MReport April 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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40 | 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 ORIGINATION Consumer Confidence Grows in Home- Shopping Tech Tools Tech-savvy millennials searching for homes are using digital tools at an increasing pace, but they are also demanding more. T he ease-of-use of digital technology continues to bring convenience to many of our everyday tasks. From grocery shopping to ordering just about anything un- der the sun, an increasing number of Americans are growing more comfortable relying on technology. Home shopping has become a task being conducted by an increasing number online as well, as a new Zillow survey has found that a majority of millennials (59%) said they would be at least somewhat confident making an offer on a home they toured vir- tually, while 39% would be com- fortable buying a home online. The analysis by Zillow also found that tech-savvy millennials are not only driving the home shopping trend, but overwhelm- ingly want more digital tools available during the home shop- ping process. "It's clear that strong de- mand from the next generation of buyers will keep real estate technology in place long after the pandemic is over," Zillow Senior Vice President of Product Matt Daimler said. "Digital tools rapidly adopted during the pandemic not only make home shopping safer, they make it faster and easier." And while homes were the fo- cus of the study, a large majority surveyed—at least 70%—said they would be comfortable buying fur- niture, appliances, televisions, and jewelry online, and 45% said they would be comfortable purchasing a car online. Time-saving digital tools are allowing millennials, who are often first-time buyers, to compete in a lightning-fast housing market. Homes nationwide are going under contract in a median of 18 days, 28 days faster than a year ago. Homebuyers said they would like to use a host of digital tools while home shopping and touring, including 79% of respondents who said viewing a digital floor plan is a tool they'd like to use; 79% who would view a virtual 3D tour; 75% who would like to receive email notifications from a saved search on a real estate website or app; 68% watching a video tour with an agent; and 68% unlocking a home with their phone and tour- ing it on their own time. While millennials are currently the largest adopters of this real estate technology, Gen Z is close behind, with 36% of millennials stating that they would be com- fortable buying a home online, compared to just 7% of baby boomers and 19% of Gen X. Economist: This is the Strongest Seller's Market Since 2006 How long will prices continue to soar, and when will demand settle down? Researchers examine the latest data. N ationally, home sales prices in February rose more than they have during any month since July 2013. In fact, according to the Redfin report, the national median home- sale price rose 14.4% year over year to $336,200 in February. Closed home sales were up 5% from a year earlier and pending sales were up 21%. New listings fell 16%—the second-largest decline on record since Redfin's data began in 2012, only passed by the drop in April 2020. "This is the strongest seller's mar- ket since at least 2006," Redfin Chief Economist Daryl Fairweather said. "Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to. It seems like the only move-up buyers who are confident enough to list their homes are those who are relocating to a more afford- able area where they'll have an edge on the local competition." "Even though the market feels remi- niscent of 2006, we aren't in a bubble," Fairweather continued. "Yes, some buyers are overpaying for homes, particularly those who are moving to affordable destinations and paying well over asking prices to win homes in bidding wars. But these buyers are of- ten covering any shortfall in the bank's appraisal amount and locking in low monthly mortgage payments that they can easily afford. As mortgage rates rise, I expect demand to settle down and be better balanced by more new listings as high home prices lure more sellers to the market." Redfin analyst Tim Ellis echoed that the shortage of homes for sale is "making homebuyer competition more intense than we've ever seen." He noted that 36% of homes sold last month went for more than their asking price, the largest share on record. This extreme imbalance between supply and demand is the primary factor rapidly driving up home prices.

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