Tag Archives: millennials

Home Buying a Strong Boost to Overall Economy

In their first year of ownership, new home buyers spend about $10,601 

By Jeff Sorg, OnlineEd Blog

(July 14, 2017)

canstockphoto282379female moneyA new consumer spending analysis from the National Association of Home Builders (NAHB) highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings, and home improvement projects – 2.6 times as much as other home owners in a typical year.

NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.

“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas.

“It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said.

During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.

A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall.  But the tendency of buyers to outspend non-moving owners on appliances, furnishings, and home improvements was similar.

In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.

But new owners’ impact is noticeable – and vital, MacDonald said. “The health of housing – and new home buying – is key to the overall state of our economy.”

See the study at http://www.nahb.org/spendingpatterns.

[Source: National Association of Home Builders]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

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First-Ever Report to Track the Entire First-Time Homebuyer Market

Home sales to first-time homebuyers up 11% during First Quarter 2017

By Jeff Sorg, OnlineEd Blog

(June 12, 2017)

RICHMOND, VA., June 8, 2017 – Over the past 10 years, three million first-time homebuyers have been kept out of the home purchase market, according to Genworth Mortgage Insurance, an operating segment of Genworth Financial, Inc. (NYSE: GNW), which recently launched its inaugural First-Time Homebuyer Market Report.

The report is unique in that it traces the first-time homebuyer market back to 1994, analyzing more than 20 million records of first-time homebuyers from mortgage origination data. It is the first report to track home sales to first-time homebuyers on a monthly basis and report at quarterly intervals, allowing for first-time homebuyer data to be compared against national housing market indicators. Additionally, it is the first report to separately identify first-time homebuyers enabled by low down payment mortgages, such as conventional mortgages with mortgage insurance coverage, FHA loans, VA loans, and USDA loans.

“Over the past three years, first-time homebuyers have accounted for 85 percent of the growth in home sales, and have become an important indicator for understanding market trends,” said Tian Liu, Chief Economist for Genworth Mortgage Insurance. “Their impact has already been felt in falling inventory and rising home prices, and we expect them to increasingly drive growth to businesses most exposed to this market segment.”

Mr. Liu continued, “Despite their growth in volume, many prospective buyers and housing market participants still mistakenly believe that a 20 percent down payment is required to qualify for a mortgage. By studying this group more closely, we hope to bring a better understanding about the many low down payment options available to help first-time homebuyers reach homeownership sooner.”

The report, which will be published quarterly, had several notable findings in its first edition:

1. During Q1 2017, first-time homebuyers bought the most single-family homes since 2005. During the first quarter of 2017, 424,000 single-family homes were sold to first-time homebuyers (38 percent of all single-family home sales), the most during that period since 2005, and an 11 percent increase from the same period in 2016.

2. From 2014-2016, first-time homebuyers drove 85 percent of the housing market’s expansion, the fastest rate ever. The surge in the first-time homebuyer market from 2014-2016 accounted for 85 percent of the expansion in the housing market. The annual increase of approximately 260,000 first-time homebuyers for two years in a row is unprecedented during the period of 1994-2016 and had a large impact on the overall housing market in both inventory and home price appreciation. 2016 was the strongest year for the first-time homebuyer market in 11 years, reporting two million first-time homebuyers, or 15 percent more than in 2015. First-Time Homebuyers accounted for 37 percent of all single family homes sold in 2016, up from 34 percent in 2015.

3. Three million missing first-time homebuyers since the Housing Crisis. The report estimates that historically 1.8 million first-time homebuyers purchased homes each year between 1994 and 2016, accounting for 35% of all single-family homes sold. Because of the housing crisis, only 1.5 million first-time homebuyers have been able to purchase homes in the last 10 years, three million fewer than the historical average. That pent-up demand among first-time homebuyers will likely lead to a surge in demand for entry-level single-family homes, low down payment mortgages, and a general uptick in homeownership. 6620 West Broad Street Richmond, VA 23230

4. Private Mortgage Insurance and FHA loans had the most first-time homebuyer market share from 2014- 2016. Private mortgage insurance and FHA loans accounted for 80 percent of the growth in the first-time homebuyer market from 2014-2016. This breaks out to 730,000 first-time homebuyers who used FHA loans, and 510,000 who used private mortgage insurance.

For access to the full report, as well as a brief fact sheet, visit: https://miblog.genworth.com/first-time-homebuyermarket-report-06-17/.

[Source: Gentworth Financial press release]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Zillow Group Launches RealEstate.com, Gives Millennial Buyers a New Way to Search

Buyers can search for homes by the monthly payment and down payment they can afford

By Jeff Sorg, OnlineEd Blog

(April 5, 2017)

canstockphoto44785937 guy buyer 1SEATTLE – May 2, 2017 – Zillow Group, which houses a portfolio of the largest and most vibrant real estate and home-related brands on mobile and web, today launches RealEstate.com, a new consumer real estate brand tailored to first-time home buyers, many of whom are millennials.

On RealEstate.com, buyers can search for homes in a completely new way – by the monthly payment and down payment they can afford.

Home buyers say finding a home within their budget is their top concern, even more so than finding a home in a safe neighborhood, according to the 2016 Zillow Group Consumer Housing Trends Report. Yet, first-time buyers are nearly twice as likely to exceed their budget as repeat buyers.

To help buyers understand the additional costs associated with homeownership, RealEstate.com calculates an “All-In Monthly Price” for every home and breaks out estimated expenses that might roll up into a monthly payment, including principal and interest, property taxes, homeowner’s insurance, HOA fees and utilities, and closing costs.

In addition, home shoppers will be able to search for and see information about homes in English, Spanish or Chinese.

Nearly half of all home buyers (42 percent) are first-time buyers, and the majority of first-time buyers (56 percent) are millennials. In addition to playing an increasingly larger role in the housing market, the millennial generation is more diverse than older generations.

“RealEstate.com is designed to equip the next generation of home buyers to find a home that suits their needs and budget,” said Jeremy Wacksman, CMO at Zillow Group. “We know from our research that affordability is a huge driver for home buyers, and that first-time buyers are more likely to go over budget. By tailoring the home search experience on RealEstate.com around a home’s monthly cost, we hope to make the home buying experience less daunting and even more transparent for first-time buyers.”

Millennial home-shoppers are hungry for resources to help them in their home search. They rely heavily on technology early in the buying and selling process, according to the Zillow Group report. Agents continue to play an important role with this engaged group of buyers, with 70 percent using an agent in their home search and they are more likely to find their real estate agent online (29 percent) and to evaluate agents using online reviews (61 percent).

For real estate professionals, RealEstate.com offers another way to connect with first-time home buyers and millennials. Buyers will be able to connect with real estate agents directly from the listing details page on the site. Listings come directly from multiple listing services, real estate brokerages and franchisors, agents will receive the same listing treatment they currently have on Zillow® and Trulia®.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Half of Today’s Home Buyers are Under 36

Millennials driving the housing market

By Jeff Sorg, OnlineEd Blog

canstockphoto36767385-millennial-male-1(October 18, 2016) –  Half of today’s U.S. home buyers are under 36 and reflect an increasingly racially diverse middle-class according to the first annual Zillow Group Report on Consumer Housing Trends.

As the U.S. housing market nears full recovery and the Millennial generation matures, 47 percent of people buying and 63 percent of those selling a home are doing so for the first time. These new buyers, sellers, and homeowners have old-fashioned aspirations, seeking a home that is both a good investment and a reflection of themselves. And they instinctively turn to internet research and social networks on and offline, approaching home ownership with both savviness and caution.

The 200-page Zillow Group Report on Consumer Housing Trends, which is free and available to the public, is a deep dive into the characteristics, aspirations and priorities of U.S. consumers when it comes to their homes. The report challenges longstanding conventional wisdom across all generations and sheds light on major demographic and economic trends and how they will affect the future of real estate.

“We knew the Millennial generation was playing an increasingly large role in the housing market,” said Zillow Chief Economist Dr. Svenja Gudell, “But this consumer research allows us to get a fascinating, behind-the-scenes look at how their expectations and approach are playing out in the housing market. These young adults came of age during a recession, but they are buying their first homes in a high-priced and fast-paced market. They’re using every available resource, including online research and real estate professionals, and taking on the challenge with gusto.”

“Young home buyers and sellers share their grandparents’ romantic notions about homeownership, and we’re finally seeing their home buying dreams come true in the data,” said Jeremy Wacksman, Zillow Group chief marketing officer. “These savvy consumers are doing things differently: they juggle shopping for homes to buy and rent at the same time, and they bring deep research and their vast social networks to the process.”

Here are some key findings from the report:

  • While shopping for a home, 52 percent of buyers said they also considered renting, and only 46 percent of buyers got the first home on which they made an offer, demonstrating that in today’s fast-moving market, disappointment and competition are now part of the process.
  • While 56 percent of buyers save up for a down payment a little at a time, 32 percent find savings are not enough and rely on other sources, such as gifts, loans, and cashing in their retirement savings.
  • Millennials, who will define the future of real estate, include their social networks in their real estate transactions and expect their real estate agents to help with more than logistics – looking to them for strategic advice and remodeling ideas.
  • First-time buyers rent longer than previous generations. When they do buy, they typically spend just as much as Baby Boomers on a home that is only slightly smaller than homes purchased by repeat buyers.
  • It’s not just Millennials who are shopping online for real estate. Nine out of 10 buyers and sellers under 65 depend on both real estate agents and online sites and apps.
  • Most Americans (83 percent) want a single-family home, and more than half (52 percent) live in the suburbs. Of home-owning Millennials, 47 percent live in the suburbs.
  • Renters are disproportionately women and people-of-color, and most make less than $50,000 a year. Their top concerns are budget, safety, and finding a home that allows pets.
  • The first annual Zillow Group Report is the largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions.

Source: Zillow Group

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Zillow® is a Registered Mark of Zillow, Inc.

For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

First-Time Homebuyers Older, More Often Single

The average first-time homebuyer is about 33, at the front end of the millennial generation

By Jeff Sorg, OnlineEd Blog

hello im a millennial name tagOnlineEd (August 17, 2015) – According to a report just released by  Zillow® analysts, today’s first-time homebuyer is older and more likely to be single than first-time homebuyers in the 1970s and 1980s.

The study also found that Americans are renting for an average of six years before buying their first homes. In the 1970s, they rented for an average of 2.6 years. They’re also spending more of their incomes to buy: 2.6 times their annual income today, versus 1.7 times their annual income in the 1970s. Part of that can be attributed to the housing markets where millennials are moving: more expensive cities on the coasts, where there are growing job markets.

The average first-time homebuyer is about 33, at the front end of the millennial generation. Their median income is $54,340, which is about the same as what first-time homebuyers made in the 1970s, when adjusted for inflation.

In the late 1980s, 52 percent of first-time homebuyers were married. Today, only 40% were married.

“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Zillow Chief Economist Dr. Svenja Gudell. “We know millennials value home-ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes.”

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

Millennials Outnumber Baby Boomers and Are Far More Diverse

Millennials, or America’s youth born between 1982 and 2000, now number 83.1 million

By Jeff Sorg, OnlineEd Blog

ethnic 1WASHINGTON (July 25, 2015) – Millennials, born between 1982 and 2000, number 83.1 million and represent more than one quarter of the nation’s population. Their size exceeds that of the 75.4 million baby boomers, according to new U.S. Census Bureau estimates released today. Overall, millennials are more diverse than the generations that preceded them, with 44.2 percent being part of a minority race or ethnic group (that is, a group other than non-Hispanic, single-race white).

Even more diverse than millennials are the youngest Americans: those younger than 5 years old. In 2014, this group became majority-minority for the first time, with 50.2 percent being part of a minority race or ethnic group.

Reflecting these younger age groups, the population as a whole has become more racially and ethnically diverse in just the last decade, with the percentage minority climbing from 32.9 percent in 2004 to 37.9 percent in 2014.

Five states or equivalents were majority-minority: Hawaii (77.0 percent), the District of Columbia (64.2 percent), California (61.5 percent), New Mexico (61.1 percent) and Texas (56.5 percent). Among the remaining states, Nevada is the closest to crossing this threshold, with a population 48.5 percent minority. More than 11 percent (364) of the nation’s 3,142 counties were majority-minority in 2014. Five reached this milestone during the year beginning July 1, 2013: Russell, Ala.; Newton, Ga.; Eddy, N.M.; Brazoria, Texas; and Suffolk city, Va.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

Millennials Willing to Sacrifice Starbucks Visits To Finance Home Purchase

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Millennials are ready to give up some conveniences in order to finance a home purchase

(Washington DC, July 14, 2015) — A majority of millennials (ages 24-34) are willing to sacrifice modern day conveniences like cell phones, internet, cable and Starbucks in order to save for a down payment on a home. A new survey from the Collingwood Group shows 65% of millennials polled are somewhat to very likely to give up on at least one of the above to finance a home purchase. But when it comes to financing their first homes millennials (also known as “generation Y”) think more like their parents. The Collingwood Group survey finds close to 75% of millennials would be more comfortable applying for a mortgage with a traditional bank over an alternative lender:

And despite the millennial generation’s internet focus, they are not willing to pay more for a streamlined, online mortgage process. Interestingly, if millennials had already gone through the mortgage application process, they were slightly more inclined to pay more for a more streamlined process (23% vs 21%). Instead, just like previous generations it’s the cost that matters most to them.

The survey further questions perceptions that millennials prefer city life with close to 70% of those surveyed saying they prefer buying their first home in the suburbs. The Colllingwood Group Chairman Tim Rood says, “It’s fascinating that millennials want to live in the city while they’re single but want the American Dream of white picket fences and yards when they are ready to buy, according to our exclusive poll. That is so critical given the ambiguity and fear that millennials will get hooked on urban conveniences and abandon the suburbs, leaving baby boomers and other downsizing households in the lurch.”

He adds, “The data on millennials that own their home (23%) who would pay more for a better process is also notable. On the most expensive purchase of their lives they are willing to pay more because the current process is so God awful.” Rood notes, “Price matters to millennials who have lower incomes and more debt and the mortgage industry MUST figure out ways to become more efficient and streamline operations to reduce costs. The whole process is clearly ripe for disruption.”

The poll was conducted July 5-8, 2015 among a random group of 650 people.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

  This article was published on July 1, 2015. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.