Real Estate News 1/14/19

 Older American homeowners have a greater degree of financial well-being than those who do not own a home, while lower housing costs are also correlated to more positive financial well-being. This is according to a survey titled “Financial Well-being of Older Americans,” released by the Consumer Financial Protection Bureau (CFPB) Office of Financial Protection for Older Americans. According to the federal agency, the survey aims to provide “detailed information on the financial well-being scores by individual characteristics and issues of interest to people who work with older adults.” The survey seeks to qualify financial well-being across a range of topics including employment and retirement, family and specific living arrangements, financial knowledge, debt, health-related experiences and housing. In its section dedicated to the topic of housing, the survey details that older homeowners have a greater degree of financial well-being and autonomy compared with their peers who are not homeowners. However, a unifying factor among both renters and homeowners is that having low monthly housing costs is “positively associated with financial well-being.” Financial well-being is also higher among older adults who express a high level of satisfaction with their housing situation and/or community compared with those who are less satisfied. Source: Reverse Mortgage Daily

The housing stock is well below the requirements of the market in the United States, according to Freddie Mac’s report on U.S. housing supply. The continued shortage in housing supply will result in a sharp rise in home prices and rents, outpacing incomes and drastically affect household formation. The research pointed out that challenges in housing supply will continue to be an issue for years to come. The study that examined the demand side of the housing market, focused particularly on the experiences of young adults. It found that housing costs prevent young adults from forming their own households and buying a house. As a result of rising prices due to the serious mismatch between supply and demand, many young people are doubling up in shared living arrangements or living at home with their parents, the report stated. The cost of land and regulatory costs has averaged about 23 percent of total home building expenses, the report found. The report stated that opposition to new developments near homes and communities by residents also curb housing supply. In 2017, 370,000 fewer units were built in 2017 than needed to satisfy demand. The report revealed the current rate of demand at 1.62 million housing units per year—370,000 units more per year than the current rate of supply. The growth of a younger demographic, wherein 90 million residents are between 15 and 34 years old, has also added to the demand crunch. The age of the median first-time home buyer is 31 years—a group that comprises a large share of first-time home buyer population. The report also indicated the need for vacant homes in a market for sale and rent to cater to a growing population. The estimate is that the U.S. economy is about 2.5 million housing units below what is needed to match long-term demand. Source: DSNews

When it comes to upgrading a residence, the overwhelming majority of homeowners would prefer play Property Brothers rather than House Hunters, according to a recent survey. In a poll of 10,000 adults, 76 percent of respondent said they would rather use a set amount of money to upgrade their existing home rather than use it for a down payment on a new residence. Older homeowners were especially eager to fix up their homes: 87 percent of people who are 55 years or older and 91 percent of retirees cited a preference to renovate instead of moving. Renters and younger Millennials were among the groups who opted for hiring the moving van instead of upgrading their current home. Source: Zillow 

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