MReport May 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 Family Comes First The youngest generation of homebuyers prefer homes close to their family and friends. T hey're the most active generation of homebuy- ers in the market today, but unlike their Gen X or baby boomer parents, millen- nials prefer to buy homes that are close to their friends and families rather than a convenient location or proximity to a school accord - ing to the 2018 Home Buyer and Seller Generation Trends report published by the National As- sociation of Realtors. The report, which evaluates the generational differences of recent homebuyers and sellers found that inventory constraints and higher housing costs kept the overall home buying activity of millen - nials subdued during the year, even preventing some millennials from leaving the confines of their parents' homes. Despite these con - straints, millennials are the largest share of home buyers at 36 percent, with 65 percent of these buyers be- ing first-time homebuyers. The report also found that greater purchasing power was needed over the past year to buy a home. It found that over the past year, the typical millennial buyer earned a higher household income than a year ago, but purchased the same-sized home at a more expen - sive price. Millennials also had a higher student debt balance and more millennials found that saving for a down payment was the most difficult aspect of buying a house, the report indicated. While buyers and sellers across all generations continued to con - sult a real estate agent or broker to help them, the report also found that the reasons for buying and selling a home vary across genera - tions. For example, 86 percent of the millennials wanted to buy a home because they thought it was a good investment, while 55 percent of Gen X buyers preferred buying a home in the suburbs. Around 17 percent of the older baby-boomer generation purchased senior-related housing. Like the millennials, the silent generation also preferred living close to family, friends, and relatives with 25 percent saying they had bought a home keeping these considerations in mind. Home Permits Up Nationally Even though the number of home permits was up in 2017, the average across the states still shows construction in many markets. T he number of home permits nationally was up 6 percent in 2017, according to a report by construction industry website ConstructConnect. However, that average belies a wide range of new home activity across the states. While the overall highest concentration of new home starts was in Atlantic coastal states, high bursts of new construction were spread around the country. The District of Columbia was the most active area for new home starts in 2017, with activity there spiking 29 percent. But the second-most- active state was as far away as someone in D.C. could get and still be in America. New home starts in Hawaii were up 20 per - cent last year. New York, Delaware, Arkansas, and Idaho completed the top six states for new construction in 2017. New construction in these states was up an average of 18 percent over 2016. Idaho also saw the larg - est overall population increase of any state last year. Idaho's popula- tion increased by 2.2 percent. Seventeen states, from every region of the country, saw new home starts grow between 4 and 9 percent last year, according to the report. Arizona, Washington, and Utah exactly mirrored the national 6 percent growth rate. Alabama was the only state to finish 2017 flat compared to 2016. "The states with only aver - age or weaker performances of housing starts last year were in the northwest, the southeast and most notably in the middle of the country," the report stated. "The middle northern states are the agricultural heartland. The middle southern states are recovering from an energy-sector downturn." Fifteen states reported nega - tive new home construction start numbers last year; three in double digits. North Dakota showed a 15 percent decrease in new housing starts in 2017, followed closely by Connecticut, which showed a 14 percent drop. Oklahoma reported 11 percent fewer home starts com - pared to 2016. Vermont, New Hampshire, Missouri, and Minnesota inversely mirrored the national growth trend in new starts last year. Each of these states posted a 6 percent de - crease in new home start activity. "The middle northern states are the agricultural heartland. The middle southern states are recovering from an energy-sector downturn." — ConstructConnect report

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