Post Increases – Based on Freddie Mac reports, the 30-year fixed-rate mortgage reversed course recently, rising to an average of 3.56%. Despite the uptick, this is the first time that the 30-year fixed-rate mortgage has been under 3.6% for more than four consecutive weeks since the fourth quarter of 2016, Freddie Mac reports. “Pipeline purchase demand continues to improve heading into the late fall with purchase mortgage applications up 9 percent from a year ago,” says Sam Khater, Freddie Mac’s chief economist. “The improved demand reflects the healthy underlying consumer economic fundamentals, such as a low unemployment rate, solid wage growth, and low mortgage rates. While there has been a material weakness in manufacturing and consistent trade uncertainty, so far, the American consumer has proved to be resilient with solid home purchase demand.”


Source and link to the full article:  Freddie Mac

Why Homeownership Makes People Happier – According to Bank of America’s latest Homebuyer Insights Report, most Americans have no regrets about buying a home, in fact, it’s made them happier. Ninety-three percent of Americans say they are happier after buying a home, and 83% would never go back to renting, according to the survey of nearly 2,000 consumers. Most owners say they have an emotional attachment to their home, and ownership also has improved their lifestyle and variety of hobbies. “We know how much ownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” says D. Steve Boland, head of consumer lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.” Eighty-eight percent of survey respondents say that buying a home is the best decision they’ve ever made. Seventy-nine percent say that owning a home has changed them for the better.

Source and link to the full article:  “2019 Fall Homebuyer Insights Report,” Bank of America (September 2019)

Priced Out Young Adults Shop for Investment Homes Far Away – According to Curbed.com reports, millennials who have been priced out of their local housing market are jumping online and searching for investment properties to buy elsewhere. “We find that millennials see the investment landscape very different than their parents do,” Alan Lewis, co-founder of DiversyFund, a platform where users can invest in multifamily developments online, told Curbed.com. “They’re jaded by the homebuying story, they’ve seen people overpay during the peak and be upside-down in their homes, and they see stock market volatility and don’t have an appetite for it. They want something that offers a departure from the rollercoaster ride.” But that doesn’t mean they’re shunning homeownership. They believe it’s still lucrative to own, but when they live in an area where it’s harder to achieve, they’re finding another way to break into ownership.

Source and link to the full article:  “Millennials, Priced Out of Homes Locally, Shop for Investment Properties Online,” Curbed.com (Sept. 10, 2019)

How Badly Does a Foreclosure Hurt Credit Scores? – Based on LendingTree research reports, a strong housing market over the last few years has put the foreclosure crisis in the rearview mirror, but many Americans are still haunted by their past housing challenges. New data shows that they should be able to comfortably leave their past behind them. In 2018, there were more than 600,000 homes in foreclosure in the U.S., the lowest number since the 2008 financial crisis. Foreclosures peaked at 2.9 million in 2010. Homeowners who faced a foreclosure saw it ding their credit scores and impact their ability to buy real estate in the future. LendingTree researchers recently analyzed how credit scores trend after a foreclosure. They assessed the loan terms offered to borrowers with a foreclosure on their record compared to those without. Consumers who underwent a foreclosure are able to re-emerge as a home buyer in as little as two years. They tend to pay a premium, however. Borrowers with a credit score above 740 paid an average rate of 5.02% compared to 4.70% for borrowers who did not have a foreclosure on their record, according to the study. “The foreclosure dominates your credit score in the first two years after,” LendingTree researchers note in the study. “This is evident from interest rates not correlating to credit scores when borrowing two years after a foreclosure. However, when borrowing after three years or more, the expected pattern emerges with higher credit score borrowers paying lower interest rates.”

Source and link to the full article:  “The Cost of Foreclosure,” LendingTree (Sept. 4, 2019)

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