HOME PURCHASE SENTIMENT INDEX MOVES UP IN 2015

| Patrick Carmichael

Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 2.4 points to 83.2 in December, capping off its strongest year thus far, as Americans’ household income prospects bounced back to levels of three months ago. Coupled with an improved financial outlook, more consumers said they believe now is a good time to sell a home – […]

Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 2.4 points to 83.2 in December, capping off its strongest year thus far, as Americans’ household income prospects bounced back to levels of three months ago. Coupled with an improved financial outlook, more consumers said they believe now is a good time to sell a home – climbing 4 percentage points on net – although the share who believe now is a good time to buy remained flat in December.

Highlights from the Index include:
• The net share of respondents who say that it is a good time to buy a house remained flat at 35 percent.
• The net percentage of respondents who say it is a good time to sell a house rose after falling for two months in a row – rising 4 percentage points to 8 percent in December.
• The net share of respondents who say that home prices will go up rose 2 percentage points to 40 percent.
• The net share of those who say mortgage interest rates will go down continued to decrease, dropping 4 percentage points to negative 52 percent.

C.A.R. Releases 2016 California Housing Market Forecast

| Patrick Carmichael

California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to C.A.R.’s “2016 California Housing Market Forecast,” released late last week at CALIFORNIA REALTOR® EXPO in San Jose. The C.A.R. forecast sees an increase in existing home sales […]

California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to C.A.R.’s “2016 California Housing Market Forecast,” released late last week at CALIFORNIA REALTOR® EXPO in San Jose.

The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold. Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.

The average for 30-year, fixed mortgage interest rates is expected to rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300. This is the slowest rate of price appreciation in five years.

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.