In the following video, from the National Association of REALTORS YouTube channel, Katie Johnson, NAR General Counsel and Senior Vice President of Member Experience, gives a broad overview of the many resources AEs can turn to at NAR to help answer questions about available programs and services, as well as policies and procedures that REALTOR® associations must follow.
National survey by Laurel Road reveals current housing and financial environment impacting purchasing decisions, despite institutional indicators
New York, NY – June 11, 2018 (PRNewswire) Ten years after the 2008 housing crisis, Americans eye the housing market with caution, as more than half (53%) of Americans who have or plan to buy a home admit they’re concerned about their ability to afford a home in the current market, according to a recent study of college-educated adults. The findings, release today by national online lender and FDIC-insured bank Laurel Road, also reveal that Americans on average believe a similar housing crash will occur in the next five years, and nearly one-fifth of respondents anticipate a crash in less than one year.
The survey examines how misconceptions and unclear options are inflating anxieties when it comes to housing market decisions. For example, the down payment is often considered one of the biggest barriers to affordability, but nearly half (46%) of Americans are currently unfamiliar with alternative down payment options. Similarly, the National Association of REALTORS® found that in 2017 that the median down payment for first-time buyers was 6% of total home price for three straight years, but nearly three in five respondents (58%) plan to put down a traditional 20% down payment, while 42% feel they would need to tap into other means, such as mortgage insurance (14%). The survey found that women in particular are potentially underestimating affordability, as they are significantly less likely than men (49% vs. 59%) to be familiar with the alternatives.
This lack of knowledge around alternative options potentially contributes to the fact that more than one-third (35%) of respondents – and 46% of millennials – do not feel confident that they could currently afford a 20% down payment. Women (45%) feel particularly less confident than men (24%), while more than two-fifths (42%) of student loan carriers do not feel confident.
A knowledge gap also surrounds current interest rates. The survey revealed that Americans think mortgage interest rates in the U.S. will reach 6%, on average, by the end of the year, while the Mortgage Bankers Association expects a more modest 4.6%. Interestingly, millennials (70%) are the most concerned about the impact of rising rates, compared to 60% of Gen Xers and 35% of boomers. Compared to boomers (78%), millennials (53%) are less likely to think it’s best that others pull the trigger and buy now, suggesting those that are more likely to be buying their first home are apprehensive about purchasing decisions.
In sum, these findings suggest consumers are concerned and cautious about housing decisions in the current market, despite the fact that interest rates are historically low. In fact, the majority of people (74%) who have bought, or plan to buy, a home would only accept an interest rate of less than 6% before they decided not to move forward with a purchase. However, a lack of historical context may contribute to this sentiment. Americans believe the highest U.S. mortgage rates have ever reached was 12.25%, on average. In reality, rates have exceeded 18% – a fact only 8% of Americans know.
“Purchasing a home is a life-changing decision, yet despite the range of resources, people often aren’t aware of the personalized options available to fit their specific situation,” said Alyssa Schaefer, Chief Marketing Officer of Laurel Road. “By arming future homebuyers with the knowledge and support needed to make an informed and confident decision, we are committed to empowering our customers during the homebuying process. Ultimately, through our research and evolving product set, our mission is to meet our consumers where they need us most, by providing an exceptional experience across each major financial milestone.”
Additional findings include:
About the Survey
The Laurel Road survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 1,000 nationally representative U.S. college-educated adults, with 50% of respondents who have a graduate degree, between April 11 and April 18, 2018, using an email invitation and an online survey.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
About Laurel Road
Laurel Road is a national online lending company and FDIC-insured bank, offering online student loan refinancing, personal lending and mortgage products as well as consumer and commercial banking services. Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with graduate and undergraduate degrees to refinance and consolidate more than $3 billion in federal and private school loans, and with our low rates borrowers have reduced their monthly payments and on average saved tens of thousands of dollars. For more information on potential savings, see laurelroad.com/student, in addition to laurelroad.com/mortgage.
Laurel Road Bank is a Connecticut banking corporation offering lending products in all 50 U.S. states, Washington, D.C. and Puerto Rico. The mortgage product is not offered in Puerto Rico. Laurel Road Bank is an Equal Housing Lender, Member FDIC. NMLS ID # 402942.
© 2018 Laurel Road Bank. All rights reserved.
Laurel Road, 1001 Post Road, Darien, CT, 06820
Media Contact:
Kwittken PR for Laurel Road
(212) 352-4651
laurelroad@kwittken.com
– In the First Quarter of 2018, 84,000 Residential Properties Regained Equity
– About 2.5 Million Mortgaged Residential Properties Are Still in Negative Equity
– An Additional 500,000 Properties Would Return to an Equity Position if Home Prices Gained Another 5 Percent
– Over the Past Four Quarters, the Average Homeowner Gained $16,300 in Home Equity
Irvine, CA – June 7th (BUSINESS WIRE) CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released the Home Equity Report for the first quarter of 2018, which shows that U.S. homeowners with mortgages (which account for roughly 63 percent of all properties) have seen their equity increase 13.3 percent year over year, representing a gain of $1.01 trillion since the first quarter of 2017.
Additionally, the average homeowner gained $16,300 in home equity between the first quarter of 2017 and the first quarter of 2018. While home equity grew nationwide, western states experienced the largest increase. Washington homeowners gained an average of approximately $44,000 in home equity, and California homeowners gained an average of approximately $51,000 in home equity (Figure 1).
From the fourth quarter of 2017 to the first quarter of 2018, the total number of mortgaged homes in negative equity decreased 3 percent to just under 2.5 million homes or 4.7 percent of all mortgaged properties. Negative equity decreased 21 percent year over year from 3.1 million homes – or 6.1 percent of all mortgaged properties – in the first quarter of 2017.
“Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity the primary driver of home equity wealth creation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018, the largest 12-month increase in four years. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Washington led all states with 12.8 percent appreciation, and its homeowners also had much larger home-equity gains than the national average.”
Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.
The national aggregate value of negative equity was approximately $284.8 billion at the end of the first quarter of 2018. This is up quarter over quarter by approximately $100 million, from $284.7 billion in the fourth quarter of 2017.
“Home equity balances continue to grow across the nation,” said Frank Martell, president and CEO of CoreLogic. “In the far Western states, equity gains are fueled by a long run in home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”
For ongoing housing trends and data, visit the CoreLogic Insights Blog: www.corelogic.com.
Methodology
The amount of equity for each property is determined by comparing the estimated current value of the property against the mortgage debt outstanding (MDO). If the MDO is greater than the estimated value, then the property is determined to be in a negative equity position. If the estimated value is greater than the MDO, then the property is determined to be in a positive equity position. The data is first generated at the property level and aggregated to higher levels of geography. CoreLogic data includes more than 50 million properties with a mortgage, which accounts for more than 95 percent of all mortgages in the U.S. CoreLogic uses public record data as the source of the MDO, which includes both first-mortgage liens and second liens, and is adjusted for amortization and home equity utilization in order to capture the true level of MDO for each property. The calculations are not based on sampling, but rather on the full data set to avoid potential adverse selection due to sampling. The current value of the property is estimated using a suite of proprietary CoreLogic valuation techniques, including valuation models and the CoreLogic Home Price Index (HPI). In August 2016, the CoreLogic HPI was enhanced to include nearly one million additional repeat sales records from proprietary data sources that provide greater coverage in home price changes nationwide. The increased coverage is particularly useful in 14 non-disclosure states. Additionally, a new modeling methodology has been added to the HPI to weight outlier pairs, ensuring increased consistency and reducing month-over-month revisions. The use of the enhanced CoreLogic HPI was implemented with the Q2 2016 Equity report. Only data for mortgaged residential properties that have a current estimated value are included. There are several states or jurisdictions where the public record, current value or mortgage data coverage is thin and have been excluded from the analysis. These instances account for fewer than 5 percent of the total U.S. population. The percentage of homeowners with a mortgage is from the 2016 American Community Survey. Fourth quarter of 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.
Source: CoreLogic
The data provided is for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact Alyson Austin at newsmedia@corelogic.com or Allyse Sanchez at corelogic@ink-co.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy depends upon these sources.
About CoreLogic
CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.
CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective owners.
Contacts
Media Contacts:
CoreLogic
Alyson Austin
Corporate Communications
(949) 214-1414
newsmedia@corelogic.com
or
INK Communications
Allyse Sanchez
(925) 548-2535
corelogic@ink-co.com