“…As more millennials age into their early-to-mid thirties, and begin to get married, have children and form households, they will continue to be the primary drivers of homeownership demand.”

“according to Census Bureau and First American calculations, over the next 10 years, aging millennials are expected to purchase at least 10 million new homes. By 2060, it is estimated millennials will have produced more than 20 million first-time home buyers.”

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“In a 2017 survey, 68% of renters cited saving for a down payment as an obstacle to homeownership. Thirty-nine percent of renters believe that more than 20% is needed for a down payment and many renters are unaware of low-down payment programs.”

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What are the reasons for this demographic’s booming interest in homeownership?

• Divorce rate: Known as the “Gray Divorce,” the divorce rate has doubled for those ages 50 and over and tripled for those ages 65 and over.
• Average life expectancy: For women it’s 81, four years longer than men.
• To build home equity: Women want to build equity through their home. As mentioned by Bankrate, “some are hoping to escape rising rents, some might be downsizing or looking for a new start,” especially those going through a gray divorce.

Are they only downsizing and buying small homes?

“The number of female billionaires grew faster globally in 2017 than the number of male billionaires. This redistribution of wealth has seen an impact on luxury real estate both in its purchase and design attributes – and obviously, this is important for realtors to recognize when relating to their clients.”

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Myths About Down Payment Requirements! 

“Despite limited awareness, every state has programs that provide grants and loans to make homeownership more attainable, with average assistance in various states ranging from $2,436 to $21,171.”

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For a while now baby boomers have been blamed for a portion of the housing market’s current lack of housing inventory, but should they really be getting the blame?

Here’s what some of the experts have to say on the subject:

Aaron Terrazas, Senior Economist at Zillow, says that “Boomers are healthier and working longer than previous generations, which means they aren't yet ready to sell their homes.”

According to a study by Realtor.com, 85% of baby boomers indicated they were not planning to sell their homes.

It is true that baby boomers are healthier and are thus working and living longer, but are they also refusing to sell their homes? 

Last month, Trulia looked at the housing situation of seniors (aged 65+) today compared to that of a decade ago. Trulia’s study revealed that:

“Although seniors appear to be delaying downsizing until later in life, as a group, households 65 and over are still downsizing at roughly the same rate as in years past.”

Trulia also explains that, 

“5.5% of households 65 and over moved, pretty evenly split between moves to single family (2.7%) and multifamily (2.4%) homes. In 2005, these percentages were virtually the same, with 5.5% of senior households moving, including 2.5% into single family and 2.5% into multifamily homes.”

So, if these percentages are the same, what is the challenge?

Recent reports tell us that the older population grew from 3 million in 1900 to 47.8 million in 2017.

In addition, the Census recently revised the numbers from their National Population Projections:

“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history…By 2035, there will be 78.0 million people 65 years and older compared to 76.7 million under the age of 18.”

Bottom Line

If you are a baby boomer who is not sure whether you should downsize or move to a warmer climate (other people are doing it, why not you?), let’s get together so we can help you evaluate your options today!

For a while now baby boomers have been blamed for a portion of the housing market’s current lack of housing inventory, but should they really be getting the blame?

Here’s what some of the experts have to say on the subject:

Aaron Terrazas, Senior Economist at Zillow, says that “Boomers are healthier and working longer than previous generations, which means they aren't yet ready to sell their homes.”

According to a study by Realtor.com, 85% of baby boomers indicated they were not planning to sell their homes.

It is true that baby boomers are healthier and are thus working and living longer, but are they also refusing to sell their homes? 

Last month, Trulia looked at the housing situation of seniors (aged 65+) today compared to that of a decade ago. Trulia’s study revealed that:

“Although seniors appear to be delaying downsizing until later in life, as a group, households 65 and over are still downsizing at roughly the same rate as in years past.”

Trulia also explains that, 

“5.5% of households 65 and over moved, pretty evenly split between moves to single family (2.7%) and multifamily (2.4%) homes. In 2005, these percentages were virtually the same, with 5.5% of senior households moving, including 2.5% into single family and 2.5% into multifamily homes.”

So, if these percentages are the same, what is the challenge?

Recent reports tell us that the older population grew from 3 million in 1900 to 47.8 million in 2017.

In addition, the Census recently revised the numbers from their National Population Projections:

“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history…By 2035, there will be 78.0 million people 65 years and older compared to 76.7 million under the age of 18.”

Bottom Line

If you are a baby boomer who is not sure whether you should downsize or move to a warmer climate (other people are doing it, why not you?), let’s get together so we can help you evaluate your options today!

For a while now baby boomers have been blamed for a portion of the housing market’s current lack of housing inventory, but should they really be getting the blame? [expired_at] => [featured_image] => https://files.simplifyingthemarket.com/wp-content/uploads/2018/10/01171923/20181030-Share-STM.jpg [id] => 1195 [published_at] => 2018-10-16T10:00:11Z [related] => Array ( ) [slug] => baby-boomers-are-downsizing-are-you-ready-to-move [status] => published [tags] => Array ( ) [title] => Baby Boomers are Downsizing, Are You Ready to Move? [updated_at] => 2018-10-15T10:39:03Z [url] => /2018/10/16/baby-boomers-are-downsizing-are-you-ready-to-move/ )

“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory…we expect significant debate about whether this is a bullish or bearish sign. In our view, the short-term narrative will probably be confusing, but more sustainable growth and affordability will likely be the end result.”

Dr. Svenja Gudell, Zillow Chief Economist:

"These seller challenges don't indicate we're suddenly in a buyers’ market – we don't expect market conditions to shift decidedly in favor of buyers until 2020 or later. But buyers certainly are starting to balk at the rapid rise in prices and home values are starting to grow at a less frenetic pace."

Danielle Hale, Chief Economist of realtor.com:

“The signs are pointing to a market that's shifting toward buyers. But, in most places, we’re still a long way from a full reversal.”

“When do you expect U.S. housing market conditions to shift decidedly in favor of homebuyers?”

Bottom Line

“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory…we expect significant debate about whether this is a bullish or bearish sign. In our view, the short-term narrative will probably be confusing, but more sustainable growth and affordability will likely be the end result.”

Children are More Likely to Own a Home if Their Parents Did

“A young adult’s odds of homeownership are highly correlated with their parent’s homeownership. Without controlling for such factors as age, income, education, marital status, and race or ethnicity, there is a 17 percentage-point gap between the homeownership rate for young adults whose parents are renters and young adults whose parents are homeowners.”

Bottom Line

“Realtors® throughout the country continue to stress that there’s considerable pent-up demand for buying a home among the millennial households in their market.   Unfortunately, they’re just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains.”

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Who is David Bach?

“…If you were paying $1,000 a month, now you're going to make $1,100 payments every month. Inform the bank that you are doing this and that you want the extra $100 a month to be applied to the principal (not the interest)."

What will happen to your mortgage?

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Who is David Bach?

Why the dramatic increase?

“Sellers 37 years and younger stayed in their home for six years…”

What does this mean for housing?

Why the dramatic increase?

“Sellers 37 years and younger stayed in their home for six years…”

What does this mean for housing?

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they'd like or renovate an outdated part of their living space.

Some Highlights

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they'd like or renovate an outdated part of their living space.

Some Highlights:

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.

1. Down Payment

2. FICO^®Scores

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E-Commerce & Logistics

Generational Change & Demographics

“Too many developers have become dependent on making decisions based on baby boomer’s preferences. The 75 million millennials are coming, and they will influence real estate and commerce even faster than the baby boomers in the 50s and 60s.”

Interest Rates & the Economy

“Rising rates can be good and bad for the economy. Bad for borrowing money with additional costs, but good to control inflation and help grow the economy at a moderate pace.”

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So what features in a home are most important to kids?

“As a parent of two kids, I know from experience that including children in the home buying process is not only fun for the whole family, but also educational for our homebuyers of tomorrow.”

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What’s a Starter Home?

Finding Their Forever Homes Now

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What’s a Starter Home?

Finding Their Forever Homes Now

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• According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.
• According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.
• More and more ‘old millennials’ (25-36) are realizing that homeownership is within their grasp now!

Some Highlights

• According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.
• According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.
• More and more ‘old millennials’ (25-36) are realizing that homeownership is within their grasp now!

Some Highlights:

• According to the US Census Bureau, ‘millennials’ are defined as 18-36-year-olds.
• According to NAR’s latest Profile of Home Buyers & Sellers, the median age of all first-time home buyers is 32.

The Top 5 Best States for Millennials are:

1. Washington, D.C. (also ranks highest in percentage of millennials already living there!)
2. North Dakota (lowest unemployment rate)
3. Minnesota (highest millennial homeownership rate)
4. Massachusetts (highest percentage of millennials with health insurance coverage)
5. Iowa (ranked #1 in lowest housing cost for millennials)

1. Washington, D.C.
2. New York
3. Massachusetts
4. Washington
5. California

1. Minnesota
2. West Virginia
3. Indiana
4. Utah
5. Delaware

Bottom Line

“A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”

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So, what is holding renters back?

What would make renters take the plunge?

“Housing demand in 2018 will be fueled by more millennials finally deciding to marry and have kids and the expectations that solid job growth and the strengthening economy will push incomes higher.”

“However, with prices and mortgage rates also expected to increase, affordability pressures will persist. That is why it is critical for much of the country to start seeing a significant hike in new and existing housing supply. Otherwise, many would-be first-time buyers will be forced to continue renting and not reach their dream of being a homeowner.”

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Who is David Bach?

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.” 

“Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

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Who is David Bach?

“Millennials deserve more credit – both from themselves and from others – for their mindfulness when it comes to money and their lives.”

• 63% are saving – (47% have $15,000 or more in savings)
• 54% are budgeting – (73% who have a budget stick to it every month)
• 57% have a savings goal – (67% who have a goal stick to it every month)
• 46% have asked for a raise in the past 2 years – (80% who asked for a raise got one)
• 59% feel financially secure – (16% have $100,000 or more in savings)

“The housing shortage forced many first-time homebuyers to consider smaller homes and condos as a way to literally get their foot in the door. Our survey data reveals that we may see more of these homes hitting the market in the next year.”

Bottom Line

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they'd like, or renovate an outdated part of their living space.

Some Highlights

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they'd like, or renovate an outdated part of their living space.

Some Highlights:

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.

“With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market.”

Bottom Line

“Between 2009 and 2015, the number of renters aged 55 or above rose 28 percent, while those aged 34 or younger only increased 3 percent... Meanwhile, more than 5 million baby boomers across the nation are expected to rent their next home by 2020, according to a 2016 analysis from Freddie Mac.”

A mortgage payment remains fixed. Rents, however…

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