Millennials Dominate When It Comes to Homebuying

When it comes to moving more, spending more and buying more, Millennials outpace the older generations.

Millennials have been in the lead for a year now when it comes to purchasing homes. According to , they have acquired more mortgages than previous generations. In the third quarter report, Millennials reached a share of 46% of mortgage originations, and 44% in primary home loan originations. Gen X was only reported at 17% and the Baby Boomers fell to 18% share in mortgage originations. As for primary home loan orginitations, Gen X was at 39% and Baby Boomers hit 16%.

Realtor.com

Several factors are driving the Millennial consumers. According to Porch.com, Milliannials move once every two years. They are also buying more expensive homes and increasing the size of their loans. Realtor.com’s Director of Economic Research Javier Vivas explains that Millennials are getting older, with better jobs and deeper pockets which give the ability to expand their collective purchase power.

Millennials median home price went up this year 6% to $250,000, while Generation X went up 5% and Baby Boomers increased only 2%. Millennials median loan amount is up to $231,590 which is a 7.3% increase from this time last year. Growth in mortgage debt for Millennials is also greater than

the 2.6% by the Baby Boomers and 4% by Generation X.

It will be interesting to see how the Millennials purchasing trend continues in the housing market. So far, Millennials dominate the housing market and it is said this will continue for years to come.

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Affordable Housing at the Highest Level in Three Years

The NAHB/Wells Fargo Housing Opportunity Index (HOI) that was published last week reports that housing affordability topped out at its highest level in the past three years. This stems from both the low mortgage rates and healthy job market.

“With mortgage rates at historic lows, consumers are experiencing greater buying power and increased affordability,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.

Regions across the nation varied in the third quarter report. The most affordable housing marketing reported in the nation was Scranton-Wilkes-Barre-Hazleton, Pa. where 89.3% of new and existing

homes sold were to affordable families (with an area median income of $67,000). The least affordable major market was San Francisco where just 8.4% homes sold were to families earning the area’s median income of $133,800.

The top five affordable housing markets in the major regions were Indianapolis-Carmel-Anderson, Ind.; Youngstown-Warren-Boardman, Ohio-Pa.; Syracuse, N.Y.; and Harrisburg-Carlisle, Pa. The smaller regions included Monroe, Mich., Cumberland, Md.-W. Va.; Davenport-Moline-Rock Island, Iowa-Ill.; Kokomo, Ind.; and Elizabethtown-Fort Knox, Ky.

Those making the least affordable major markets were Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and San Diego-Carlsbad. In the smaller markets those that hit the bottom of the chart were all located in California. These included Santa Cruz-Watsonville; San Luis Obispo-Paso Robles-Arroyo Grande; Napa; and Santa Rosa.

Even with those areas that were not favorable to the affordable market, the total across the board was up to 63.6% from last quarter reported at 60.9%. The data was based off all the new and existing homes sold between July and September of this year. The homes were based off those sold to families earning the U.S. median income of $75,500.

Forecasters predict this is a great time to purchase a home with the national median home price holding steady at $280,000. With both the steady median home price and the average mortgage rates declining at a three-year low, now is the time to buy.

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Mandeville to Get a Felix’s Restaurant & Oyster Bar

Felix’s is a staple on the French Quarter for those who are craving oysters and has been since the

1940’s. In 2012, Danny Conwill purchased the restaurant and has since franchised. Along with the original French Quarter restaurant there are currently two more locations, one in Gulfport, Mississippi and one on the New Orleans lakefront.

The new location in Mandeville plans to open in November 2019 in the Village Shopping Center (the old N’tini’s location). Robbie Orgeron, manager of Felix’s Restaurant Group is already staffing the new location.

While many characteristics in the old N’tini’s are still present, the interior of the restaurant was completely renovated. Orgeron said with this location they wanted to create a more open space for family and group dining.

“It’s the same Felix’s, but we’re designing it for the business we know is big here,” he said.
Dividing walls were taken down and replaced with a long banquette and bar and oyster counter. The dining room has a view to the grills where patrons can watch the cooks prepare their meals. Large

TVs have been placed in the bar and dining room which will show games and other sporting events.

Mandeville residents can look forward to the bigger menu which is served in their lakefront location. There will be more entrees, and a range of seasonal boiled seafood such as shrimp, crawfish, blue crabs and crab legs(also steamed).

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September was a Positive Month For New Home Sales

This September was reported to be 15.5% higher year-over-year due to the lower mortgage rates. The National Association of Home Builders’ data shows that sales were 7.2% higher in the first nine months of 2019 than those reported in the first nine months of 2018. This first nine months this year

brought in 527,000 sales beating the 491,000 sales reported for the same time frame in 2018.

Signs show sales volume increasing with the more new homes that are reported being built. New home sales for the first nine months of 2019 were up 12.8% in the South, and 7.3% in the West compared to the first nine months of last year.

This fall is a great time to purchase a new home with the median new home sales price at $299,400. Right now, nearly 15% of newly built homes are priced under $200,000! This buyers' market will not last, so if you are in the market to purchase a home, buy your new home before the new year.

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Reasons Why the Biggest Housing Boom in History Is Just Beginning

The year 2006 brought one of the most profitable side jobs for Americans, flipping houses. In fact, that year, it was reported that one in over ten homes purchased were to flip. In 2008, it all came crashing down. Many went bankrupt because they were stuck with owning flips that were on the fast pace to a dramatic depreciation in value. The housing crash not only affected the housing market, but also caused Americans to lose their jobs and businesses. Fortunately things are turning around for the housing market. Today, housing stocks are one of the best investments out there.

According to Forbes.com housing stocks are currently booming. NVR Inc., a homebuilder, is a slam dunk. It was reported that in February 2019, NVR stocks were at a 45% gain beating the S&P 500 at 10%. Those that purchased the stock back in February have made a lot of money. According to the site’s research, housing stocks will be the way to go for years to come.

Another two stocks to invest in are Vulcan Materials (VMC) and Martin Marietta Materials (MLM). Both companies sell concrete and gravel which is used a lot in the house building industry. Homebuilders use both for housing

foundations, roads and sidewalks. According to the chart, these two stocks have rocketed in the past year. Revenues in the company are rising and hitting all-time highs.

Housing expert Barry Habib, founder and CEO of MBS Highway, has the insider knowledge from the top players in the US housing market. The biggest issue he sees is supply and demand. Since 2009, only 900,000 homes have been built per year. Habib says this is the lowest inventory since the 1950’s. This is one of the biggest

housing shortages we have had. He says that with existing inventory, it would take under six months to sell everything currently on the market.

“The most important driver of home prices is supply and demand. And right now, there is a chronic undersupply of homes in America,” Habib stated.

Habib believes the market is about to be flooded with homebuyers. Millennials have been recorded to be the biggest generation the country has seen. The National Association of Realtors states that one in three homebuyers today is a Millennial.

“On average, folks buy their first home at age 33. Guess what the median age of Millennials is right now? 34. In the past year or two, the first wave of young homebuyers came into the market. But every year for the next decade, tens of millions of Millennials will hit home-buying age.”

This flood will definitely play an important role in the prices of homes. Supply and demand is the most important driver for home prices. With such a tight supply in inventory the housing market will continue to boom.

What does that mean for homebuilders? They will have job security for a while to come. This fall, new home starts rose to their highest level since the summer of 2007 and building permits are at the highest level since the spring of 2007. Habib believes “the American housing boom has years to run.”

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A Busy Mortgage Market for the Fall

Freddie Mac reported a small bump up in the 30-year rate in their last data released, however it is predicted that the rates will come down this fall. According to the latest data, the 30-year fixed-rate average is now at 3.65 percent with an average 0.6 point and the 15-year fixed-rate is now at 3.14 percent with an average 0.5 point.

Many lackluster economic views are putting pressure on the mortgage rates to fall. Bankrate.com reported that close to three-quarters of economic experts predict the rates will fall this week. The U.S.

Treasuries rose and yields have fallen. The 10-year bond dropped to 1.6 percent at the beginning of Oct. 2019 and just two weeks ago, it was reported at 1.8 percent. When U.S. bonds dip, the mortgage rates usually follow.

“Fueled by low rates and solid home-buyer demand, this fall’s mortgage market continues to be busy,” said Bob Broeksmit, MBA president and CEO. “Mortgage applications for both refinances and home purchases increased last week, and the year-over-year gains were even more impressive. With rates expected to stay around 4 percent, overall activity in the final three months of 2019 should stay solidly above last year’s levels, when borrowing costs were much higher.”

The Mortgage Bankers Association reported that mortgage applications are on the rise. Their report shows an 8.1 percent increase from the previous week’s report. The report also relayed a 14 percent jump in the refinance index and a 1 percent jump in the purchase index.

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End of September Seeing Lowered Rates

The year is coming to an end and we have now seen the second cut in rates in 2019. The Federal Reserve announced that there will be a reduction in the key, short-term federal funds rate by 25 basis points to a top rate of 2%. The cut stems from a set of increases enacted in 2018.

Another big move on the Fed’s part was a reduction in the interest rate it pays on bank reserves. This move came in hopes to improve the ability of the Fed to target the federal funds rate in markets.

Concerns in the future economy has the Fed’s leadership in disagreement and their hold on the interest rate it pays on bank reserves in a weaker state. Fed regional presidents, members of the FOMC, had a disagreement that was the highest number since the year 2014. Three of the Fed regional presidents voted no for the change in in the rate. Two opposing it altogether and one urging a 50 basis point reduction.

Even with a few concerns the Fed’s still believe the labor market is strong and the economy is still rising at a “moderate” rate. This fares the same in the home building industry. Household spending is still going strong.

The action of reversing the high cycles of 2018 has been a positive in the decline in rates this year. This has been a net positive for what the future holds for the housing demand and home construction. This comes off the 10-year low for housing affordability that occurred last Fall.

The National Home Builders Association forecast there will be another cut before year end.

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