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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.”

Churches are taking on the affordable housing crisis

Churches are taking a position on the frontlines of the affordable housing crisis, using their land to create new affordable housing developments. According to a report from the World Economic Forum and The Reuters Foundation, churches around Washington D.C. have begun to cobble together a new source of affordable housing supply using their land to stave off the affordable housing crisis. Churches are usually centrally located with ample parking, which means they are prime candidates for redevelopment as affordable housing projects. The success of some of these projects has begun to catch the eye of others looking for solutions to the affordability crisis, and according to the report, housing authorities in New York City, Los Angeles, Chicago, Detroit, Denver, Atlanta and Miami have expressed interest in replicating the model in their metros. "There's so much land owned by houses of worship anywhere you go in the country," David Bowers of Enterprise Community Partners, a nonprofit focused on housing solutions, told World Economic Forum. "If we could make the transfer rate 10% or 5%, that would be so much land that would suddenly become available for housing," Bowers added. As church attendance has dwindled and the affordability crisis has become more severe, turning church land into affordable has proven to help keep churches alive and house people in desperate need of an affordable home.

Rent-to-own innovator Divvy raises $30 million to fund growth

Divvy officially launched earlier this year with $7 million in funding. Caffeinated Capital and DFJ previously invested in the company. Divvy’s business model is different than traditional rent-to-own operators, some of which have been accused of predatory practices by purchasing run-down properties and convincing tenants to rent the properties by offering them the chance to buy the house in the future despite not making any repairs or improvements. The buyer typically puts 2% down on the home, then pays a monthly amount to Divvy that includes both rental and equity payments. During that time, they can also pay down debts and demonstrate enough steady income to be mortgage-ready when that three-year period ends. Divvy will also offer residents the chance to buy the home at any point during those three years should they find themselves ready to do so earlier than anticipated. According to the company, it is receiving 2,000 applications each month and buying one home per day in its current markets. And now, the company has new funding to grow its business. As part of the funding, a16z’s Alex Rampell, who leads the firm’s fintech investments, will be joining Divvy’s board. “We envision a world where everyone has a stake in the prosperity of their neighborhood and are excited to make Divvy the preferred partner for renters looking to purchase their first home,” Ma added.

Redfin: Number of homes selling above list price drops

In the four weeks ending on September 23, homes that sold above asking price dipped below 2016 levels, according to the latest data from Redfin. According to the company, 22.9% of homes sold for more than asking price, declining from 25.5% of homes the same time last year. Notably, the share of homes that sold above asking price has been steadily decreasing from June, when it was at 29%. “With home price growth slowing to 4.7% in August, and a record-high share of sellers dropping their prices, the fact that fewer homes are selling above their asking price is another indication that competition is getting less intense than it has been in recent years," Redfin Senior Economist Taylor Marr stated. The report indicates that the decline is most apparent in highly competitive markets like Seattle, Denver, Portland and the Bay Area. In Seattle, the share of homes sold above list fell to 30.3% from 50.6% the same time in 2017. Remarkably, this is the lowest the share of homes has been since 2014. Competition is tighter in affordable inland metros, including Buffalo, New York, Indianapolis and Las Vegas, according to the report. This is largely attributed to a steep decline in inventory, resulting in the share of homes selling above list price growing significantly. “Inventory pressures are easing in the hottest markets, which is welcome news for homebuyers who are increasingly able to submit an offer without competition and get bids accepted without offering above list price,” Marr concluded.

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Income Inequality Is Skyrocketing, Especially In These 5 States

The principal factors evaluated were the mean household income and median household income in 2011; their growth over the five years from 2011 to 2016; and the consequent growth in the gap between mean income and median income, which is an indicator of worsening wealth inequality. Three of the top five worst states for income inequality rank among the most populous states in the country: California, No. Massachusetts 2011 mean income-median income gap: $22,596 2016 mean income-median income gap: $26,341 Five-year increase in income gap: $3,745 | 17% Income inequality in Massachusetts is among the worst in the country. Although the 2000s dotcom bubble saw the biggest discrepancy develop between what the top 1% and what the bottom 99% earned, the income gap has only steadily gotten worse since, according to data from GOBankingRates. California 2011 mean income-median income gap: $23,516 2016 mean income-median income gap: $27,366 Five-year increase in income gap: $3,850 | 16% Income inequality in California has worsened significantly since the turn of the millennium. Washington 2011 mean income-median income gap: $17,614 2016 mean income-median income gap: $21,174 Five-year increase in income gap: $3,560 | 20% Washington is home to Seattle, the scene of a booming tech industry whose growth has fueled a population and housing surge to an unprecedented level for the state. Both the Seattle metro area and Washington state overall have a top 1% that earns more than 24-times that of the bottom 99% of households, according to recent data. The mean income, however, rose from $58,849 to $65,401 — an increase of $6,552 in average household incomes over five years versus just a $3,000 increase for median incomes. North Dakota 2011 mean income-median income gap: $14,691 2016 mean income-median income gap: $19,714 Five-year increase in income gap: $5,023 | 34% The good news for North Dakota is that its rates of growth for both mean and median household incomes rank among the highest nationally. The bad news is North Dakota has experienced the biggest growth in mean-to-median income discrepancy from 2011 to 2016: An increase of 34%, which has created a current gap of almost $20,000 between mean and median household incomes.