Job growth among millennials will drive 2015 Real Estate Market

This is re-blogged from Realtor.com:

Despite decreasing affordability for houses next year, expect more home sales in 2015 — in part due to increased purchases by millennials who are finding jobs and expanding their families.

The unemployment rate for Americans between 25 and 34 hit 6.1% in November, the Labor Department reported Friday. That’s the lowest level since July 2008.

In general, jobs for those younger than 35 years old are being created at a faster pace this year, said Jonathan Smoke, chief economist of Realtor.com, which released its 2015 housing forecast earlier this week. Realtor.com is owned by News Corp., as is MarketWatch.

“The tired old story that millennials are unemployed and living with their mom and dad — those circumstances have changed quite a bit in 2014,” Smoke said.

What’s more, we’re at the beginning of a mini baby boom, prompting more millennial parents to seek homes large enough for them and their offspring, Smoke added.

The last huge spike in births was in 2007, when a record high number of births were reported (4.32 million), according to data from the National Center for Health Statistics. For the first half of 2014, the growth trend is looking similar to that year, Smoke said. And if the trend holds, there could be more than 4 million births in 2014 — putting it in the top 25 years for births since 1909, when records began — “but more importantly setting the stage for an even bigger 2015,” Smoke said.

“Housing is driven by life,” Smoke said, “and [members of] the largest generation in history are coming into their own.” The median age of a millennial is 24; the older half of the generation is now between the ages of 25 and 34, as Smoke defines it.

Of active millennial home shoppers surveyed this summer, 86% said the primary trigger for purchasing a home was because they had a change in their household size or were anticipating one, according to a home shopper survey of 1,236 participants by BDX, which operates the nation’s largest network of new home web sites. BDX is a joint digital marketing venture between Move Inc. (the News Corp. subsidiary that runs Realtor.com), and Builder Homesite Inc. About 32% of millennial buyers said they were planning to increase their family size, and 18% said their family size had already increased.

That said, the affordability of homes is expected to decline 5% to 10% next year, according to Realtor.com’s 2015 housing forecast. That’s due to expected home price appreciation (prices are expected to be up 4% to 5% next year, compared with 2014) and rising mortgage rates (expected to rise mid-year, with the 30-year fixed-rate mortgage reaching 5% by year’s end). Luckily, the increased cost of buying a home will be at least somewhat offset by rising incomes, he said.

Still, the rise in mortgage rates will likely mean more people exploring adjustable-rate mortgages, which offer lower initial rates than fixed-rate mortgages, Smoke added. With rates on fixed-rate mortgages currently so low, only 9.8% of all conventional mortgages for the purchase of a single-family home in the third quarter of 2014 were adjustable-rate mortgages, according to the Federal Housing Finance Agency.

Smoke is forecasting an 8% increase in existing-home sales next year, 16% growth in home starts (21% growth in single-family home starts), and a 25% increase in new-home sales. The homeownership rate should decline slightly, though the rate of homeowners younger than 35 years old should increase, he added.

The top 10 markets for housing growth next year, according to Realtor.com: Atlanta-Sandy Springs, Ga.; Dallas-Fort Worth-Arlington, Texas; Denver-Aurora-Broomfield, Colo.; Des Moines-West Des Moines, Iowa; Houston-The Woodlands, Texas; Los Angeles-Long Beach, Calif.; Minneapolis-St. Paul-Bloomington, Minn.; Phoenix-Mesa-Glendale, Ariz.; San Jose-Sunnyvale-Santa Clara, Calif.; and Washington, D.C.

100 Day Gratitude Challenge

As you go through your holiday season, visit with friends and family, please make an effort to be mindful, and to be grateful.  We here at the Michael Mann Team are grateful for our families, our customers and referral partners.  We are grateful for the opportunity to make a difference in people’s lives and the opportunity to make what could be a stressful time, a little less stressful.  We are grateful for the heroes in our community that we are able to help, and the support of good people who donate thier time and treasure for good deeds and deserving recipients.

As you make your way through the holidays and into the new year, we hope that you will remind yourself to be grateful, and to share this feeling with those around you.

100 Day Gratitude Challenge.

Mortgage guidelines easing, Interest rates rising, and who is going to own your clients?

For More Information on the 3% down and Specific Freddie and Fannie Guidelines click here!

 

Register for the upcoming lunch and learn on January 15th at 11:30am:

USDA says “No More Loans”…and, say goodbye to the Good Faith Estimate

THE USDA SAYS NO MORE LOANS…

USDA SAYS “no more loans” Say goodbye to the good faith estimate and Where have all the Loan Officers gone??

Next week we are giving away an Kodak Zi-8 HD video camera…. To enter all you need to do is comment below, comment on the show, or comment on my beard… just leave a comment, we will pick the winner at random on next week’s show……

On November 21st USDA said they were no longer accepting any new loans for the rest of the month… They completely shut the door on all new USDA loans…. They did this in order to improve the efficiency in processing. So they opened their doors up to new loans as of December and we are excited to see the faster processing of their loans.

Speaking of USDA, this is just one of the loan programs in which The Michael Mann Team specializes. Here is just one example of a USDA loan that we did this past month: The loan submitted to processing on November 5th and Clear to close on November 20th… The original closing date was for December 12. This is just 1 example of 4 USDA loans that we got Clear To Close in 30 days or less… On to other news:

Realtors and Lenders, Say good-bye to the good faith estimate.. That’s right, apparently in the August of 2015 we will all be saying good-bye to the good faith estimate and it will be replaced by… (Drum roll please)… A Loan Estimate….

Yes a loan estimate. That is the new form that is a result of the 2000 page regulation that the government spent a whopping 1 million dollars….. I’m not sure how much they spent but you know how it probably wasn’t pretty…. Also there will be another new form called a closing disclosure. The closing disclosure has the same format as the Loan estimate form making it easier to tell if your loan terms change between the time you apply and the time you close. But until august of next year, lenders will be using the same old forms as we always have….

And last but not least remember that song by Paula Cole, Where have all the cowboys gone? Well they will be making a remix of that song in 2016…. It will be named where have all the LO’s gone??? With all the changes and the additions in 2015 we will be seeing another mass exodus of Loan Officers from the business. So make sure your LO is here to stay. LO’s should work with a reputable company that has a track record for staying ahead of the curve and the ability to make the changes necessary to stay in the game. If you have a great Loan Officer that may not be at the right company, Fairway Mortgage is looking for a few good men and women. Please call us with your recommendation and perhaps we can set up a private meeting…

Well thanks for watching, don’t forget to subscribe above or please feel free to hit the share button, send it to your friends and comment below to win the HD video camera…. Have an outstanding day!