MReport March 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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52 | 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 Dream Vs. Reality Most millennial first-time homebuyers say they can't afford to buy a home this year, but if they could, they would opt for a "forever home." A majority of millennials who plan to buy their first home in the next 36 months say they can't afford the type of home they would like to live in, according to data provided to MReport by Val - ueInsured. The company surveyed 1,019 adults who were planning to buy their first home in the next 36 months, but did not currently own a home. The report said that 76 percent of the respondents lived in a home where they paid rent and 24 percent lived in a home where they did not pay rent. Of the millennials surveyed, 54 percent plan to buy a "forever home" or a home where they can live for a while and 40 percent would like to buy a starter home they can upgrade from. As far as budgets are concerned, 74 percent said they plan to cap their next home purchase budget at $250,000. While 38 percent said they would like to live in their new home with their spouse or partner with children, 16 percent planned to share their home purchase with friends, roommates or rental tenants. However, only 36 percent were confident they could afford the down payment now to buy the kind of home they would like to live in. The report indicated that a majority of millennials cannot af - ford to buy a home now, and even among those who could afford to buy immediately, only 46 percent thought now is a good time to buy. Around 55 percent of respondents said they were concerned with timing the market and wanted to make sure they were not buying at overvalued rates. Moving jobs or losing a job was a major concern for these first-time buyers, with 48 percent being concerned about a job move or a job loss after they committed to buying a home. The survey also highlighted the top three things that make up the ideal home: a nicer home that needs few upgrades or little renovation, ; a bigger home with more room or space; and access to better schools. Homeowners Might Not be Ready to Sell Just Yet Tight inventory could be the biggest market driver in 2018. H ome prices rose 6.8 percent in Decem- ber 2017 as inventory declined 14.5 percent, according to a report on Decem- ber home prices and sales released by brokerage firm Redfin. For the full year of 2017, home sales increased 1.7 percent over 2016, while prices rose 7 percent with the median sales price being $284,500, the report said. In 2018, tight inventory is expected to be the biggest market driver. "Like last year, low inven - tory will be the biggest driver of the 2018 real estate market. We anticipate a continuation of the same trends we've been seeing for the past few years. Price growth will remain strong as many home - owners will remain deterred from selling due to the low mortgage rates they've locked in and the high price of their would-be move- up home," said Nela Richardson, Chief Economist at Redfin. The report indicated that home sales ended a year of fluctuating sales growth with a decrease of 2.8 percent in December. The num - ber of homes for sale declined 14.5 percent compared to the prior year, marking 27 consecutive months of inventory decline. The typical home that sold in December found a buyer after 49 days on the market, compared to 54 days in 2016. The number of newly listed homes for sale decreased 3 percent in December, the report said. Additionally, with just 2.6 months of supply in December, the mar - ket was far below the six months of supply that represent balance between buyers and sellers. San Jose, California, lead the cities that faced the most acute shortage of inventory with only 0.5 months of supply in December. Home prices in this city in December climbed 32 percent compared to last year as supply sunk to an all-time low. "Like last year, low inventory will be the biggest driver of the 2018 real estate market. —Nela Richardson, Chief Economist, Redfin

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