TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1148776
TH E M R EP O RT | 49 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 Nice Day for a White Wedding (and Down Payment) A study on home down payments and wedding costs found some cities where both were viable at the same time. R edfin.com revealed in a new study that Detroit, Pittsburgh, and Cleveland were the most affordable places for couples to get married, and cover their down payment on their first home. The average combined cost of a wedding and a down payment payment in Detroit, Cleveland, and Pittsburgh is less than $65,000, which is substantially lower than the national average of $109,000. Redfin calculated down pay- ment amounts in 25 metros, assuming a 20% down on a medi- an-priced home as of April 2019, and paired it with data on wed- ding costs from WeddingWire. The average cost of a wedding, including an engagement ring, ceremony, reception, and honey- moon in 2018 was $38,700. The most expensive metro to host a wedding and buy a house was San Francisco with costs adding up to $325,000. Los Angeles ($168,000) and New York ($158,000), were close behind. The Golden Gate City's median home price, according to Redfin, was $1.42 million, which would require a 20% down payment of $285,000. A recent study from Trulia found that the west coast was home to five of the seven priciest metros—San Francisco; San Jose, California; Los Angeles; San Diego, California; and Portland, Oregon. Florida metros Miami and Tampa Bay were also included. With a median home value of $590,700 and a median income of $75,110, only 8% of the ZIP codes in San Diego had 100% of homes that could be considered affordable. New York was a close second, with just 9.3% of ZIP codes had homes all could deem affordable. Redfin reports that down pay- ments in coastal metros such as Seattle, Boston, and San Diego were more than $100,000, with San Diego having an average home price of $639,000. Of the 25 metros studied, Detroit had the least expensive median home price of $139,900, which would require a 20% down payment of $27,980. The average price of a wedding in Cleveland was $22,000, with the combined price of a wedding and down payment just $55,980. How Parenthood Impacts Homebuying A study puts the spotlight on the challenges of homebuyers with young children. S ummer is not all about vacations and fun. Zillow reports that parents with children searching for a new home this summer face more challenges, and more than 25% of them go over budget. Zillow found that 25.6% of parents with children under the age of 18 went over budget when buying a new home. In com- parison, 21.2% of parents without children reported to go over budget. The report also found that 31.5% of par- ents with children were initially denied a mortgage, a large gap from 11.5% of parents without children. Zillow states that two-thirds of buyers that have children under the age of 18 made sacrifices on their home search, including sacrificing a shorter commute (34.1%), a larger home (31.2%), and desired finishes (32.7%). "Having kids is a major destabilizer in life—their needs are constantly changing and seemingly impossible to anticipate. Combine all that uncertainty with a massive financial decision that inevitably requires tough tradeoffs among a limited set of options and has to be wrapped up in time to move before school starts and you've got one of the biggest chal- lenges around," said Skylar Olsen, Director of Economic Research at Zillow. "As markets cool, parents will have more time to breathe and reflect on what tradeoffs they're willing to make." Commenting on the impact of mortgage rates on these homebuyers, Olsen said, "With interest rates back down, they'll be more able to lock in an affordable monthly payment that will last through college. The trick is finding the home that still fills the family's needs as toddlers turn into kids, kids into teenagers, and teenagers into the young adults in your basement. Luckily, most buyer parents end up with a home they love." Renters with children also experience troubles, as Zillow reports they fill out 1.9 times as many applications than rent- ers without kids at home, and it takes them a month longer to find a home. Renters with children are more vulnerable financially, with 54.1% saying they couldn't afford a $1,000 unexpected expense.