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Homeownership To Rebound Among Young Adults

The number of homeowners between the ages of 25 and 34 has been falling since long before the recent housing crash and recession. Then, during the crash, the number of young American homeowners dropped by more than 300,000 each year before leveling off in 2014. The reasons for the dwindling number of young American homeowners range from shifting demographics to recent volatility in the job market. But, according to an article from Patrick Simmons of Fannie Mae’s Economic and Strategic Research Group, the long decline may be nearing an end. “Given that the young-adult population is expected to expand robustly during the second half of the decade, it would take only modest further improvements in homeownership rate trends for the number of young homeowners to return to growth,” Simmons says. Though it’s difficult to say with any certainty, Simmons believes a combination of continued job and income growth, demographics, and a strong desire to own a home could lead to an increasing number of young adults buying homes in the coming years. After many years of decline, a growing number of first-time buyers would greatly impact, not only the housing market, but the broader economy as well. More here.

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Mortgage Pros See Easier Credit Ahead

Fannie Mae’s quarterly Mortgage Lender Sentiment Survey polls mortgage professionals to get an idea of how they see the current market and the months ahead. Recently released, their fourth-quarter survey finds lenders reporting that credit standards continue to ease – which is good news for potential home buyers looking to purchase a house in the coming months. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says increased credit availability should help home buyers affected by decreasing affordability conditions. “Several factors point to constrained housing affordability in 2016, particularly for first-time home buyers, including slow single-family supply response and limited inventory of starter homes on the market, strong inflation-adjusted house price appreciation outpacing household income growth, and an upward bias in mortgage rates. However, on net, lenders told us in our fourth-quarter Mortgage Lender Sentiment Survey that they have eased and expect to continue to ease credit standards, which was a consistent trend throughout 2015,” Duncan said. “Thoughtful easing will help mitigate some of the affordability decline moving into 2016.” The percentage of lenders reporting easing expectations reached a new survey high, according to the survey’s results. More here.