Younger generations are putting off marriage and opting to live with their parents longer. Fifty years ago, 76% of 26-year-olds in the U.S. lived with a spouse. Today, that has dropped to 24%, according to new research from Apartment List. “The rising cost of housing and shifting family dynamics have reconfigured the American household, and trends in who lives together are determining what types of housing will ultimately be available and affordable,” researchers note in the study.
Young adults are choosing to live with their parents into their late 20s and early 30s. The trend grew during the Great Recession as the ailing economy and ballooning student debt crisis prompted more young adults to move back home. But the trend hasn’t let up: Young adults are now 46% more likely to live with a parent than in 2007, ATTOM research shows.
For those who do branch out on their own, they’re still opting for housing arrangements that are in contrast to generations before them. For example, young adults are 32% more likely to move in with a partner before getting married than in 2007. Also, they are 19% more likely to have a non-family roommate. “Millennials today live in a much more varied range of household types than their predecessors did in young adulthood,” the researchers note.
Bathrooms are getting more technological. Many homeowners say they desire to play music in the bathroom, and they’re adding in voice assistants like Amazon’s Alexa and Google Home to make it easier to do so, new research from the National Kitchen & Bath Association shows. “Bringing voice control into the bathroom is a big request,” David VanWert, a technology integrator in Los Angeles, told Forbes.com. “Being able to ask your house to turn on music, close the shade, and turn off the lights all hands-free is exciting.”
Designers say more clients are wanting to turn their bathrooms into entertainment and information spaces. They want Wi-Fi connectivity, charging stations for their devices, built-in speakers, and screen-enabled mirrors. “Our top bathroom technology requests include lighting control, TV mirrors, waterproof TVs, and voice control,” Jamie Briesemeister, a technology integrator in St. Louis, told Forbes.com. “Digital assistants answer questions like ‘What time is it?’ and ‘What is the weather going to be like today?’ so the homeowner can stay on track and dress appropriately without having to type into a search window.”
Also, in the master bathroom, “technology that allows relaxation is key,” according to the study. Homeowners with kids aged 6 to 12 are the most likely to use technology in their master bathroom, researchers found.
Many homeowners want to use technology to improve the appearance of the space while also making their homes safer and smarter, according to the study. “We are seeing an uptick in bathroom technology requests,” Briesemeister told Forbes.com. “As more people become comfortable with what the smartphone brings, they want to use features everywhere, all while keeping a discreet aesthetic and being as hands-free as possible.”
Homeowners are showing increased demand for smart-home systems that can control security from a phone or even alert owners when a faucet is left running. They also are showing more interest in smart mirrors that, for example, can overlay an image of who is at the front door, adds VanWert. Tubs and showers that can automatically adjust water to a desired temperature are also growing in demand, as are touch-free faucets and toilets.
Pets can take a major bite out of your home’s resale value, The Wall Street Journal reports. Scratched doors, stained floors, and chewed-up furniture can prove costly for homeowners to repair.
Homeowner Lexi Methvin knows all too well how pricey pet damage can be. Since purchasing her $1.25 million home in Basalt, Colo., three years ago, she told the WSJ that she estimates she’s spent between $25,000 to $30,000 on dog-related home repairs, carpet cleaning, and preventive measures from her three dogs.
“Anyone who has seen a puppy suffer separation anxiety knows that dogs can take a costly toll on real estate,” the WSJ reports. “These expenses far exceed the cost of owning a dog, estimated by the American Society for the Prevention of Cruelty to Animals at between $737 and $1,040 a year.”
When it comes to selling a home, dog or cat damage can hurt home values. Home appraiser Susan Martins-Phipps told the WSJ that she’s visited homes that have chewed furniture, scratched floors, and smelly carpets. A home could potentially appraise up to 2% to 5% less due to pet damage, she estimates. “If a buyer has to repair all the woodwork or the dog has been chewing up the shrubbery—landscaping is expensive—the amount can exceed that,” she says.
Homeowners may not have much protection in helping to pay for the damage either.
Standard homeowners insurance policies won’t cover pet damage to a home, says Scott Holeman, a spokesman for the Insurance Information Institute.
There are some protection plans offered on furniture to cover some damage from a pet, such as for stains, chips, scratches, water marks, or other damage. Pet damage is the second leading cause of furniture claims (behind product failure), according to Safeware, one of the largest protection plan provider firms. But it’s the costliest to repair, Mike Cole, a spokesman for Safeware, told the WSJ. Some firms will charge higher premiums to owners with certain breeds, such as pit bulls.
September has proven to be the most volatile month for the 30-year fixed-rate mortgage since March. Average weekly movement on rates has fluctuated 11 basis points in that time, Freddie Mac reports. This week, mortgage rates fell after posting the largest uptick in nearly a year last week.
“With both unemployment rate and mortgage rates below 4% and near historic lows, it is no surprise that the housing market regained momentum in home sales and construction as or near decade highs,” says Sam Khater, Freddie Mac’s chief economist. “The fall housing market is poised to continue with steady gains in prices and solid sales activity.”
Freddie Mac reported the following national averages with mortgage rates for the week ending Sept. 26:
30-year fixed-rate mortgages averaged 3.64%, with an average 0.6 point, falling from last week’s 3.73% average. Last year at this time, rates averaged 4.72%.
15-year fixed-rate mortgages averaged 3.16%, with an average 0.5 point, falling from last week’s 3.21% average. A year ago, 15-year rates averaged 4.16%.
5-year hybrid adjustable-rate mortgages averaged 3.38%, with an average 0.4 point, falling from last week’s 3.49% average. A year ago, 5-year ARMs averaged 3.97%.
Lower mortgage rates are prompting more home buyers to consider new-home construction, builders say. Sales of newly built single-family homes surged in August, rising 7.1% to a seasonally adjusted annual rate of 713,000 units, the Commerce Department reported Wednesday. This marked the second time in three months that new-home sales rose above 700,000. Further, new-home sales have now jumped 18% compared to a year ago.
The latest report follows on the heels of other positive housing data released last week. Housing starts and building permits surged to a more than 12-year high in August. Home resales also increased to the highest level in 17 months, the National Association of REALTORS® reported. (Read: Home Sales Up for Second Consecutive Month and More New Homes Are Entering the Pipeline)
“This positive data caps off a month of redemption for the housing market,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Fla. “If American consumers remain in good spirits, there is no reason this positive momentum can’t continue, so long as prices remain in check and housing supply does not get critically low.”
“With job growth continuing and lower interest rates in place, builders report rising confidence levels, and this is reflected in today’s solid sales report,” says Greg Ugalde, chairman of the National Association of Home Builders.
The 30-year fixed-rate mortgage has fallen about 120 basis points compared to last year’s highs. It has averaged about 3.73% in recent weeks, according to Freddie Mac data.
The median sales price of a new home sold in August was $328,400, which is slightly up from a $321,400 median a year ago. Only 10% of sales last month were priced below $200,000, the most sought after, analysts note. The inventory of new homes for sale in August was 326,000, about a 5.5-month supply, the Commerce Department reports.
On a regional basis, new-home sales rose by the highest amounts in the West, increasing 16.5%, followed by a 6% increase in the South in August. Sales fell 5.9% in the Northeast and posted a 3% drop in the Midwest.
Retiring baby boomers are finding that downsizing is not always the answer. Empty nesters transitioning from their longtime houses are finding they still need plenty of space, The Washington Post reports.
“Older home buyers today are ‘smart-sizing’ rather than just downsizing,” Mollie Carmichael, a principal with the housing research firm Meyers Research, told The Washington Post. “Affordability is a big priority before and during retirement, so people think they need to downsize for financial security, but that’s not always true.”
Carmichael says her organization’s research has shown that 30% of people who have moved to age-restricted communities end up moving to a larger place within the community after they’ve lived there for a while. The average home size in active-adult communities—which are geared for ages 55 and older—is 1,500 to 1,800 square feet. “They just want a little extra space and yet want to stay in the neighborhood,” Carmichael says.
For example, Robin and Stefanie Wohnsigl told The Washington Post that it took them four years to find the right place for retirement. They sold an 8,000-square-foot home outside of Washington, D.C., four years ago to downsize into a 1,500-square-foot apartment. But then they realized they had downsized too much. “We wanted a backyard for our dog,” Robin Wohnsigl told The Washington Post. They have since upsized to a 3,700-square-foot single-family home.
Figuring out the type of home to buy for the preretirement-into-retirement phase can be difficult, Alison Bernstein, president and founder of Suburban Jungle, told The Washington Post. Bernstein recently opened a “ReSizer” division that is aimed at consumers in their 50s and 60s. She helps clients evaluate their financial situation and emotional goals as they try to decide whether to move to a smaller or larger home.
“The people we work with aren’t retiring yet, but they are in a ‘now what’ phase where they can choose where they want to be based on their lifestyle rather than on their kids’ schools,” Bernstein told The Washington Post. “We talk to them about what they want out of their next home and provide them with free advice and then recommend our partner real estate agents to help them find a specific home. … We take a personal inventory of what people hope to accomplish with their move, such as reducing their commute, eliminating home maintenance or downsizing to something less expensive so they can use their cash for something else.”
Paint company Sherwin-Williams has announced its pick for 2020 color of the year: a deep navy blue. The firm’s design team predicts the hue will make a bigger splash across home interiors next year, from walls to kitchen cabinets.
Sherwin-Williams’ choice, Naval SW 6244, serves as a nod to art deco influences and the “Roaring ’20s,” the company says. The color pairs best with a mix of natural materials and textures, such as marble and mixed metallic. For example, designers say, Naval SW 6244 can go with gold metallic accents that “bring warmth to navy’s boldness” or with shades of green for a “down-to-earth presence.”
“Pair Naval with natural materials, such as warm leather tones, vibrant greenery, and woven fiber rugs, to create a calming oasis in your home,” says Sue Wadden, director of color marketing at Sherwin-Williams. “Furniture and decor can be mixed and layered to build a look as minimalist or maximalist as you like.” The color can serve either as a neutral tone or a bold accent, she notes.
The use of color in interior design is changing, Wadden notes. “It’s not just changing what a space looks like anymore, but how it makes you feel. We’re predicting that the next decade in color is going to be bold. This year, we saw the return of the ‘70s, and next year, we think the vibrant energy and luxurious design of speakeasies will make a comeback. Naval merges the desire for rich, inspiring color with our yearning for relaxation and retreat. In the next 10 years, we’ll continue to move away from the omnipresent neutrals, and design will feel more personal again.”
Slower home price growth and lower mortgage rates mean home buyers are paying less on their monthly mortgage payment than a year ago. The principal and interest payment on a median-priced home—what the real estate data firm CoreLogic calls the “typical mortgage payment”—dropped in June year over year.
The U.S. median sales price in June was $235,433, up 3.3% year over year. However, the typical mortgage payment dropped 6.1%, CoreLogic reports. The decline was mostly due to decreases in mortgage rates. A year ago, the median sales price was up 5% year over year, and the typical mortgage payment surged 14% because of an increase in mortgage rates. In May, however, the typical mortgage payment posted its first annual drop in nearly three years, and home buyers started unlocking more savings.
The typical mortgage payment in June was nearly 32% lower than the all-time high of $1,287 set in June 2006.
CoreLogic forecasters predict annual gains in home prices to average about 4.5% on a monthly basis from July 2019 through June 2020. Factored in with falling mortgage rate forecasts, the typical mortgage payment likely will continue to dip and is forecasted to average a drop of 7.6% for the last few months this year, according to CoreLogic economists. “The trend is driven by the expectation that, on average, the rate on a 30-year fixed-rate mortgage during the July 2019 through June 2020 period will be about 0.7 percentage points lower than a year earlier,” researchers note at the CoreLogic Insights Blog.
Freddie Mac reported the average on a 30-year fixed-rate mortgage was 3.56% last week.
Credit scores are rising, which bodes well for mortgage seekers desiring the lowest rates. The average FICO credit score, which is a widely used measure of a person’s creditworthiness, stands at 706, a record high, according to newly released FICO data.
For comparison, in 2009 at the end of the Great Recession, the average FICO score was 686. Scores averaged 690 in 2006 during the housing bubble.
A FICO score in the range of 670 to 739 is considered “good,” and between 740 to 799 is “very good,” according to FICO.
“Significant improvement in the overall population’s credit profile has been the key driver of the 20-point increase in the national average FICO score over the past decade,” writes Ethan Dornhelm, vice president of scores and predictive analytics at FICO, in a recent blog post. “These improvements are reflective of improving consumer financial health, as would be expected during a period of economic expansion.”
A stable and growing economy with low unemployment, higher wages, and greater financial health is behind the increase in FICO scores, he notes. But Dornhelm also notes that an increase in consumer awareness of FICO scores has also been leading to the higher numbers lately.
Also, consumers who had negative information on their credit profiles from the Great Recession have since seen them removed, allowing their scores to rise. “Consumers who suffered financial misfortune during the Great Recession have over the past few years had the associated missed payments from that time period purged from their credit file,” he notes.
One of the big factors contributing to higher scores is the growth of on-time mortgage payments, Dornhelm notes. In April, just 2.8% of consumers were 90 days or more late on a mortgage payment within the last two years, compared to 7.2% in 2009.
Millennials, who are between the ages of 23 and 38, have had less time to build up a credit history so they tend to have lower credit scores than older adults. The average FICO score for a millennial in the fourth quarter of 2018 was 665 compared to baby boomers’ 732 and the silent generation’s 756, according to data from Experian.
Mortgage rates jumped dramatically this week but stand to dip some in the near future after the Federal Reserve lowered interest rates Wednesday. The 30-year fixed-rate mortgage rose to a 3.73% average—its largest week-over-week increase since October 2018. However, despite the uptick, rates remain historically low, Freddie Mac reports. So tell your buyers not to panic in the face of this latest hike.
“Despite the rise in mortgage rates, economic data improved this week—particularly housing activity, which gained momentum with a noticeable rise in purchase demand and new construction,” says Freddie Mac Chief Economist Sam Khater. “Home buyers flocked to lenders with purchase applications, which were up 15 percent from a year ago, and residential construction permits increased 12 percent from a year ago to 1.4 million—the highest level in 12 years. While there was initially a slow response to the overall lower mortgage rate environment this year, it is clear that the housing market is finally improving due to the strong labor market and low mortgage rates.”
Freddie Mac reported the following national averages with mortgage rates for the week ending Sept. 19:
30-year fixed-rate mortgages: averaged 3.73%, with an average 0.5 point, rising from last week’s 3.56% average. Last year at this time, 30-year rates averaged 4.65%.
15-year fixed-rate mortgages: averaged 3.21%, with an average 0.5 point, rising from last week’s 3.09% average. A year ago, 15-year rates averaged 4.11%.
5-year hybrid adjustable-rate mortgages: averaged 3.49%, with an average 0.4 point, up from a 3.36% average last week. A year ago, 5-year ARMs averaged 3.92%.
