March 11, 2015 - Buying Bedford Real Estate

The albatross of student debt, underemployment and weak wage growth didn’t prevent millennials from accounting for the largest share of home purchases, according to data released Wednesday.

The National Association of Realtors said millennials, or those between 18 and 34 years old, accounted for the largest share of home buyers last year at 32%, according to a report from the National Association of Realtors. Millennials make up 23% of the U.S. population, according to separate data from the Census Bureau.

This is the third year of the survey, and the second year millennials had the top spot.

The median age of millennial homebuyers was 29, their median income was $76,900 and they typically bought a 1,720-square foot home costing $189,900.

Generation X, or those between 35 and 49, was closely behind with a 27% share. The median buyer in that group was 41 years old, had a median income of $104,600 and purchased a 1,890-square-foot home costing $250,000.

The median home purchase for all buyers was 1,870 square feet and cost $216,000.

According to the survey, 13% of all home purchases were by a multi-generational household, consisting of adult siblings, adult children, parents and/or grandparents.

http://www.marketwatch.com/story/millennials-accounted-for-largest-share-of-home-purchases-last-year-2015-03-11

A sharp jump in mortgage rates last Friday took its toll on home lending, leaving mostly high-end home buyers on the playing field.

Total mortgage application volume fell 1.3 percent week-to-week on a seasonally adjusted basis for the week ending March 6^th, according to the Mortgage Bankers Association (MBA). The fall was driven by a 3 percent drop in applications to refinance. Refinance volume is now at its lowest level since January and accounts for just 60 percent of all applications. Refinances had seen as much as an 80 percent share of all applications in recent years, as rates dipped and home buying stalled.

Mortgage applications to purchase a home rose two percent for the week and are two percent higher than a year ago. The slight increase, however, was largely due to higher-end home buyers. The average purchase loan size last week soared to $294,900, the highest level ever recorded on the MBA survey. The median price of a U.S. home sold in January was $199,600, according to the National Association of Realtors.

“The record high average loan size indicates that the strength of the market remains at the high end. We have not yet seen an influx of first-time homebuyers,” noted Michael Fratantoni, chief economist for the MBA.

A stronger-than-expected February employment report last Friday pushed interest rates higher, as investors now expect the Federal Reserve to increase its lending rate by mid-year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.01 percent, the highest level since the week ending January 2, 2015, from 3.96 percent, with points increasing to 0.39 from 0.30 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA.

Interest rates edged back a bit Tuesday, as the stock market sold off, but 4 percent may be the new normal now for 30-year fixed rate loans, with the expectation that they would move higher later this year. While these moves may seem small, they can take away significant purchasing power, especially for lower income borrowers using small down payments. With home price gains accelerating, and still tight supply of homes for sale, home buyers are especially sensitive to every potential penny lost or gained.

Buying Bedford Real Estate

Robert Paul Realtor buying Bedford real estate

Daily Archives: March 11, 2015

Millennials accounted for largest share of home purchases last year | Bedford Corners Real Estate

Weekly mortgage applications drop as rates jump | Chappaqua Real Estate