More Young People Are Buying Homes

There's a common misconception that younger generations aren't interested in homeownership. Many people point to the fact that millennials put off purchasing their first home as a reason for this belief.

Odeta Kushi, Deputy Chief Economist for First American, explains why millennials have put off certain milestones linked to homeownership. Those delays led to their homeownership rates trailing slightly behind older generations:

Historically, millennials have delayed the critical lifestyle choices often linked to buying a first home, including getting married and having children, in order to further their education. This is clear in cross-generational comparisons of homeownership rates which show millennials lagging their generational predecessors.

So, its partially true that some millennials have waited on homeownership to focus on other things in their lives and thats impacting certain housing market trends.

Data from the National Association of Realtors (NAR) indicates the average age of a first-time homebuyer is higher today than its been over the past 40 years. As the graph below shows, homebuyers today are purchasing their first home an average of 4 years later than people in the 1980s and early 1990s:But just because millennials are hitting certain milestones later in life doesn't mean they're not interested in becoming homeowners. The recent U.S. Census reveals a significant increase in homeownership rates for millennials and other young homebuyers.As the graph above shows, millennials are entering the market in full force, and their share of the market is growing. Based on the data, the belief that younger generations don't want to buy homes is a misconception. In fact, the recent Capital Market Outlook report from Merrill-Lynch further drives home this point, as it specifically mentions the effect millennials are having on demand:

Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle.”

Kushi is following the trend of millennial homeownership and puts it more simply, saying:

. . . it’s clear that younger households (millennials!) are driving homeownership growth.

As the largest generation, millennials impact on the market is growing as more and more people from that generation reach homebuying age and Generation Z isn't far behind, either. That means younger generations will likely continue to drive demand in the housing market for years to come.

Bottom Line

If you’re a member of a younger generation and interested in purchasing a home, you’re not alone. Many of your peers are on their path to homeownership, too. Let’s connect today and discuss what you can do to accomplish your homebuying goals.

 

Options for First-Time Homebuyers

Some Highlights

• With a housing market this competitive, sometimes you have to think outside the box.
• Work with your trusted real estate advisors to do things like assess your budget, expand your search radius, look into other options, and determine your true needs.
• If you’re having trouble finding your first home, lets connect to explore your options. It’s out there!

 

Do Your Windows Need Service?

Windows are one of the most important features of your house. They let in light, let in fresh air, and can have a significant impact on the overall look of your rooms. With that said, windows do require a bit of maintenance from time to time. Most of the time, it will be simple things like cleaning the windows and checking window screens for damage to make sure that your windows are still operating in tip-top shape. Occasionally, though, you may find that your windows require a bit more service to keep them from showing wear and other damage over time.

If you aren’t sure what sort of service and maintenance your windows might need, don’t worry. A lot of homeowners are somewhat in the dark about proper window maintenance, and the amount of service your windows need depends on a lot of factors including their age and the climate where you live. To help ensure that your windows get the attention that they deserve, here is some info on proper window maintenance and how to tell if your windows need additional service.

Window Service

There are a number of types of service and other maintenance that your windows may require from time to time. Some of these are simple, such as periodic cleaning on both the inside and the outside of the window. Some maintenance operations are a bit more complicated, however.

When checking your windows to see if they need service, there are several things that you should check for. Open the windows to make sure that they’re operating correctly, taking note of any difficulties that you have or if they seem to stick at any point when opening or closing them. Inspect the windows for any signs of visible damage, both to the panes and to other components such as the frame, muntin sections, or the sill. Look for signs of water getting trapped in between panes in double-paned windows, and also feel around for drafts or signs of leaks. You should also pick a quiet time to listen for a few minutes near the windows to see if more noise than usual seems to be getting through. Any of these issues will require correction, and the sooner you identify them then the easier that service will be.

When to Service Your Windows

Unless something obvious like a rock striking a windowpane happens and causes physical damage to one of your windows, it can be a bit difficult to tell when your windows actually need service. Since you don’t have time to constantly check over your windows, it’s a good idea to check them at least a couple of times per year. You can usually make the most out of these maintenance checks by doing one early in the spring when temperatures are starting to rise after winter, and again in late summer or early fall as temps start to drop again. This will alert you to potential problems caused by the intensity of winter cold or summer heat and preps you for seasons with a lot of rain, drafts, and other issues.

With that said, it doesn’t hurt to give your windows the occasional once-over as well. Clean them or at least wipe them down once a month, checking for any obvious signs of problems as you do. You should also do a more thorough inspection if you notice drafts, louder noises, or signs of leaks near the windows. You don’t have to go in-depth with your windows during these periodic checks unless there’s some sign of trouble, but even just a glance every now and then can do wonders for early detection of problems.

The Community and Economic Impacts of a Home Sale

If you're thinking of buying or selling a house, chances are you're focusing on the many extraordinary ways it'll change your life. What you may not realize is that decision impacts peoples lives far beyond your own. Home purchases and sales are significant drivers of economic activity. They have a major impact on your community and the entire U.S. economy via the multiple industries and professionals that take part in the process.

The National Association of Realtors (NAR) releases a report each year that highlights just how much economic activity a home sale generates. The chart below shows how the sale of both a newly built home and an existing home impact the economy:To dive a level deeper, NAR also provides a detailed look at how that varies state-by-state for newly-built homes (see map below):As you can see, a single home sale can have a massive effect on the overall economy. Ali Wolf, Chief Economist for Zonda, talks about this in a recent article, noting there's a significant impact at each distinct phase of the transaction:

The housing market contributes to the economy in four main stages: during planning and land development, throughout the actual construction of the home, at the point of sale, and upon moving in.

When you buy or sell a home, you're leaving a lasting impression on the community at large in addition to fulfilling your own needs. That's because each stage of the process involves numerous contractors, specialists, lawyers, town and city officials, and so many other professionals. Every individual you work with, from your trusted real estate advisor to the architects who design new homes, has their own team of professionals involved behind the scenes.

Bottom Line

Homebuyers and sellers are economic drivers in their community and beyond. If you're thinking of buying or selling, lets connect today to start the process. It wont just change your life; it'll make a powerful impact on our entire community.

 

Looking for a Place To Call Home? Consider a Condominium.

Its no secret that one of the top stories in todays real estate market is low housing supply and high buyer demand. If you're a first-time buyer looking for a starter home or are someone whos interested in downsizing, it may be worth considering a condominium (condo) as a worthwhile option.

In fact, trends indicate condos are gaining popularity among buyers. In the latest Existing Homes Sales Report from the National Association of Realtors (NAR), the data shows condo sales rising throughout the first half of this year (see graph below):There are a few reasons more and more people are opting to buy condos the benefits of condo life can be quite compelling. Lets explore the main perks to find out if a condo is a good fit for you.

Affordability

According to the NAR report, the median sales price of a condo is roughly 59,000 less than the median price of a single-family detached home (see graph below). This makes condos a great option for first-time homebuyers, those with limited down payment savings, or those looking to save money by downsizing.

Maintenance

A recent article from BankRate adds low maintenance as another perk of a condo lifestyle. Generally, exterior maintenance for condos is handled by a Homeowners Association (HOA). This can include things like landscaping and upholding a certain standard of cleanliness and condition for walkways, siding, and roofs. If you're looking for a lower-maintenance option or see the appeal in being hands-off with upkeep, condos may be a good choice for you. With exterior maintenance off your plate, you'll have more time for yourself and your hobbies.

Amenities

You can use that free time to enjoy some of the value-adding features your condo community may have, which could include dog parks, pools, a rentable clubhouse and grilling area for events, and more. If being able to host or attend community social outings is important to you, condos may give you more opportunities to enjoy the company of your neighbors. As a bonus, some condos even have gyms and on-site security teams.

Ultimately, the choice is yours. Condos are great options that often come with various features and benefits that may be important for your lifestyle. Fannie Mae sums up the appeal nicely:

Condominiums, or condos, can be great alternatives to detached homes. City dwellers, singles, couples, seniors, and many others may find condos that suit their needs and budgets. Others may simply prefer low-maintenance living. Buyers who feel priced out of homes may discover condos offer an affordable homeownership alternative.

Bottom Line

If you're looking for a home, it may be time to consider a condo as an option. Lets connect to explore if one would be a good fit for your homeownership needs.

 

Are Houses Less Affordable Than They Were in Past Decades?

There are many headlines about how housing affordability is declining. The headlines are correct: its less affordable to purchase a home today than it was a year ago. However, its important to give this trend context. Is it less expensive to buy a house today than it was in 2005? What about 1995? What happens if we go all the way back to 1985? Or even 1975?

Obviously, the price of a home has appreciated dramatically over the last 45 years. So have the prices of milk, bread, and just about every other consumable. Prices rise over time we know it as inflation.

However, when we look at housing, price is just one component that makes up the monthly cost of the home. Another key factor is the mortgage rate at the time of purchase.

Lets look back at the cost of a home over the last five decades and adjust it for inflation by converting that cost to 2021 dollars. Here's the methodology for each data point of the table below:

• Mortgage Amount: Take the median sales price at the end of the second quarter of each year as reported by the Fed and assume that the buyer made a 10% down payment.
• Mortgage Rate: Look at the monthly 30-year fixed rate for June of that year as reported by Freddie Mac.
• P&I: Use a mortgage calculator to determine the monthly principal and interest on the loan.
• In 2021 Dollars: Use an inflation calculator to determine what each payment would be when adjusted for inflation. Green means the homes were less expensive than today. Red means they were more expensive.

As the chart shows, when adjusted for inflation, there were only two times in the last 45 years that it was less expensive to own a home than it is today.

1. Last year: Prices saw strong appreciation over the last year and mortgage rates have remained relatively flat. Therefore, affordability weakened.
2. 2010: Home values plummeted after the housing crash 15 years ago. One-third of all sales were distressed properties (foreclosures or short sales). They sold at major discounts and negatively impacted the value of surrounding homes of course homes were more affordable then.

At every other point, even in 1975, it was more expensive to buy a home than it is today.

Bottom Line

If you want to buy a home, don't let the headlines about affordability discourage you. You cant get the deal your friend got last year, but you will get a better deal than your parents did 20 years ago and your grandparents did 40 years ago.

 

The Best Use of Time (and Money) When It Comes to Renovations

In the current sellers market, many homeowners wonder what, if anything, needs to be remodeled before they list their house. That's where a trusted real estate professional comes in. They can help you think through todays market conditions and how they impact what you should and shouldn't renovate before selling.

Here are some considerations a professional will guide you through:

1. With current supply challenges, buyers may be willing to take on projects of their own.

A more balanced market typically sees a 6-month supply of homes for sale. Above that, and were in a buyers market. Below that, and were in a sellers market. According to a recent report by the National Association of Realtors (NAR), our current supply of homes for sale, while rising, still remains solidly in sellers market territory:

Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 2020.

So, what's that mean for you? If you're a seller trying to decide whether or not to renovate, this is especially important because its indicative of buyer behavior. When there aren't enough homes for sale, buyers may be more willing to purchase a home that doesn't meet all their needs and renovate it themselves later.

2. Not all renovation projects are equal.

You don't want to spend time and money on a project that isn't worth the cost or is too niche design-wise for some homebuyers. According to an article by Renofi.com, basing home updates on what's trendy right now can be a costly mistake:

The last thing you as a homeowner want to do is center your home design around a passing fad – even worse, one that's design quality wont last a good while.

Before making any decisions, talk to your real estate advisor. They have insight into what other sellers are doing before listing their homes and how buyers are reacting to those upgrades. Don't spend the time and money to be trendy if your buyer wants to upgrade to the newest fad later, they can.

3. If you've already made upgrades this past year, your agent can help spotlight them.

If you have already completed some renovations on your house, you're not alone. The pandemic kept people at home last year, and during that time, many homeowners completed some home improvement projects. HomeAdvisors 2021 State of Home Spending Report found:

35% of households that completed an improvement project undertook some type of interior painting, while 31% completed a bathroom remodel and 26% installed new flooring.

Let your real estate professional know if you fall in this category. They can highlight any recent upgrades you've made in your houses listing.

Bottom Line

When it comes to renovations, your return-on-investment should be top of mind. Lets connect today to talk through any upgrades you've already made and to find out what you should prioritize before you sell to maximize your houses potential.