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Millennials drive homeownership rate increase in Q3

The homeownership rate increased slightly in the third quarter, driven primarily by a jump in first-time homebuyers. This is up slightly from 64.3% in the second quarter and from 63.9% in the third quarter of 2017. “Their homeownership rate is up a whopping 1.2% since Q3 2017 to 36.8%.” Homeownership among those under age 35 increased from 35.6% in the third quarter 2017 and 36.5% in the second quarter this year to 36.8% in the third quarter 2018, the report showed. Meanwhile, those ages 35 to 44 years dropped from 60% in the second quarter to 59.5% in the third quarter. This is also still up from 69.1% in the third quarter of 2017. Those ages 65 years and older saw an increase from 78% in the second quarter to 78.6% in the third quarter this year, however this is down slightly from 78.9% in the third quarter of 2017. That is more than the pace of household formation over the same period, meaning that the transition from renting to own is the more powerful driver of housing demand.” “That has also been an important and often overlooked reason for the rapid rise in home prices, as more buyers came into the market,” Liu said. These events caused the homeownership rate and home sales to diverge this quarter.” The Hispanic homeownership rate saw a quarterly drop as it fell from 46.6% in the second quarter to 46.3% in the third quarter. Among whites, the homeownership rate increased from 72.5% in the third quarter of 2017 and 72.9% in the second quarter this year to 73.1% in the third quarter of 2018. Blacks also saw an increase from last quarter, rising from 41.6% to 41.7%, however the rate dropped from last year’s 42%.

This real estate market will see almost 12% in appreciation

The report, which covers the residences of 82% of the U.S. population in 358 MSAs, also forecasts an average rise in property values of 4.5% for the 100 most populous of them, a tenth of a percent increase over last quarter's number. In the top markets the housing supply is very low, which puts project price changes at the high end of the report. The Bremerton market remains one of the strongest markets in the country, with its extremely low 1.4-month supply of homes struggling to fill the demands of its growing population. Its predicted 11.7% appreciation is six-tenths of a percent higher than the top-ranked market in our VeroFORECAST reports in first and second quarter 2018. Here are the 10 markets at the top of the VeroFORECAST for the year beginning September 1, 2018: Bremerton-Silverdale, Washington, 11.7% Boise City-Nampa, Idaho, 11.2% Las Vegas-Paradise, Nevada, 10.8% Bellingham, Washington, 10.6% Olympia, Washington, 10.3% Carson City, Nevada, 10.1% Reno-Sparks, Nevada, 10% San Francisco-Oakland-Fremont, California, 9.6% Denver-Aurora-Broomfield, Colorado, 9.5% Seattle-Tacoma-Bellevue, Washington, 9.3% We predict that both single-family residences and condos/townhomes in the Bellingham, Washington MSA will appreciate on average by 10.6% over the next 12 months. The other three or four spots have been divided each quarter among the same five states: California, with an MSA in each quarter's Top 10, and Colorado, Idaho and Oregon with an MSA in two of the three reports. With Boise City-Nampa, Idaho jumping into the Top 10’s second spot with a projected appreciation rate of 11.2%, we see an indication of Idaho's changing economy. In California, the San Francisco-Oakland-Fremont MSA has a 9.6% appreciation rate forecast, while Colorado's large Denver-Aurora-Broomfield MSA is predicted to see average real estate prices go up by 9.5%. Eric Fox is VP of Statistical and Economic Modeling at Veros Real Estate Solutions.

Housing options disappear for low-income renters

The study compares changes in the number of renters in five income levels between 2006 and 2016 with changes in the number of unites that would be affordable for people in that income range over the same period of time. However, these high-income renters are not in a crisis. Not an option for lower income families. Housing is a growing, the real struggle is for low-income renters, who did not just outpace the rate of rental unit growth – they actually saw a decrease in the number of units they can afford. Click to Enlarge “New supply is clearly not coming online at these low rent levels,” JCHS stated in its report. “Moreover, not enough existing units are filtering down to counter those lost to abandonment, higher rent levels, or conversion to higher-end condominiums. In September, the national average rent decreased, if only just slightly, for the first time in eight months. However, as interest rates make buying a home even less affordable, more and more consumers may be turning to renting as their only option. This could create even more pressure in an already competitive market. “We’ve seen supply finally start to catch up at the high end,” Schuetz said.

Average American putting less money down when buying a home

Each quarter, LendingTree compares average down payment percentages and conventional 30-year, fixed-rate purchase mortgage offer amounts across the country. According to the report, despite a decrease in payment amount, down payments as a percentage of purchase price remained relatively the same. The report indicates that the average down payment percentages for conventional 30-year, fixed-rate purchase mortgage offers rose 0.03 percentage points, inching forward from 18.02% to 18.05%. Furthermore, the average loan amount offered to potential homebuyers fell from $285,903 in Q2 to $257,749 in Q3, dropping around $28,000. Alaska’s down payment percentage was 15.41%, averaging $36,476. West Virginia’s down payment percentage was 15.44%, averaging $21,415. Mississippi’s down payment percentage was 15.78%, averaging $22,964. California’s down payment percentage was 21.44%, averaging $97,809. Hawaii’s down payment percentage was 21.32%, averaging $69,923. Delaware’s down payment percentage was 21.29%, averaging $51,678.

Worried you can’t get a mortgage in time? Ribbon will buy the home you...

The company works with homebuyers and their real estate agents to provide home sellers with a guaranteed sale, providing sellers with an all-cash offer regardless of where the buyer is in the mortgage process. Basically, if a homebuyer can’t close on their mortgage in time, instead of losing out on the house of their dreams, Ribbon will buy and reserve the home on their behalf. The buyer then rents the home from Ribbon until they get their financing in order. The program offers appeal for both sides of the deal. The company is still in its early stages, operating only in a few markets in North and South Carolina, but it has big plans for growth. Ribbon announced Thursday that it raised $225 million in a combination of debt and equity financing. The company said that it is “focused on markets where homebuyers are having the hardest time securing their new homes and face stiff local competition from investors and corporate buyers.” The company claims that its process gives homebuyers a greater than a 90% chance of having their offer accepted, while also saving thousands of dollars in cash discounts and receiving a 100% on-time closing. “Buying a home is a milestone to be celebrated and enjoyed. “For the first time, we are bringing simplicity to the real estate transaction by absorbing all risk, so buyers, sellers and Realtors can focus on the joy of the home buying and selling experience.” And Ribbon is free to homebuyers. “Unlike other valuation tools, Ribbon backs their valuations by committing to buy the home up to the Ribbon Max Value.” According to the company, which does not list its management or executives on its website, the company is led by “top technology and real estate professionals from major startups, such as LendingClub, Airbnb, Spotify, Twitter, Blue Apron, Invitation Homes and American Homes for Rent.” In this latest round of funding, the company received money from existing investors Bain Capital Ventures, Greylock, NFX, and NYCA, but the company did not provide any more financial details beyond that.

Is lack of affordability triggering an exodus from coastal markets?

As mortgage rates continue to climb in expensive coastal cities, more and more people are migrating to affordable markets, according the latest data collected from Redfin. According to Redfin’s latest migration analysis, in the third quarter of 2018 people continued to relocate from costly coastal markets like San Francisco, New York, Los Angeles and Washington, D.C. Now, cities like Atlanta, Phoenix and Sacramento are enticing thousands of potential new buyers due to their affordability. The report revealed that across the country, 25% of home searchers looked to move to a new non-coastal metro in Q3, citing affordability as a driving factor. “Rising mortgage rates are exacerbating affordability issues that have been driving people out of expensive coastal metros for the past few years,” Redfin Chief Economist Daryl Fairweather said. In these cities, the exodus of residents is larger than those looking to call them home. (The graph below shows the net outflow of residents year over year.) Throughout the past year, Sacramento, Atlanta, Phoenix, Portland and San Diego have attracted the biggest inflow of residents searching for “relatively” affordable homes and economies. In these cities, median home prices average around $150,000 below prices in metro areas with the largest net outflow, according to the report. (The graph below shows the net inflow of residents year over year.) In order to calculate net inflow and outflow, Redfin took the number of users looking to leave the metro area and subtracted the number of users looking to move to the metro area from another metro area.

Could shipping containers really solve most of housing’s problems?

Unfortunately, Michael is just one of many storms to slam the nation's coasts in 2018, and experts are expecting more by year’s end. As more of these catastrophic storms terrorize our nation, homeowners in storm prone areas are looking for new ways to keep their families and homes safe. According to an article written by Christina Scolar for CNBC, Brooklyn-based SG Blocks is leading a new wave of construction to withstand these storms: steel housing. From the article: "The challenge for people living in America is that we have a very vulnerable housing class right now — whether it's people living on limited incomes or fixed incomes. Many of them are forced to live in areas where there are persistent climate threats from the ocean, tornadoes and hurricanes,” SG Blocks CEO and chairman Paul Galvin said. According to the article, Galvin said the company is interested in housing families in steel structures rather than wood structures. SG Blocks claims container prices range from $2,500 to $5,000, and the final product, is about 10% less expensive than traditional construction. It also frees up to 50% of building time, the article stated. This could prove to be important, especially as homebuilders struggle to stay afloat amidst rising building costs. Earlier this month, data from the National Association of Home Builders/Wells Fargo Housing Market Index revealed that although homebuilder confidence increased it was only a slight change.

With existing home sales at a three-year low, are more people turning to renting?

With home prices and interest rates both on the rise, will more people look to renting as their only “affordable” option for housing? That’s more than six years of monthly price gains, and it’s putting a squeeze on housing affordability. Combine steadily rising home prices with recent record-high interest rates and now people can’t afford as much house as they could just a few months ago. Instead, Terrazas said that the “recent sluggishness” in home sales seems to be driven by decreasing demand driven by rising interest rates and rents that are finally moderating (or perhaps even slowing down). And that could keep people renting for the foreseeable future as renting appears to be more affordable than buying for many people now. “Rising interests rates coupled with increasing home prices are keeping first-time buyers out of the market, but consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory,” Yun said. A new survey from Freddie Mac shows that a whopping 78% of renters believe renting is more affordable than owning, which is up by 11 points from just six months ago. That’s despite the majority of renters (66%) reporting difficulty in affording their rent at some point during the past two years. It increased in the other major age groups as well. So even though the majority of renters have had “difficulty” paying their rent, they still view renting as a more affordable option that buying.

3 Ways Marketers Can Use Content Data to Attract Their Target Audience

In addition to audience data, which typically includes demographic and interest-based data points, there’s also content data. Determine the keywords Marketers often know the demographics and psychographics of their primary target audience. Even though some of those consumers fall outside of their typical profile, it doesn’t mean they aren’t good potential customers. Leverage relevance and recency When a consumer chooses to watch a video about a specific topic and your product or message is relevant to that topic, regardless of the demographic and psychographic make-up of that consumer, the message is going to resonate. In addition, when your message is in front of consumers at the moment they’re thinking about a topic or showing intent to purchase that type of product, it’ll receive higher recall and higher consideration for purchase. The challenge for most publishers is that they don’t have enough content data at scale, especially when it comes to video content that pertains to a specific product, brand or message. Be creative with video The fastest growing type of video watched today is video-on-demand. By strategically placing your product message in front of content that is being watched on purpose when the consumer is leaning forward and most engaged, the message will receive higher engagement and higher brand recall. Using interactive video in conjunction with a standard video ad gives the consumer a way and reason to engage with your brand and message. This not only leads to a higher engagement rate, it will also give you a more accurate read on the effectiveness of your campaign.

Multifamily volatility drags down housing starts

"Importantly, the trend in starts for single-family construction remains solid. Privately owned housing starts decreased in September to a seasonally adjusted annual rate of 1.201 million down 5.3% from August’s 1.268 million, but is still 3.7% up from the annual rate of 1.158 million in September 2017. Single-family housing starts stood at a rate of 871,000, up nearly 5% from last year. As we look ahead to October, it is likely Hurricane Michael may also impact starts for the South, though the impact should be materially less given the large markets of Jacksonville, Orlando and Miami were unscathed." Building permits, decreased from August both monthly and annually. The number of homes being built slid 0.6% from 1.249 million in August to a seasonally adjusted annual rate of 1.241 million in September, down 1% from 1.254 million one year ago. Privately owned housing completions decreased to a seasonally adjusted annual rate of 1.162 million in September, down 4.1% from August’s 1.212 million. Single-family housing completions decreased 8.7% from 924,000 in August to a rate of just 844,000 completions in September. “A slow pace of home building, home prices rising much faster than wages, and rising mortgages rates - though they are still below historical averages - are acting to depress the market," Frick continued. "If wages rise at a quick pace, and home prices increase at a slower rate - as we've seen recently - there could be a revitalized home market, but likely not for months.”

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Why Google May Not Always Be King of the Mountain

Google -- which today enjoys a cool 75 percent share of the search engine market -- has seen its reputation shaken over the past year by a series of issues. Filter bubbles Filter bubbles are the byproduct of social algorithms utilized by Google and most other search platforms. When a user enters a term into a search engine, the engine’s algorithms take into account what they know about that user’s preferences and interests based on his or her online activity. Sanjay Arora, founder and CEO of Million Short, a customizable search engine, believes, however, that filter bubbles can be popped if people are given more options and control over how they search for information online. “The world," Arora said, "needs more search engine options.” Rather than feeding results from opaque algorithms, Million Short allows users to tailor its search results, he pointed out. The results can be eye-opening for the user, Arora claimed, noting: “Every day, we get feedback from users telling us how Million Short allows them to discover content online that they couldn’t find with traditional search engines.” Fake news "Fake news" was one of the highest-profile social issues of 2017. Of course, this isn’t an easy problem to solve. If you really need that kind of privacy, the reality is that search engines -- including Google -- do retain this information for some time.” Other search platforms disagree: They've rejected the inevitability of user data tracking. Duck Duck Go, for example, built its entire platform around the idea that search engines shouldn’t track or store user data. So, these are some of the reasons why search is far from a solved problem.