Real Estate News 3/5/19

 More young adults are still living with their parents and not branching out on their own, and that could have a long-term, negative impact to their finances, according to a new study from the Urban Institute. Researchers found there is no long-term advantage financially for young adults who live with their parents. The share of young adults aged 25 to 34 who live with their parents rose from nearly 12 percent in 2000 to 22 percent in 2017. The trend coincides with a decline in young adults’ marital rates, which during that time has fallen from 55.3 percent to 40 percent. An increase in rents and student debt also is keeping more young adults living at home, the study notes. But “this early life choice could have long-term consequences,” researchers note in the report about the delay of homeownership. “Young adults who stayed with their parents between ages 25 and 34 were less likely to form independent households and became homeowners 10 years later than those who made an earlier departure.” Young adults who stayed in their parents’ home longer did not end up buying more expensive homes or have lower housing debts later on than those young adults who moved out earlier, the study showed. Urban Institute researchers say this suggests that “living with parents does not better position young adults for homeownership, a critical source of future wealth, and may have negative long-term consequences for independent household formation.” Housing is one of the most important tools for building long-term wealth, and researchers noted that those who buy a home before age 25 receive the biggest housing investment returns over time. Source: The Urban Institute

Homeowners should have felt richer in 2018. Equity rich properties comprised 25.6 percent of U.S. properties financed in 2018, according to a newly released report from ATTOM Data Solutions, a real estate research firm. In the fourth quarter, more than 14.5 million U.S. properties were considered equity rich, where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value. That represents a new high in ATTOM Data’s records dating back to the fourth quarter of 2013. “With homeowners staying put longer, homeownership equity will most likely continue to strengthen,” says Todd Teta, chief product officer with ATTOM Data Solutions. “Those that are seriously underwater may find themselves coming up for air as they continue to pay off excessive legacy mortgages or sell. This report helps to showcase a story of West Coast markets having the highest share of equity rich homeowners versus the South and Midwest markets, who continue to have stubbornly high rates of seriously underwater homeowners.” Source: ATTOM Data Solutions

Chinese home buyers have been the top foreign buyers of residential housing in the U.S. for six consecutive years, and now they’re expanding their footprint beyond luxury markets to lower-priced tiers as well, the National Association of Realtors® reports. Chinese buyers in the U.S. have long had an appetite for million-dollar properties that they’re willing to pay all cash for. But recently, middle-class buyers from China are looking to snatch up lower-priced homes in the U.S. They’re also more often turning to home loans to finance their purchases. “The Chinese people still see the United States as a safe harbor where they can take their assets and park their money not only for their money but also for the future of their children,” Michi Olson, a real estate professional in San Francisco, told CNBC. “The Chinese are basically politically agnostic,” Olson says. “What I mean by that is even though there is a great tension between the U.S. government and Chinese, the Chinese citizen seems to be able to separate the political turmoil with the sound real estate investment.” Source: CNBC 

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