TheMReport — News and strategies for the evolving mortgage marketplace.
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10 | TH E M R EP O RT MONTH IN REVIEW Crunching Numbers From demographic research to price forecasts, we've compiled coverage of the months' top mortgage industry trends. 1 A recent study set about determining which U.S. cities have the most overleveraged mortgage debtors by comparing the median mortgage balances against the median income and median home value. Of the 2,500 cities surveyed, WalletHub found Willis, Texas at the top of the list. 2 In "2018's Best and Worst States for Millennials," WalletHub calculated research using the dimensions of affordability, education and health, quality of life, economic health, and civic engagement to determine the rank of each state for millennial well being, with Washington, D.C., North Dakota, and Minnesota rising to the top. 3 The Midwest is home to the most affordable housing markets in the United States, according to data from the National Association of Realtors. The Realtors Affordability Distribution Curve and Score examines the affordability of current housing inventory at various income levels and assigns an affordability score to each state and the 100 largest metros. Ohio topped this list, with Montana coming in last. 4 Working from home just got a renovation, based upon research by Zillow. The analysis found that a typical U.S. home appreciated by 7.6 percent last year, this increase in value meaning a gain in home equity of $7.09 for every hour that the average U.S. homeowner was at the office last year, and translated to a little less than the federal minimum wage of $7.25 per hour. 5 In a report released by the U.S. Department of Labor, surveys found that total nonfarm payroll employment increased to 103,000 in March, while the unemployment rate remained unchanged at 4.1 percent, for the sixth consecutive month. According to Danielle Hale, Chief Economist at Realtor.com, "As new workers join the workforce, there's potential for even more demand to be added the housing market which could drive prices even higher. In March, listing prices rose 8 percent year-over- year and are easily on track to surpass last year's highs." 6 Santa Monica, California, has seen the steepest rise in luxury home prices over the past one year, according to a study by Realtor.com. The study looked at luxury markets across the country to determine where the prices for luxury homes were rising the fastest and which were the slowest markets for luxury home appreciation by pulling housing data for over 600 ZIP codes where a median home listing price was above $1 million, and comparing their data in a year-over- year analysis. 7 Utilizing the most current median wage data for each occupation group from the Labor Department's employment report, Trulia determined the share of for-sale homes in each market that are affordable to each worker category. The company defines affordability as a debt-to- income ratio of 31 percent or less, meaning a person's monthly house payment would eat up no more than 31 percent of their paycheck. Among its findings, the report showed that teachers are worse off than last year, first responders can't find affordable homes in California cities, restaurant workers still confront the biggest affordability challenges, and computer programmers are still being priced out of tech hotspots like San Francisco and Seattle. 8 A little more than a quarter of renters across the country had incomes that were higher than new homeowners using a mortgage, according to a study by the Urban Institute. The results also found that housing affordability differed over time, location, and racial and ethnic groups, as well as metro areas that were deemed more affordable had higher homeownership rates compared to leased homes. 9 Home prices are projected to increase by 4.7 percent by February 2019, according to CoreLogic's Home Price Index (HPI) and HPI Forecast. This forecast is a projection of home prices that's calculated using the CoreLogic HPI and other economic variables, and values are derived from state- level forecasts by weighting indices according to the number of owner- occupied households for each state. The report said that 34 percent of metropolitan areas had an overvalued housing market in February, while 30 percent of the top 100 metropolitan areas were undervalued, and 34 percent were at value. 10 Mortgage credit availability is at its highest level in five years according to a report from the Urban Institute's Housing Finance Policy Center. During the fourth quarter of 2017, mortgage credit availability grew from 5.6 percent to 5.8 percent. "Significant space remains to safely expand the credit box," the Policy Center stated in its report. "If the current default risk was doubled across all channels, the risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market."