Today's super-low mortgage rates present a rare opportunity for young millenials, primarily first-time homebuyers. Many of these prospective buyers are responding to the advantages of the low rates, but many others are not.
Low mortgage rates could particularly expand the buying power for millennial, first-time purchasers, according to Ellie Mae's monthly Millennial Tracker, as noted in a report by the National Association of Realtors..
"Understanding Your Millennial Buyers"
Lower rates can be a boon for many consumers — such as home owners looking to refinance — but the low rates may help get first-time home buyers on the move, according to Ellie Mae's report.
"Interest rates decreased to 3.763 percent in August, according to Ellie Mae. The average loan amount to millennial borrowers rose to $181,326 from July's average of $180,413."
The report pointed out how the low rates are affecting decisions by millenials to purchase a home.
"Millennials are really taking advantage of the lower interest rates in terms of buying power," says Joe Tyrrell, Ellie Mae executive vice president of corporate strategy. The low interest rates could push millennials to "move into home ownership before family formation."
"Tyrrell says the gap is closing between the general population and the millennials in terms of loan amount. Millennials tend to take out smaller loans than other home buyers.
"Tyrrell doesn't believe any movement from the Federal Reserve to raise its interest rates on the horizon to derail millennials either.
"Ellie Mae's report also showed the average debt-to-income ratio rose to 24/36 in August, and the average FICO credit score remained at 725. The share of conventional loans made to millennials rose to 63 percent in August, from 62 percent the previous month. FHA loans comprised 35 percent of all closed loans."
Q: What are the latest trends in the planning of new homes?
A: Home builders and architects have pointed to one trend that has been growing over the last few years. People want more bathrooms in their new home.
"The share of new homes started with three or more full bathrooms is on the rise. That also reflects builders' focus on the higher-end, larger homes since the end of the Great Recession," according to a report by the National Association of Realtors.
"Twenty-seven percent of new single-family homes started in 2015 had three full bathrooms and 10 percent had four or more, Census Bureau data shows. Fifty-nine percent of homes had two full bathrooms and just 4 percent had one — or less."
The report noted areas in the country where consumers seem to be most bathroom-minded.
"The South Atlantic region of the U.S. has the largest share of new homes with three or more bathrooms at 42 percent. Other regions with the highest shares of three or more bathrooms in new-home starts included the Mountain region at 39 percent, Pacific region at 38 percent, and West South Central divisions at 38 percent.
"Meanwhile, the East North Central division had the lowest share of new homes with three or more bathrooms at 24 percent."
To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. Jim Woodard's email: [email protected] COPYRIGHT 2016 CREATORS.COM.