MReport August 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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50 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA THE LATEST Marriage Not on Their Mind Millennials are prioritizing homeownership over wedding vows. Here's why. M any millennials are focusing on homeownership before marriage, according to the results of a survey from SunTrust. The survey reveals that, of the more than 2,000 U.S. adults, nearly half of millennials (aged 22-38) who have been married say they and/or their spouse owned a home before marriage (48%), compared to only 35% of baby boomers (ages 55-73). "People are choosing from many different paths and reaching common life milestones at a wider age span than before, changing when they decide to purchase a home," said Sherry Graziano, Mortgage Transformation Officer at SunTrust. The survey also found that an increasing number of couples are entering marriage where both in- dividuals own a home. According to the survey, 25% of unmarried women and 21% of unmarried men said, if faced with this deci- sion, they would prefer to sell both places and buy a new one after getting married. Additionally, the survey found that millennials, more than older generations, have convenience in mind when buying a home. Twenty-nine percent of millennial homeowners cited proximity to work as a determining factor when buying a home, compared to 18% of Gen X and 18% of baby boomers. Overall, first-time buyers such as millennials continue to reshape the mortgage market. According to the latest First-Time Homebuyer Market Report from Genworth Mortgage Insurance, first-time buyers make up 38% of single-family homebuyers and 57% of new purchase borrowers. Young millennials are still reaching homebuying age. Genworth notes that the average homeownership rate increases from 35% to 60% as the head of household age goes from under-35 to between 35 and 44. However, while this propensity will contin- ue to rise later in life, the increase will be less dramatic. Who's the Most Frugal Homebuyer of Them All? Finding the right home is proving to be more difficult than it seems, according to a new survey. A survey by of 1,800 consumers who recently bought a home revealed that this was one of the reasons why many recent homebuyers were also surpassing their budget. Nearly half (49%) of the respondents said that finding the right home was a challenge for them. As far as generations were con- cerned, millennials found it least difficult to find the right home, while 52% of Gen-Xers and 56% of baby boomers found it more challenging, the survey found. However, millennials found it more difficult to save for a down payment on the home compared to the older generations. In fact, 21% of millennials said that this was the most difficult aspect of buying a home compared with 15% Gen- Xers and 6% baby boomers. "It's not surprising that recent homebuyers find it challenging to find the right home: many markets are still seller's markets, and buyers often need to de- cide very quickly whether they should outbid the competition," said Dario Cardile, VP, Growth at "When possible, homebuyers should work with brokerages that can capture their preferences effectively, and help them find their best match homes quickly. The key is providing buyers with the right information, a customized approach and the guidance of smart agents so they can find their dream home at the right price." When it came to budgets, the survey revealed that more than one-third (38%) of respondents sur- passed their budget, compared to 32% surveyed in 2018. These recent homebuyers exceeded their budget by $20,000 on average, a significant increase from 2018's $16,510. However, it found that millen- nials tended to be more frugal in their spending than the older generations. In fact, 39% of the Gen- Xers surveyed went over budget by $35,000, while 27% of baby boom- ers went over budget by $25,000. Comparatively, while more millen- nials went over budget, they spent significantly lesser than last year. While 46% of millennials went over budget, by $12,000 on aver- age, the amount was less than the $24,545 recorded for 40% millenni- als in 2018. Looking at the 2019 homebuy- ing season, the survey found that affordability was the biggest bar- rier for homebuyers. When asked what they foresee as the biggest issues facing homebuyers this year, 41% of respondents stated affordability followed by rising interest rates (25%), buyer competi- tion (12%), finding the right home (11%), and housing supply (10%).

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