Over the years we have seen some tremendous advances in technology that have allowed the world to transform into a new digital age. While it is now common to shop on apps like Amazon, consumers are seeing new opportunities to use mobile applications to manage their personal finances. A Q1 2016 Fannie Mae survey shows a spike in the amount of low and moderate income homebuyers taking an interest in mobile mortgages, with prior research suggesting an even larger appetite among higher income consumers. With this in mind, it’s fair to say that we are currently undergoing a huge shift in the market.
Big Changes Coming to the Consumer Financial Protection Bureau's Sway in the Mortgage Industry as Trump Moves into the White House.
Although it's still too early to say with certainty what Trump has in mind for the housing industry, the possibility of significant regulatory change looms – especially over issues Republican policymakers have long been fighting, including banking and financial services oversight by the CFPB. The new administration is unlikely to oppose GOP plans to correct some of the perceived deficiencies in the Dodd-Frank Act, according to a statement made by Joseph Lynyak III, a partner of Dorsey & Whitney LLP, an international law firm and specialist in the inner workings of the CFPB.
Over the years, we have been keeping an eye on the so-called ‘millennial’ generation in the United States – Individuals who have a birth date between the 1981 and 2000, whom are now between the age of 16 and 35. Over time, we have gained more information as these individuals progress through school and start to make their way into careers. The oldest among this group are now well into their mid-thirties, and many are considering a home purchase..
In a recent study by Fannie Mae Economic & Strategic Research Housing Insights, cohort analysis is applied to the American Community Survey (ACS) to analyze young adult home ownership rate change for both age groups and birth cohorts The study divides recent history into three distinct periods: 1) the end of the 2000s housing and economic expansion (2006-2008); 2) the housing market collapse (2008-2010 and 2010-2012); and 3) the early housing recovery (2012-2014).
SECOND HALF OF 2016 ECONOMIC GROWTH OUTLOOK FORESHADOW FOLLOWING BREXIT UNCERTAINTY
The second half of the year is proving not to be any different from previous months. With an earlier 2% prediction, the economic growth outlook remained unchanged. This is according to the July 2016 Economic and Housing Outlook by Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group. However, businesses are expected to face turbulence resulting from the poor production, profit deduction, and high labor costs. All these are effects of the U.S general elections and Brexit uncertainties. Also contributing to the lag of economic growth are net exports, inventory, and nonresidential investment.
Today, the sales of homes are rising, but homeownership is going down towards record lows which is a very dangerous trend. The homeownership rate stands at a mere 63.6% when seasonally adjusted for the first quarter of 2016. This is a mere 1/10th of 1% above the all-time recorded low of 63.2% which was recorded in the second quarter of 2015.
While it can be argued that the record high of 69.4% which was reached in 2004 was artificially produced thanks to generous loans, the ownership rate dipping to below 64% is very troubling for the real estate industry as a whole.