MORE MILLENNIALS LIVING WITH FAMILY DESPITE IMPROVED JOB MARKET

| Patrick Carmichael

Five years into the economic recovery, things are looking up for young adults in the U.S. labor market. Unemployment is down, full-time work is up, and wages have modestly rebounded. But, according to a new Pew Research Center analysis of U.S. Census Bureau data, these improvements in the labor market have not led to more […]

Five years into the economic recovery, things are looking up for young adults in the U.S. labor market. Unemployment is down, full-time work is up, and wages have modestly rebounded. But, according to a new Pew Research Center analysis of U.S. Census Bureau data, these improvements in the labor market have not led to more Millennials living apart from their families. In fact, the nation’s 18- to 34-year-olds are less likely to be living independently of their families and establishing their own households today than they were in the depths of the Great Recession.

In terms of sheer numbers, there are more young adults today than there were when the recession hit – the 18- to 34-year-old population has grown by nearly 3 million since 2007. But the number heading their own households has not increased. In the first third of 2015, about 42.2 million 18- to 34-year-olds lived independently of their families. In 2007, before the recession began, about 42.7 million adults in that age group lived independently.

The declining numbers reflect a decrease in the rate of independent living during the recovery. In 2010, 69 percent of 18- to 34-year-olds lived independently. As of the first four months of this year, only 67 percent of Millennials were living independently. Over the same time period, the share of young adults living in their parents’ homes has increased from 24 percent to 26 percent.

Meanwhile, the national unemployment rate for adults ages 18 to 34 declined to 7.7 percent in the first third of 2015, a significant recovery from the 12.4 percent who were unemployed in 2010. Other standard benchmarks also demonstrate that nationally the young adult labor market has strengthened. Both job-holding and full-time employment have increased since 2010. In addition, median weekly earnings among young adult workers are up marginally: $574 through the first four months of this year, up from their 2012 low of $547.

In spite of these positive economic trends and the growth in the 18- to 34-year-old population, there has been no uptick in the number of young adults establishing their own households. In fact, the number of young adults heading their own households is no higher in 2015 (25 million) than it was before the recession began in 2007 (25.2 million). This may have important consequences for the nation’s housing market recovery, as the growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations, and other ancillary purchases that accompany newly formed households.

TRANSUNION REPORTS 1.5 MILLION BOOMERANG BUYERS COULD RE-ENTER HOUSING MARKET IN NEXT THREE YEARS

| Patrick Carmichael

More than 1.5 million home buyers negatively impacted by the financial crisis could potentially re-enter the mortgage market in the next three years, according to a new study from TransUnion. This population of consumers negatively impacted by the financial crisis – commonly known as boomerang buyers – was defined by TransUnion as being 60+ days […]

More than 1.5 million home buyers negatively impacted by the financial crisis could potentially re-enter the mortgage market in the next three years, according to a new study from TransUnion. This population of consumers negatively impacted by the financial crisis – commonly known as boomerang buyers – was defined by TransUnion as being 60+ days delinquent on a mortgage loan, having lost a mortgage through foreclosure, short sale or other non-satisfactory closure, or having a mortgage loan modification.

TransUnion’s study found that approximately 700,000 boomerang buyers may be able to re-enter the housing market in 2015. Over the next five years, TransUnion anticipates 2.2 million boomerang buyers could re-enter the market.

The study analyzed the overall U.S. credit-active population at the end of 2006 (the end of the mortgage Bubble), the end of 2009 (the end of the Burst) and in 2014 to determine consumers’ ability to re-enter the mortgage market.

According to TransUnion’s study, 42% of the recovered consumers currently have a mortgage, while 58% of the recovered consumers have not yet re-entered the mortgage market.

NEW LOAN DISCLOSURES TILA/RESPA

| Patrick Carmichael

On August 1, the long-awaited TILA/RESPA integration will go into effect. As of that date, for most transactions, the Good Faith Estimate (GFE) and the HUD-1 will no longer be used, and instead, two new forms will appear. First, the GFE and the initial Truth-in-Lending disclosures will be combined into a new form called the […]

On August 1, the long-awaited TILA/RESPA integration will go into effect. As of that date, for most transactions, the Good Faith Estimate (GFE) and the HUD-1 will no longer be used, and instead, two new forms will appear. First, the GFE and the initial Truth-in-Lending disclosures will be combined into a new form called the Loan Estimate. Second, the HUD-1 and the final Truth-in-Lending disclosures will be combined into another new form called the Closing Disclosure.

MOST MILLENNIALS UNAWARE OF CLOSING COSTS

| Patrick Carmichael

A new survey by ClosingCorp reveals that approximately two-thirds of millennials who plan to buy a home are unaware of closing costs. The survey also found that across all adult age brackets, more than one-third of potential homeowners are “Not Very” or “Not At All” aware of closing costs. The survey of more than 1,000 […]

A new survey by ClosingCorp reveals that approximately two-thirds of millennials who plan to buy a home are unaware of closing costs. The survey also found that across all adult age brackets, more than one-third of potential homeowners are “Not Very” or “Not At All” aware of closing costs.

The survey of more than 1,000 adults also found that most people learn about closing costs from their real estate agent, or by doing their own research. In fact, millennial homeowners are more likely to learn about closing costs from their agent as opposed to a lender by a ratio of nearly two-to-one.

“This study is very interesting in that it shows millennials are more dependent on REALTORS® than previously presumed,” said Brian Benson, CEO of ClosingCorp. “We know they are more tech-savvy than their predecessors, so we believe this really highlights the complexity of a residential real estate transaction. Whether they are researching a home on their own or getting help from an interested third party, the bottom line is that people need access to the correct information, and it needs to be simple for them to understand. With the upcoming changes to the disclosure process being made by the Consumer Financial Protection Bureau this August, we as an industry should be stepping up our proactive education efforts to ensure homebuyers are fully prepared to make the most significant financial transaction of their lives.”

HOME STAGING CAN HELP SELL HOME FOR MORE

| Patrick Carmichael

Most homeowners know it is important to keep a home clean, bright, and free from clutter while it is on the market for sale. But sometimes, REALTORS® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, […]

Most homeowners know it is important to keep a home clean, bright, and free from clutter while it is on the market for sale. But sometimes, REALTORS® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the NATIONAL ASSOCIATION OF REALTORS® 2015 Profile of Home Staging.

The report, the first of its kind from NAR, found that 49 percent of surveyed REALTORS® who work with buyers believe staging usually has an effect on the buyer’s view of the home. Another 47 percent believe that staging only sometimes has an impact on a buyer’s view of the home only. Only 4 percent of REALTORS® said staging has no impact on buyer perceptions.

REALTORS® on the buyer side believe that staging makes an impact in several ways:
• Eight-one percent said staging helps buyers visualize the property as a future home
• More than 45 percent said it makes prospective buyers more willing to walk through a home they saw online
• Forty-five percent said a home decorated to a buyer’s tastes positively impacts its value;
• Ten percent of REALTORS® said a home decorated against a buyer’s tastes could negatively impact the home’s value
From the seller side, a majority of Realtors® utilize staging as a tool in at least some instances.
• Just over one-third of REALTORS® (34 percent) utilize staging on all homes
• Thirteen percent tend to stage only those homes difficult to sell
• Four percent will do staging only for higher priced homes.
• The median cost spent on staging a home is $675. Sixty-two percent of REALTORS® representing sellers say they offer home staging service to sellers, while 39 percent say the seller pays before listing the home.