Daily Archives: April 5, 2019

Millennials increase buying in February | Mt Kisco Real Estate

As the housing market shifts further in favor of homebuyers, Ellie Mae’slatest Millennial Tracker Survey reveals that purchase requests from Millennials increased to 87% of all purchase requests made in February, a 2% increase from January.

The survey also revealed that although conventional loans continue to be the most popular loan product among the generation, they fell slightly to 68% of all loans.

Interest in refinances fell two percentage points from the previous month, coming in at 11% of all loans for Millennial borrowers.

“The percentage of purchase loans is on the rise with Millennials continuing to enter the homebuying market for their first or maybe even second purchase,” Executive Vice President of Strategy and Technology Joe Tyrrell said. “The increase in days-to-close we saw in February is relative to the percentage increase in purchases versus refinances, as purchases typically take longer to close.

According to the survey, it typically took Millennials 46 days to close on conventional loans, which is the longest average time to close since January 2017. Among conventional loans closed by Millennials in February, it typically took the generation 44 and 53 days to close on a purchase and refinance loans, respectively.

Notably, ​​​the Millennial Tracker also discovered that the average time to close on all loans decreased to 42 days in February. During the same period, the average closing time on FHA loans fell to 42 days, while the average time to close on VA loans increased to 59 days month-to-month.

Lastly, the survey highlighted that the average FICO score for Millennial borrowers edged up to 723 in January, rising from 722 in January, according to Ellie Mae.

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https://www.housingwire.com/articles/48714-ellie-mae-millennials-are-taking-advantage-of-cooling-housing-market?id=48714-ellie-mae-millennials-are-taking-advantage-of-cooling-housing-market&utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=71438785&_hsenc=p2ANqtz-_Gafi0qhppC7OwUuK27kQ-cuE-5XaaX3WMuEgJRTy5xo_V9NyrxD4fGTwuNxZLA0OukTYBNiW-Ny31KAk_u79D4j4PFA&_hsmi=71438785

How tariffs increase building costs | Mt Kisco Real Estate

In July 2018, the United States Trade Representative (USTR) announced its intention to levy tariffs on a series of imports from China. USTR rolled out proposed tariffs in three waves, with the third list (List 3) covering approximately $200 billion worth of Chinese imports. The List 3 goods comprises 5745 items, approximately 450 of which are commonly used in the residential construction industry.

The NAHB economics department examined the imports identified on List 3 and published a special study that estimated the economic effects that the proposed 10-percent tariff would have on the residential construction industry. The value of the 450 building materials included on List 3 is roughly $10 billion. A 10-percent tariff on these goods, therefore, represented a $1 billion tax increase on the housing industry.

One of the questions going into the fourth quarter of 2018 was to what extent the tariffs—even the announcement of intent to levy tariffs in the future—would affect the amount of imports of building materials and construction supplies. As the recently released January 2019 trade data show, the effects of both tariffs levied, as well as announcement of future tariffs, have been substantial.

To analyze these effects, the average monthly change in import value of the 450 items between 2011 and 2017 was compared to monthly changes from January 2018 through January 2019. The “floating” nature of major Chinese holidays affecting capital flows necessitated comparison to the historical average in order to smooth out holiday induced seasonal effects that may occur in different months in different years.

As illustrated in the figure below, the largest disparities between trade flows in 2018 and the 2011-2017 period occurred in April and December 2018.

Although the 2018 study on building materials imports focused on List 3, some goods used in residential construction were affected by the section 232 tariffs (i.e. tariffs levied based on national security concerns) imposed on certain steel and aluminum imports (25 percent and 10 percent, respectively). These tariffs went into effect in March 2018 and clearly had an effect on April 2018 imports from China.

When the USTR announced tariffs to be levied on List 3 beginning September 24th, 2018, the office also announced that the tariff rate would be time sensitive. Although the tariff would initially be set at 10 percent, that rate had a planned increase to 25 percent on January 1st, 2019 in the event that China and the United States could not resolve their differences by the end of the year.

Expectations of a substantial tariff rate increasingly took hold as it was reported that the two countries were not making meaningful progress in negotiations. The data indicate that these expectations brought the timing of imports forward (to December) in order to avoid the increase.

On December 17th, 2018, however, President Trump announced that the rate hike would be delayed to March. Consequently, the data show that imports of building materials declined more than 20 percent in January 2019—in stark contrast to the historical 15-percent increase seen in January.

The President delayed the tariff rate increase indefinitely on February 24, 2019, citing “substantial progress” in trade talks between American and Chinese officials. NAHB will continue to monitor import data releases to examine the possible effects of that announcement.

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