More home buyers are using reverse mortgages to purchase their next home. A new study finds that a quarter of 170 new home buyers surveyed wouldn’t have purchased a new home without using a reverse mortgage for financing.
“This is incredibly important insight, especially when you consider more and more baby boomers are moving into bigger homes rather than downsizing,” says Rob Cooper, national sales leader at Reverse Mortgage Funding LLC, which conducted the study. “Our study found there is a lot of room for improvement when it comes to recommending reverse mortgage for purchase financing because most people are not even aware of this option—or have not been well informed about it.”
The majority of borrowers who used a reverse mortgage to purchase a new home said they were able to buy a more expensive home or a property in a more desirable location because of it.
Mortgage Costs Grow 20 Times Faster Than Incomes
July 13, 2021
Housing affordability continues to decline as the hot real estate market fuels skyrocketing prices. Incomes aren’t keeping pace with the higher prices.
The median family income rose by 1.2% in May while the monthly mortgage payment jumped by 20%, according to the National Association of REALTORS®’ Housing Affordability Index.
Even as mortgage rates are down compared to a year ago—which has helped buyers save on borrowing costs—the median existing-home price has jumped 24.4% compared to the same period.
Monthly mortgage payments increased to $1,204 in May, a 20% jump compared to a year earlier. NAR’s analysis notes the annual mortgage payment—as a percentage of income—increased to 16.5% over the past year due to higher home prices and a decline in median family incomes.
Homeowners in the West have the highest mortgage payments to income share at 22.1% of income. Home prices in the West have climbed to a record high of $513,700.
The most affordable region of the U.S. in housing continues to be the Midwest, in which the median family income is $86,440. NAR’s index calculates a qualifying income as the income required to afford a mortgage so that payments are no more than 25% of a family’s income. The Midwest had a qualifying income of $44,016.
View a further breakdown of the data in NAR’s Housing Affordability Index.Source: “Housing Affordability Falls in May as Home Prices Rise Faster Than Income,” National Association of REALTORS® Economists’ Outlook blog (July 9, 2021)
Mortgage rates continued to inch lower this week as home buyers get another chance at securing ultra-low borrowing rates. Freddie Mac reports the average 30-year fixed-rate mortgage averaged 2.90%.
Home buyers can continue to benefit from low mortgage rates, particularly as home prices surge to a new record high of $350,300, Nadia Evangelou, senior economist at the National Association of REALTORS®, writes for the association’s Economists’ Outlook blog.
“Mortgage rates decreased this week following the dip in U.S. Treasury yields,” says Sam Khater, Freddie Mac’s chief economist. “While mortgage rates tend to follow Treasury yields closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs reports.”
Grocery stores were deemed an essential business and remained open during the pandemic. They also posted record sales volume. Meanwhile, many malls and other retail stores closed for months and saw plummeting sales.
That’s why more retailers want grocery stores near them to attract more foot traffic. Grocery-anchored shopping centers are drawing heightened investor interest—and higher prices, The Wall Street Journal reports.
A real estate startup wants to help renters become homeowners. Bilt Technologies has teamed with Evolve Bank & Trust and Mastercard to launch a credit card Tuesday that enables cardholders to accumulate reward points they can use toward rent and other bills—or a down payment on a future home.
Many property providers already accept credit cards for rental payments. Paying by credit card also helps renters improve their credit scores, and a good credit score is important when buying a house. “We believe paying rent should build your credit score because it’s your single largest liability,” Bilt founder Ankur Jain told The Wall Street Journal. The new credit card does not have any added fees.
Sprucing up the home has become a favorite pastime during the pandemic. Home renovation spending has increased by 15% over the last year, reaching a median outlay of $15,000, according to the 2021 Houzz & Home report, an overview of renovation in 2020 and 2021.
The main motivation to renovate over the past year, cited by 44% of survey respondents, is that they “wanted to do it all along and finally have the time.” The second driver, cited by 36% of respondents, is that they finally have the financial means. Decreased activity away from home during the pandemic has prompted more homeowners to put greater focus on their homes
Side-by-side double sinks and walk-in pantries are the most desirable and among the most essential features in a kitchen, according to the What Home Buyers Really Want, 2021 Edition report, produced by the National Association of Home Builders. The survey was based on responses from more than 3,000 recent or prospective home buyers.
More than four of every 10 buyers said the double sink is so essential in the kitchen that they would be unlikely to purchase a home without i
More than half of home buyers surveyed rated 20 of 30 kitchen features either as essential or desirable.
Buyers who head into the housing market believing they should get a home for less than the listing price may be very disappointed. Instead, they may consider that asking prices have become more like the start of an auction and be ready to start bidding.
For every listing, there is an average of 5.1 offers, according to the National Association of REALTORS®. What’s more, half of homes are being sold above list price
Additionally, “Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home,” an article at Keeping Current Matters notes
In the frenzy of the hot housing market, more buyers are being drawn to older homes for their historic charm. But where are older homes best available exactly?
LendingTree researchers analyzed Census Bureau data to find where the share of older homes—which are defined as housing units built in or before 1939—are most prevalent in the nation’s 50 largest metro areas. They found that older homes tend to be more common in certain areas, and their values can vary significantly relative to the value of all homes in the area.
The big question since the pandemic: Will workers return to the office or is remote work here to stay? Already, some commercial forecasters are surprised by the reversal of what they thought would be a lasting desire to work from home. Office spaces may once again grow in demand soon.
While tech firms may be the most connected for a remote-work world, they’re showing some eagerness to lead the way in returning to work. Tech giants like Amazon and Google are pushing for a full-time return to the office and are even expanding their offices nationwide. After more than a year into the pandemic, some tech firms are joining other companies to pull back from the long-term trend of working from home that they anticipated.