Where Homebuyers Are Heading By Generation [INFOGRAPHIC]

Where Homebuyers Are Heading By Generation [INFOGRAPHIC] | Simplifying The Market

Where Homebuyers Are Heading By Generation [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Whether capitalizing on job opportunities, affordability, or warm-weather places to retire, Americans are making moves to these top cities to take advantage of the strength in the current housing market.
  • A strong economy and lower mortgage rates have made it easier for many would-be buyers to get into the market. According to realtor.com, it just depends on which market.
  • To find the top market in our area, let’s get together.

Housing Inventory Vanishing: What Is the Impact on You?

Housing Inventory Vanishing: What Is the Impact on You? | Simplifying The Market

The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:Housing Inventory Vanishing: What Is the Impact on You? | Simplifying The MarketGeorge Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.

If You’re a Seller…

Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.

Buying a Home Early Can Significantly Increase Future Wealth

Buying a Home Early Can Significantly Increase Future Wealth | Simplifying The Market

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.

The good news is, our younger generations are strong believers in homeownership.

According to a Freddie Mac survey,

“The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials.

Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).”

Buying a Home Early Can Significantly Increase Future Wealth | Simplifying The MarketIf these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.

Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.Buying a Home Early Can Significantly Increase Future Wealth | Simplifying The MarketAlthough the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.”

Bottom Line

As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from here.

Millennials Are on the Move as First-Time Homebuyers [INFOGRAPHIC]

Is Your First Home Now Within Your Grasp? [INFOGRAPHIC] | Simplifying the Market

Is Your First Home Now Within Your Grasp? [INFOGRAPHIC] | Simplifying the Market

Some Highlights:

  • According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time homebuyers is 32.
  • With more millennials entering a homebuying phase of life, they are driving a large portion of the buyer appetite in the market, keeping buyer activity strong.
  • More and more “old millennials” (ages 25-36) are realizing that homeownership is now within their grasp, and they’re actively dominating the first-time homebuyer market!

Millennials: Here’s Why the Process is Well Worth It.

Millennials: Here’s Why the Process is Well Worth It. | Simplifying The Market

Millennials have waited longer than any other generation to become homeowners, but the wait for this cohort is just about over.

According to National Mortgage News,

 “Millennials, those young adults now aged 23 to 38, are now entering their peak household formation and homebuying years.

If you’re a Millennial, you’re already well aware that you’re among a generation of those who favor fast-paced, real-time answers – and results. When you’re ready to make a decision, it’s go-time, and you probably want the latest technology at your fingertips to make it happen.

National Mortgage News agrees, stating,

“Millennials are different than previous generations—not only in their delayed homebuying but also in how they approach interactions with financial institutions, including mortgage lenders. Taking a picture of a check on their phone and depositing it without visiting a branch is not novel, it’s the way Millennials learned to do banking. They expect real-time access to account and transaction data and are frustrated when it’s not available.”

Here’s the catch – the overall speed of the homebuying process can take some time, and it might feel like it is slowing you down. When you’re ready to buy, you can make an offer and go under contract quickly, but the rest of the process might take a little longer. The same article explains why:

“When Millennials apply for a loan, the mortgage lender must qualify the borrower and determine who owns the property, how much the property is worth, and the property’s risk profile. Traditionally, this has been one of the most time-consuming and fragmented parts of the mortgage process…There are many moving pieces, each data point being sourced from a different provider, which can ultimately lead to a lengthy or delayed process.

 What has historically been accepted as the process norm does not align with the expectations of the most prominent generation in the home buying market today. Millennials have come to expect rapid, digital workflows in their daily purchase decisions, and in their mind, the home buying process shouldn’t be any different.”

So, where do you go from here?

 If you’re pre-approved for a mortgage, that will help speed things up. But the steps it takes and the time to finalize a loan with most traditional lenders may feel like an eternity to you and your generational peers. Don’t worry, though – it’s well worth the wait when you finally get the keys to your new castle!

The financial benefits of homeownership, like increasing your net worth by building equity, and the non-financial benefits, like being able to customize and improve your space, will ultimately set you on the course to happiness, success, overall satisfaction, and much, much more.

Bottom Line

If you’re feeling like it’s go-time, let’s get together and get the process moving to determine if homeownership is your next best step.

5 Reasons to Consider Living in a Multigenerational Home

5 Reasons to Consider Living in a Multigenerational Home | Simplifying The Market

Did you know that 1 in 6 Americans currently live in a multigenerational household?

According to Generations United, the number of multigenerational households rose from 42.4 million in 2000 to 64 million in 2016. The 2018 Profile of Home Buyers and Sellers from the National Association of Realtors shows that 12% of all buyers have a multigenerational household.

Why Are Many Americans Choosing to Live in a Multigenerational Household?

The benefits to multigenerational living are significant. According to Toll Brothers,

“In recent years, there’s been a steady rise in the number of multigenerational homes in America. Homeowners and their families are discovering new ways to get the most out of home with choices that fit the many facets of their lives.”

The piece continues to explain the top 5 benefits of multigenerational living. Here is the list, and a small excerpt from their article:

1. Shared Expenses

“…Maintaining two households is undeniably costlier and more rigorous than sharing the responsibilities of one. By bringing family members and resources together under one roof, families can collectively address their expenses and allocate finances accordingly.”

2. Shared Responsibilities

“Distributing chores and age-appropriate responsibilities amongst family members is a tremendous way of ensuring that everyone does their part. For younger, more able-bodied members, physical work such as mowing the lawn or moving furniture is a nice trade-off so that the older generation can focus on less physically demanding tasks.”

3. Strengthened Family Bond

“While most families come together on special occasions, multigenerational families have the luxury of seeing each other every day. By living under one roof, these families develop a high level of attachment and closeness.”

4. Ensured Family Safety

“With multiple generations under one roof, a home is rarely ever left unoccupied for long, and living with other family members increases the chances that someone is present to assist elderly family members should they have an accident.”

5. Privacy

“One of the primary trepidations families face when shifting their lifestyle is the fear of losing privacy. With so many heads under one roof, it can feel like there’s no place to turn for solitude. Yet, these floor plans are designed to ensure that every family member can have quiet time… [and] allow for complete separation between the generations within the household.”

Bottom Line

The trend of multigenerational living is growing, and the benefits to families who choose this option are significant. If you’re considering a multigenerational home, let’s get together to discuss the options available in our area.