MReport March 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 53 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 Buyers and Sellers Get Smart About Homes When it comes to buying or selling a home, VR and smart technology are here to stay. V irtual reality (VR) is poised to become the next big revolution in real estate, with 77 percent of a recent survey indicating they would like to take a VR house tour before actually visiting a prospective home, according to the Coldwell Banker Real Estate Smart Home Marketplace Survey, published by real estate brokerage firm Coldwell Banker. In fact, the desire for VR tours is almost on par with traditional video tours, with 84 percent agreeing they would like to be able to see video footage of prospective homes before visiting. Some 68 percent of homebuyers said they would use the virtual tour to see how their furniture would fit into a prospective home. And that's not all. Even when it came to choosing a real estate sales associate, 62 percent said they would prefer someone who offered virtual house tour capabilities that could be available on computer and smartphone as a service for their clients. If buyers are keen on virtual tours, sellers would like to get suggestions from their real estate agents on staging their homes with smart home products and technology to help them increase the sale's value. Around 42 percent of sellers agreed they would look to their real estate agent to provide them with information about how smart technology or products could impact the sale of their homes, while 32 percent agreed they would look to their real estate agent to provide them with information about smart home technology and how it would add value for buyers. Speaking of technology, smart thermostats were the most wanted piece of tech for buyers, with 77 percent saying they would want smart thermostats installed in a home, followed by 75 percent saying they would like smart fire detectors installed. Smart carbon monoxide detectors, smart cameras, smart locks and smart lighting systems were some other gadgets that buyers would like installed in a prospective home. Why 50% of U.S. Households Won't Have Enough Retirement Income Rising FRA, reverse mortgage reform, and declining interest rates can mar comfortable retirement for the current working-age population. R etirement for Baby Boomers and Gen Xers could be more difficult than for current retirees, according to the National Retire - ment Risk Index (NRRI) com- piled by the Center of Retirement Research at Boston College. The NRRI measures the percentage of working-age households that are at risk of being unable to main - tain their pre-retirement standard of living in retirement and tries to address the challenges of ensuring retirement security of an aging population. The latest report that analyzes retirement risks data from 2016 indicates that half of today's households won't have enough retirement income to maintain their pre-retirement lifestyle even if they work to the age of 65 and annuitize their financial assets, including receipts from a reverse mortgage on their homes. According to the report, rising home prices and stock market gains led the NRRI to improve modestly from 52 percent in 2013 to 50 percent of working- age households in 2016. It said that during this time period, a substantial percentage of households in all income groups owned a home and enjoyed the benefits of rising prices. Citing the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, the report said that between 2013 and 2016, U.S. home prices increased about 14 percent in real terms. The NRRI stresses on homeownership and home prices due to their significant impact when home equity is accessed in retirement by taking out a reverse mortgage that can turn into an income stream through annuitization. On the other hand, it said that Social Security's rising Full Retirement Age (FRA), reverse mortgage reform and declining interest rates served as a head - wind against greater progress and reduced risk on the NRRI. The report indicated that by 2016 almost all workers had an FRA of 67, leading to a larger impact on low-income households that depend almost entirely on Social Security for retirement income. Lower interest rates in 2016, compared to 2013 meant that households earned less income from annuitizing their assets, while the reverse mortgage reform announced by the government in 2017 meant increasing up-front premiums and placing tighter limits on home loans. When viewed by age and income, all groups of households experienced an improvement, except middle-age and middle- income households due to more non-mortgage borrowing, par - ticularly for education expenses. For households ages 45-50, their average non-mortgage debt-to- income ratio almost doubled from 14 percent in 2013 to 27 percent in 2016. Increased borrowing also was an issue for the middle- income group, aggravated by a downturn in reported defined benefit coverage.

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