Millennials
Millennial Considerations
Freddie Mac reported that in a survey of Millennials conducted by a national lender, one third of Millennials had their dogs in mind when deciding to buy a home. Giving a much loved dog a yard ranked higher than getting married or having a baby as the primary reason. Only more living space and building equity ranked higher. Forty two percent of the Millennials that haven’t bought a home said that owning or wanting to own a dog would be a big factor in their home buying decision. As a result, not highlighting a home’s amenities that are geared toward man’s best friend could be catastrophic.
As we push toward the end of 2017, early indicators are favorable for 2018. This year we had moderate economic growth, fairly solid job gains and relatively low mortgage interest rates. Most indicators show those same conditions persisting into next year. From a mortgage market perspective, if the economic environment remains the same, expect purchase mortgage volume increases, fewer rate and term refi and borrowers tapping home equity for a variety of reasons.
2018 Trends
According to Freddie Mac, 2018 should see modest increases in home sales. The economy and more modest house price growth should push purchase origination volume higher next year by a couple of percentage points over 2017 numbers. There are a few factors that will have the growth in home sales primarily driven by new homes sales but only if single family construction numbers continue to push higher.
Limited inventory will remain a persistent problem. That limited inventory will have many investing in their current homes. Renovating to meet changing needs instead of selling and moving up. This year saw limited supply and high demand drive up home prices. The FHFA house price index indicates that house prices rose 6.6% from 2Q 2016 to 2Q 2017. A gradual increase in housing starts and moderate increases in mortgage rates will help to reduce house price growth next year. Freddie Mac is forecasting average U.S. house price growth of 4.9% in 2018.