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Don't expect 'huge swings' on mortgage ratesElection uncertainty contributed to an upward swing in mortgage rates during October. But now that we have a president-elect, mortgage rates are expected to gradually come down over time, Lautz said. Experts say that mortgage rates might head into a "bumpy" or "volatile" path over the next year. "Our expectation is that rates are going to be in the 6% range as we move into 2025," she said. For example, if you bought your home around this time last year, when mortgage rates peaked at around 8%, you might benefit from a mortgage refinance, Lautz said.
Persons: Freddie Mac, it's, Jessica Lautz, Lautz, Jerome Powell, Robert Dietz, Jessica Lautz Jessica Lautz, Jeff Ostrowski, Jacob Channel Organizations: Getty, Federal Reserve, National Association of Realtors, Treasury, Trump, Federal, CNBC Locations: U.S
'The biggest issue of housing today'The housing shortage in the U.S. is "the biggest issue of housing today," said Orphe Divounguy, senior economist at Zillow. As of mid-2023, there's a housing shortage of 4 million homes, according to the NAR. Rent prices increased faster than tenants' wages during the pandemic. "We're seeing renters staying renters for longer because affordability has been so squeezed," he said. High rent prices not only affect your ability to save money to buy a home, it can affect your ability to pay down any existing debt, Lautz said.
Persons: homebuyer, Jessica Lautz, Orphe Divounguy, Jonathan Scott, Scott, Selma Hepp, Divounguy, Lautz Organizations: National Association of Realtors, NAR, HGTV, CNBC Locations: U.S
Like first-time buyers, the typical repeat buyer has gotten older, with their median age increasing to 61 years from 58 last year. Repeat buyers’ median household income rose to $114,300 from $111,700 in the last year, as well, according to the NAR. First-time homebuyers may have trouble competing with repeat buyers, who could possibly have sold an existing home to purchase a new one. Repeat buyers were able to enter the housing market with much larger down payments (median 23%) than first-time homebuyers (median 9%). Thirty-one percent of repeat buyers paid all cash for their homes.
Persons: homebuyers, homebuyer, , Jessica Lautz, ” Lautz Organizations: CNN, National Association of Realtors, NAR Locations: America
Mortgage rates may affect payoff calculusThe mortgage payoff calculus may change based on whether people can outearn their mortgage rates with safe, guaranteed investments, Benz said. For mortgage rates that are 6% or more, paying that balance off will provide a guaranteed return. Admittedly, the argument over whether to pay off mortgages is "much more emotional and psychological than it is financial," Jenkin said. The big money questions people ask themselves to prepare for retirement are just as important as the emotional ones. What brought you joy while you were working may change in retirement, Michael Finke, a professor of wealth management at The American College of Financial Services, tells Benz.
Persons: Jessica Lautz, Benz, JL Collins, Collins, Robert Daly, Ted Jenkin, Jenkin, Michael Finke Organizations: Joint Center for Housing Studies of Harvard University, National Association of Realtors, Benz, Getty, CNBC, CNBC FA, The American College of Financial Services Locations: Atlanta
Detailed below is what Harris and Trump have proposed in order to address these worries. Vice President Kamala Harris and former President Donald Trump have both pledged to address high prices by boosting the supply of homes. Related storiesThe Democratic candidate also said she plans to expand the existing low-income housing tax credit, which incentivizes the rehabilitation or building of housing targeted at lower-income households. As president, Trump proposed major cuts to the federal Department of Housing and Urban Development's budget, including slashing housing assistance and community development aid. AdvertisementWhile in office in 2017, Trump proposed a budget for the 2018 fiscal year that would have significantly cut rural housing subsidies.
Persons: Harris, Trump, , Kamala Harris, Donald Trump, Daryl Fairweather, Redfin, Fairweather, Jessica Lautz, multifamily Organizations: Service, Business, Democratic, Peterson Institute for International Economics, Builders, of Housing, Urban, National Association of Realtors, Democratic Party Locations: America
Using home equity is "certainly a less expensive borrowing option than resorting to personal loans or credit cards," McBride said. As of August 7, the current average home equity loan interest rate is 8.59%, according to Bankrate. The average HELOC interest rate is 9.37%. To compare, the average personal loan interest rate is 12.38% , Bankrate found. The average credit card interest rate stands at 24.92%, according to LendingTree.
Persons: Iuliia, McBride, Bankrate, Houzz, Jessica Lautz, We've Organizations: Houzz, National Association of Realtors, NAR Locations: U.S
watch nowHousing inflation has remained stubbornly high even as inflation in the broad U.S. economy has cooled significantly from peak levels during the pandemic era. At a high level, "shelter" inflation is a measure of U.S. rental prices, said Jessica Lautz, deputy chief economist at the National Association of Realtors. Why CPI shelter inflation has fallen slowlyThe pullback in shelter inflation has been slower than expected, economists said. How the CPI reflects homeownershipThe shelter inflation index is meant to measure the average cost of housing in the U.S. economy, J.P. Morgan's Seydl said. "When it comes to the CPI, [shelter] does not mean the cost for homes for purchase," said the NAR's Lautz.
Persons: Joe Seydl, Jessica Lautz, Olivia Cross, We've, Jerome Powell, Selma Hepp, Morgan's Seydl, Powell, Seydl Organizations: Morgan Private Bank, Housing, National Association of Realtors, of Labor Statistics, Capital Economics, Finance, Federal, CoreLogic, BLS, Olivia Cross North, Capital, CPI Locations: North America, U.S, Olivia Cross North America
Homebuyers are expressing a desire for smaller homes, whether as a compromise given high prices or because they simply want a smaller space, experts say. The typical buyer today wants a 2,067-square-foot home, according to the NAHB's 2024 What Home Buyers Really Want study. "They may not need 2,000 square feet or even want that for themselves," she said. About 28% of polled buyers recently purchased a home between the sizes of 1,501 to 2,000 square feet; while 26%, purchased a home between 2,001 to 2,500 square feet, according to the NAR's 2024 Home Buyers and Sellers Generational Trends Report. How zoning influences home sizesAbout 38% of builders say they built smaller homes in 2023 and 26% plan to build even smaller homes this year, according to NAHB.
Persons: Robert Dietz, Jessica Lautz, Dietz, NAHB Organizations: NAHB, National Association of Realtors Locations: Thana, U.S
In some ways, they're actually faring better than their older millennial peers, and their struggles point to larger cracks in America's social support systems. Younger millennials are getting creative about becoming homeowners, explained Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors. Because younger millennial women are focused on their careers, they're continuing the overall millennial trend of delaying family formation. AdvertisementAnd some of younger millennials' accumulated wealth has faded thanks to inflation, Ricketts said. He pointed out that younger millennials who invest their wealth well are more likely to consume and drive economic growth.
Persons: I've, , Diana Elliott, somethings, Gabby Davis, Davis, Gen Z, Cuspers, they've, Elliott, they'll, millennials, Rollin, Zers, Louis Fed, didn't, Louis, Lowell Ricketts, Ricketts, aren't millennials, who've, Younger millennials, Jessica Lautz, They're, Lautz, they're Organizations: Service, Pew, Population Reference, Louis Fed, Fed, National Association of Realtors, NAR, Young Locations: U.S
Leopatrizi | E+ | Getty ImagesMore built-for-rent single-family homes are being constructed in the U.S., according to the National Association of Home Builders, and experts say this is in part due to the housing affordability crisis. Construction began on about 18,000 single-family, built-for-rent homes in the first quarter of 2024, a 20% jump compared with the first quarter of 2023, according to NAHB, which analyzed data from the U.S. Census Bureau's Quarterly Starts and Completions by Purpose and Design. Single-family built-for-rent starts grew to 90,000 units in 2023, up from 81,000 units in 2022, the National Association of Realtors reported. The growing share of built-for-rent single-family homes is a response to demand from "people who can't afford today's very expensive, out-of-reach housing market," Lautz said. Homeowners are also responsible for shouldering "hidden costs" that aren't figured into a mortgage payment, such as maintenance, repairs, taxes and insurance.
Persons: Robert Dietz, Molly Boesel, Jessica Lautz, Lautz, NAHB's Dietz, Boesel Organizations: National Association of Home Builders, Census, Finance, JPMorgan, Trump, National Association of Realtors, Survey, U.S . Census, NAR, Mortgage, Association Locations: U.S
"Homebuyers have to make a compromise along the way, and often it's the age or the condition of the home," she said. The survey found that the median age of owner-occupied homes in the U.S. is about 40 years old. A mistake, however, is spending your entire reserve of savings for the down payment and ending up "house poor," Ostrowski said. In 2023, 46% of homeowners used cash from savings to cover home improvement projects, according to Angi.com. On average, there are three offers for every home that's listed for sale, Lautz said.
Persons: Jessica Lautz, Lautz, Ostrowski, you've, They're, who's Organizations: National Association of Realtors, Survey, U.S . Census Locations: U.S
While the market is seeing more listings, the boost in supply is not enough to attract buyers, according to Doug Duncan, senior vice president and chief economist at Fannie Mae. "Mortgage rates are down a bit from May highs, but that hasn't spurred a surge of competition among buyers in the housing market," Divounguy said. Many experts believe the Federal Reserve will likely hold interest rates in the upcoming board meeting on June 12. However, the National Association of Realtors forecast a potential interest rate cut by the fall of this year, according to Jessica Lautz, the NAR's deputy chief economist. 'It's hard to foresee prices really cooling'While the housing market has slowed in terms of the number of transactions, prices haven't soften despite broader expectations, Ostrowski explained.
Persons: Orphe Divounguy, Realtor.com, Kelman, Doug Duncan, Fannie Mae, Duncan, Freddie Mac, hasn't, Divounguy, Jessica Lautz, Ostrowski Organizations: Realtor.com, CNBC, Federal Reserve, Reserve, National Association of Realtors Locations: U.S
The Black homeownership rate saw a modest annual uptick to 44.1% in 2022 from 44% in 2021, but remains significantly behind the White homeownership rate of 72%, the report found. A stubborn racial homeownership gapEven with some improvement in the Black homeownership rate, the change has done little to close the yawning gap between Black and White homeownership. Over the past decade, the gap between the two groups’ homeownership rates has worsened, expanding from 27 points to 28 points. Other states with high Black homeownership rates include South Carolina and Delaware, each at 55%. Plus, the median household income for Black Americans was $47,800 in 2022, while the median income for White Americans was $75,700.
Persons: Sharan White, Jenkins, , , ” White, Black, homeownership, Jessica Lautz, Black homebuyers, ” Lautz Organizations: DC CNN, National Association of Realtors, American, Survey, Census Bureau, NAR, Joint Center for Housing Studies of Harvard University, Black, White Locations: Washington, Jamaica, Queens, New York City, Virginia, Brooklyn, Queens , New York, Wyoming, North Dakota, Mississippi, Black, South Carolina, Delaware
Read previewHigh mortgage rates, lofty prices, and low inventory kept the US housing largely frozen in 2023, and home sales slumped to their lowest mark since 1995. Current owners have been reluctant to move off lower mortgage rates secured in prior years, stifling both buying and selling activity. AdvertisementAnd it's worth noting that even as mortgage rates in both years hovered around 7%, affordability has still worsened by a significant margin. NAR deputy chief economist Jessica Lautz highlighted in a note Monday that incomes have less power today compared to decades ago, as reflected in the real estate group's Housing Affordability Index. National Association of Realtors"All these factors have changed dramatically with limited housing inventory and the continual rise in home prices," she continued.
Persons: , it's, hasn't, Jessica Lautz, Lautz, Zillow, Redfin Organizations: Service, Business, National Association of Realtors, NAR, National Association of Home Builders
Buffalo, New York, made the top of the list, as the area is slated to see increased job growth compared with the number of approved construction permits for new homes. The list is based on an analysis of home value appreciation, how long it takes to sell a home and job growth relative to housing supply. What a 'hot' market means for buyers"Market heat" refers to the level of competition among buyers; when you have more buyers than sellers, you have a hot market, Divounguy said. "They're looking into warmer areas, favorable tax conditions and better housing affordability." Where the housing market is cooling
Persons: Grace Cary, Orphe Divounguy, Divounguy, Jessica Lautz Organizations: Finance, National Association of Realtors Locations: South, Northeast, Midwest, Buffalo , New York, Florida
After all their economic misfortune, they'll still face a turbulent housing market and potentially tens of thousands of dollars' worth of necessary updates to boomers' aging houses. In his 2022 paper, "Who will buy the baby boomers' homes when they leave them? ", Engelhardt argued that mass aging would send ripples through the housing market but fail to push down prices significantly. After that point, demand for home purchases will once again outpace supply as millennials buy more homes and younger generations, like Gen Z and Gen Alpha, file in behind them. The timing of boomers' exit will mostly benefit younger generations, like Gen Z and Gen Alpha, who should find themselves on steadier footing than their predecessors.
Persons: Xers, they've, Zers, they'll, Odeta Kushi, Kushi, Gary Engelhardt, Engelhardt, Issi Romem, Meredith Whitney, Boomers, Gen Zers —, Gen, who've, millennials, boomers, Jessica Lautz, Nicole Bachaud, They've, Redfin, Alpha, they're, Lautz, savvier, Zoomers, James Rodriguez Organizations: millennials, Syracuse University, Boomers, Federal Reserve, Alpha, National Association of Realtors Locations: granny, New York, Los Angeles, Chicago, Dallas
About 10,000 baby boomers are expected to turn age 65 every day until 2030. An estimated 70% of those individuals will need long-term care services at some point, according to Genworth Financial. 'Forever grateful' for communitySylvia Bradshaw, an 84-year-old Laguna Beach resident who moved to the city in 1983, describes it as "paradise." "Anything that I've needed, I've gotten help," Bradshaw said. That has included help sorting through insurance choices, legal advice, transportation assistance and classes and social events, said John Bradshaw, Sylvia's son.
Persons: Laguna Beach , California Luciano Lejtman, Jessica Lautz, Lautz, Sylvia Bradshaw, Bradshaw, it's, Redman, I've, John Bradshaw, Sylvia's, John, Carolyn McClanahan, McClanahan, Tom West Organizations: Getty, National Association of Realtors, Laguna Beach, Planning Partners, Signature Estate, Investment Advisors Locations: Laguna Beach , California, Laguna, Ireland, Laguna Beach, Jacksonville , Florida, Tysons Corner , Virginia
The typical first-time home buyer made a down payment of 8% and relied on their savings to do so. Why has the typical down payment for first-time buyers reached an over two-decade high when the housing market is so expensive? In part, it's because wealthier first-time buyers — who can more easily afford a higher down payment — have been particularly active in the housing market. In 2023, the typical first-time homebuyer had a household income of $96,000, up from $71,000 in 2022. Last year, the share of first-time homebuyers reached 26% , the lowest level since the survey began in 1981.
Persons: , homebuyer, Jessica Lautz, it's, homebuyers Organizations: Service, National Association of, NAR
Nearly one-fourth of that was built through real estate equity. With less pressure from interest rates, they can take advantage of the current real estate market, too. They're also in the perfect position to help themselves by taking advantage of the current real estate market. However, boomers can make stronger bids on homes for sale because of their savings and real estate equity. AdvertisementMeanwhile, more than one-third of house purchases in September were all-cash, according to the real estate broker RedFin.
Persons: , They're, Jessica Lautz, RedFin, Jeremy Grantham, Grantham, David Rosenberg, Rosenberg, Merrill Lynch Organizations: Service, National Association of Realtors, NAR, Brigade, Census Bureau, Federal, Rosenberg Research, North, Federal Reserve Locations: North American
“First-time buyers tiptoed back into the market this year with less competition and fewer multiple-offer scenarios,” said Lautz. The age of the typical repeat buyer also dropped slightly to 58 from an all-time high of 59 last year. In comparison, the typical downpayment for repeat buyers was 19%, which is the highest share since 2005, when the typical downpayment was 21%. First-time buyers increased their reliance on financial assets this year, which grew to 24% from 20% last year. Of recent homebuyers, 7% were Latino, 7% were Black, 6% were Asian or Pacific Islander and 6% identified as some other race.
Persons: , Jessica Lautz, today’s, homebuyers, downpayment, Homebuyers, Organizations: DC CNN, National Association of Realtors, Census Locations: Washington, United, United States
And as secondary home activity dwindles, some smaller housing-related businesses in leisure hot spots say they are feeling the pinch as well. “Services for existing rentals has grown, but services for larger ticket remodeling work on new vacation rentals has stopped," said Tim Allen, owner of Kopa Home Services, based in Flagstaff, Arizona. Allen has had to decrease unit prices in his separate vacation rental business, Local Vacation Team, to keep occupancy figures above market. For Flagstaff, that figure is 14%, according to data from AirDNA, a short-term rental data provider. "With the acceleration of the creation of vacation rentals during the pandemic, now if visitors are at 1,000, there are 3,000 rentals available,” he said.
Persons: Kevin Lamarque, , Chuck Tuttle, they’re, ” Tuttle, Tuttle, Tim Allen, Jessica Lautz, Allen, , Amina Niasse, Daniel Burns, Bill Berkrot Organizations: REUTERS, National Association of Realtors, William, Hilton, Lake Havasu, Federal Reserve, Mortgage Bankers Association, realtors, “ Services, Kopa Home Services, NAR, Thomson Locations: Island , South Carolina, U.S, Lake Havasu City , Arizona, William Raveis, Cape Cod, Massachusetts, Lake, Lake Havasu City, Flagstaff , Arizona, Flagstaff, AirDNA
"You see all these high-level headline numbers, and those numbers don't jibe with your economic reality," said Elizabeth Crofoot, senior economist at labor analytics firm Lightcast. Higher prices have been one problem. Are the jobs numbers really that good? Beyond the housing costs, there's some evidence that the jobs numbers may not be all they're cracked up to be, either. After all, more than a quarter of the job creation for September came from lower-wage occupations in the leisure and hospitality industry.
Persons: Frederic J, Brown, Elizabeth Crofoot, nonfarm, Joe Biden's, Crofoot, millennials, Jessica Lautz Organizations: Shell, Afp, Getty, Labor Department, Reuters, Consumer, University of Michigan, Consumers, National Association of Realtors, NAR, Federal Reserve Locations: Alhambra , California, U.S
Girls and young women want to be homeowners by the time they're 30 — a higher priority even than getting married or earning a lot of money. About half, 52%, of young women ages 7 to 21 want a house by 30, the most of any goal, according to Girlguiding's Girls' Attitude Survey 2023 . To compare, 48% want to be married by age 30, and 39% said it's a goal to earn a lot of money. The organization polled 2,614 girls and young women in the U.K. between the ages of 7 and 21 earlier this year. Lenders look at your debt-to-income ratio to figure out how much mortgage debt you can take on.
Persons: Fannie Mae, it's, Melissa Cohn, William Raveis, Kamila Elliott, Cohn, Jessica Lautz, Elliott, Roth, Lazetta Rainey Braxton, Braxton Organizations: Fannie, William Raveis Mortgage, Federal Reserve, Wealth Partners, National Association of Realtors, CNBC, Partners, IRA, CNBC FA Council, CNBC FA Locations: New York, Atlanta
But you probably don't need as much money as you think. In the following decades, many government-backed mortgages mandated a 20% down payment. The typical house in the U.S. has a median price of around $400,000. Applying the 20% rule would mean you'd need $80,000. Some states, cities and other groups have programs that award grants to homebuyers that bolster their down payment or help cover closing costs.
Persons: SurveyMonkey, Jessica Lautz, Lautz, Freddie Mac, Daniel Brennan Organizations: Istock, CNBC, National Association of Realtors, U.S . Department of Agriculture, Federal Housing Administration, Department of Veterans Affairs, Bank Locations: U.S, Arizona, Maine
'Housing affordability really is a struggle'Many young, unmarried couples live together, often for financial reasons. About 3 in 5 unmarried couples in the U.S. live with their partners, according to a report by the Thriving Center of Psychology. But unmarried couples should carefully approach making a commitment of this scale. To protect their investments in the property, unmarried couples ought to carefully consider how it is titled. Four factors unmarried homebuyers should considerHere are four things that certified financial planner Cathy Curtis, founder and CEO of Curtis Financial Planning, in Oakland, California, says unmarried couples should think about before buying property together: 1.
Persons: Gary Burchell, homebuyers, Jessica Lautz, Lautz, Melissa Cohn, William Raveis, they're, it's, Cohn, Cathy Curtis, millennials, Curtis, Roth Organizations: Getty, National Association of Realtors, D.C, NAR, William Raveis Mortgage, Curtis Financial, CNBC Financial Locations: Washington, U.S, New York, Oakland , California
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