Millennials, Gen Z Dominate Mortgage Market

More mortgages are being taken out by Millennial and Gen Z buyers than their older counterparts, a trend boosted by Zoomers’ thirst for homeownership. A new analysis from Redfin found that two in five — just shy of 40% — of new mortgages issued in 2023 went to homebuyers under 35, while an additional 26.5% went to buyers in the 35-44 age range. Middle-aged buyers between 45 and 54 grabbed just 16.1% of new mortgages, followed by 55-64-year-olds (10.8%) and 65-74-year-olds (5.4%). Younger buyers are dominating the mortgage market due to two major factors: prime homebuying years and the prevalence of cash among older buyers. Younger Americans are always primed to take these top spots because people tend to take…

Southern States Double Down On Affordable Inventory

The South has lost its sparkle for American movers in the post-pandemic world, but that could change as the region doubles down on producing affordable inventory. More than half of all available inventory in April 2024 was concentrated in Southern states, according to an analysis by Realtor.com.  They also boasted the most new listings at 19.7%. In contrast, inventory rose by just 7.5% in the West and 2.9% in the Northeast. The Midwest came in a close second at 18.4%. “Sellers continued to list homes at a greater rate than last year. This has led to a promising increase in more affordable homes for sale, especially in the South,” Realtor.com Chief Economist Danielle Hale said. Florida metros saw the most…

Homebuying Costs Hit Another Record High

The cost of buying a home hit another record high as rising rates intersected with home price growth. The median U.S. home sale price increased 5% YOY to $380,250 during the four weeks ending April 14. This is just a few grand below June 2022’s all-time high. At the same time, mortgage rates have jumped up over 7% in recent weeks as inflation data forced the Central Bank to walk back its talk of rate cuts. Some analysts who previously predicted three cuts from the Fed in 2024 now say there may be none at all. “I think we’re still expecting a couple but clearly we continue to kick the can down the road on rate cuts, and it wouldn’t…

Nearly 40% Of Renters Believe They’ll Never Own A Home

The number of renters who believe they’ll never afford a home has skyrocketed in the last year as rates rose and stock shortages lifted home prices out of their late-2023 spiral. A recent Redfin survey found that close to 38% of renters believe they are unlikely to become homeowners, up from 27% at the same time last year. Lack of affordability is the most cited reason for their pessimism, with almost half of respondents saying houses are simply too expensive. Trouble saving for down payments (35%), inability to afford mortgage payments (33%) and high mortgage rates (32%) accounted for the rest. Just 14% said they don’t want to own a home. The combination of price appreciation and near-7% rates has…

Rates March Toward 7% On Sticky Inflation Data

Mortgage rates are marching towards 7% again as inflationary pressures threaten their stability. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.88%, up from the week prior’s 6.82%. A year ago at this time, the 30-year FRM averaged 6.27%. The 15-year fixed rate increased from 6.06% to 6.16%. A year ago, it averaged 5.54%.  Rates have primarily stuck between 6.5% and sub-7% as they moved up in the first quarter. Freddie Mac Chief Economist Sam Khater noted that rates moved up as inflation stayed sticky and the Central Bank’s monetary policy shifted. “While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different…

Luxury Home Sales Are Hot Again

By CHUCK GREEN Luxury home prices are at an all-time high as a record share of buyers pay cash for homes in the country’s most exclusive areas. According to a recent report by data journalist Dana Anderson at Redfin, the prices of luxury homes rose at twice the pace of non-luxury homes at the end of last year. The typical luxury home sold for $1.17 million in Q4 2023, up 8.8% year-over-year. Like the non-luxury market, low inventory has been pushing prices up, but new listings are increasing as more homeowners jump at the chance to snag rich buyers offering cash for their purchases. “A lot of luxury buyers are coming in with cash, snapping up expensive homes,” Heather Mahmood-Corley,…

Americans Skipping Meals, Vacations To Afford Housing Costs

Americans are making sacrifices ranging from fewer vacations to skipping meals to afford housing costs. Just under 50% of U.S. homeowners and renters say they regularly or greatly struggle to make their housing payments, and many are giving up other things to pay in full, according to a new survey from Redfin. Of the 3,000 American homeowners and renters surveyed, a third of respondents said they are taking fewer or no vacations in order to make their payments, the most common response by far. But others are forced to take more serious action. An equal share of others said they skipped meals, worked extra hours at their job, or sold belongings (approximately 20% for each category.) One of every six…

Buyers Put Down More To Lower Monthly Costs

With home prices soaring out of reach and rates hot, Americans are doing whatever they can to lower their monthly payments, according to a series of new reports from Redfin. The typical monthly housing payment hit a record high of $2,721 in the four weeks ending March 24, up 10% YOY. A combination of prices and rates is keeping homeownership unaffordable for the average family, which earns $30,000 less per year than necessary to comfortably purchase a house.  First-time buyers have it even worse thanks to boiling competition for low-priced homes. To afford a starter home, they need to earn almost twice as much as before the pandemic. With these pressures on Americans’ wallets, buyers are looking for other ways…

Housing Costs Will Affect Voters In November

More than half of homeowners and renters will partly base their choice for President on housing affordability. That’s according to a new survey commissioned by Redfin and conducted by Qualtrics last month.  The survey found that 53.2% of respondents will be informed by housing in November’s presidential election. On top of that, 64.2% of homeowners and renters said the state of housing makes them feel negative about the economy.  “Housing affordability is top of mind for voters because elevated mortgage rates and home prices, along with an acute housing shortage, have pushed the dream of homeownership out of reach for many Americans,” said Redfin Chief Economist Daryl Fairweather.  Analysts say the economy is actually doing well by many metrics, but…

The Racial Homeownership Gap Is Worst For Black Millennials

While the racial homeownership gap exists in every generation, Black Millennials have it worse off than any other age group. That’s according to a new analysis from Redfin, which found that just one-third of Black Millennials own their home (33%), compared to 65% of white Millennials, the largest divide of any generation. By comparison, 52% of Black Gen Xers own their home, compared to 80% of white Gen Xers. Six in ten Black Boomers own their home, while 85% of white Boomers do. White and Black adult Gen Zers own their homes at rates around 30% and 16%, respectively – not as bad as the Millennial divide, but still significant. Black Americans face challenges ranging from the impact of racist…