Daily Archives: June 12, 2019

Report: Nationwide, it Takes 14 Years to Save for a Home Down Payment

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Californians, welcome to the “Quarter Century Club”: You’ll need more than 25 years to save a 20% down payment in the Golden State’s four largest cities: San Diego and San Jose (31 years), San Francisco (40 years), and Los Angeles (43 years), according to the Unison 2019 Home Affordability Report

San Francisco, CA – June 11, 2019 (PRNewswire) For millions of Americans, the dream of homeownership remains distant, according to the 2019 Home Affordability Report, published today by Unison, North America’s leading home co-investment partner. Nationwide, it takes 14 years to save for a 20% down payment on a median priced home for those earning the median income. This means that many prospective millennial homebuyers won’t achieve the American dream until well into their 40s.

In the eight least affordable cities, it will take 30 years or longer: Boston (30 years), San Jose and San Diego (31), Miami and Manhattan (36), and Honoluluand San Francisco (40). Los Angeles tops the list at 43 years.

“The way things are going, an entire generation of Americans may be approaching retirement before they can securely own a home or be forced to take on more risk than they can reasonably afford in order to realize their dream of homeownership,” said Unison CEO Thomas Sponholtz. “This is a societal and economic problem that impacts all income levels and can only be addressed through massive infrastructure investments and rapid adoption of smarter and safer non-debt-based finance and homeownership solutions.”

The report provides an in-depth look into home affordability across the country. It is based on the Unison Home Affordability Index, which estimates how many years it takes to save for a 5%, 10% or 20% down payment in hundreds of metro areas and thousands of cities, given the median salary and median home price for each market.

Additional findings of the Unison 2019 Home Affordability report include:

The City of Angels tops the list: With a median home value of $622,523 but a median income of $58,043 ($3,000 below the national median of $61,045), a typical Los Angeles resident earning the median income won’t be able to afford a home until 2061.

The Quarter Century Club: With all four of its largest cities requiring more than 25 years to save for a down payment (San Diego and San Jose, 31 years; San Francisco, 40 years; Los Angeles, 43 years) California is the founding member state. Other cities in the club are Honolulu (40), New York City (36), Miami (36), Boston (30), Washington, DC (28), and Seattle (27).

While Los Angeles leads in longest to save, San Francisco is the most expensive city: With a median home value topping $1 million – the highest in the nation – San Francisco is the most expensive city in the U.S. to purchase a home. A San Francisco resident faces a monthly mortgage payment of $5,052, requiring annual income over $200,000. From 2017 to 2018, median incomes grew more quickly than median home values, cutting the number of years it takes to save for a down payment from 42 to 40. But the income needed to support the typical monthly payment still makes San Francisco prohibitively expensive for most.

Boomtowns where costs are climbing. Booming markets are great for existing homeowners, but in many cities around the country, home price increases have led to rapid increases in monthly payments that far exceed corresponding income growth. Monthly payments are way up in Miami (26%), Las Vegas (24%), Phoenix (20%), and Tampa (17%).

Where aspiring homebuyers can catch a break: Louisville, Indianapolis, Kansas City, MO, Columbus (12 years to save for a down payment), Wichita (11 years), and Detroit (7 years) have more favorable home value to income balances, making homeownership relatively more affordable for typical wage earners.

The most out-of-reach city in the entire U.S. to buy a home is Mountain Village, CO, a ski resort nestled in the San Juanmountains next to Telluride, where it will take you until 2113 (95 years) to save a down payment.

It’s a tough time for buyers, but a great time for owners. Nationwide, the median home value increased 6% from 2017 to 2018. While this pushes the down payment and monthly payment higher for prospective buyers, it underscores the promise of an investment in residential real estate.

To view the report click here.

“Home co-investing is a non-debt alternative that should have always been available to homebuyers and homeowners at all income and home price levels. It enables people to buy their home in balance with their financial reality, risk tolerance, and life goals. It is simply a smarter and better way to buy and own a home, and Unison is proud to lead the way,” Sponholtz said.

Unison partners with institutional investors to offer homeowners and prospective homebuyers debt-free access to cash for the chance to share in a portion of their home’s change in value – up or down. Through its HomeBuyer and HomeOwner programs, users can either use the cash to supplement a down payment on a new home, or unlock equity in their existing home to pay off debt, remodel, fund a major purchase, diversify assets, or fund retirement. Since the arrangement is not a loan, there are no monthly payments and no interest. If the home depreciates, Unison shares in the loss alongside the homeowner.

To read the Unison 2019 Home Affordability Report, visit here.

About Unison

Unison is a San Francisco-based company that is pioneering a smarter, better way to buy and own your home. We are a team of financial and real estate professionals who are committed to helping homebuyers get the home they want, and homeowners finance their life needs without adding debt. We believe in a world where buying and owning a home is not a zero-sum game, and that with the right partners, everyone can win. For additional information, visit www.unison.com or follow us on Facebook, Instagram, LinkedIn, Twitter and YouTube.

Press Contact

mediadesk@unison.com

Redfin Ranks the Most Affordable Places to Get Married and Buy a Home in the Same Year

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For Newlyweds, Cleveland, Detroit and Pittsburgh are the most affordable places to have a wedding and purchase their first home

Seattle, WA – June 11, 2019 (PRNewswire) (NASDAQ: RDFN) — Cleveland, Detroit and Pittsburgh are the most affordable places where couples can throw a wedding and also cover a down payment on their first home, according to a new report from Redfin (www.redfin.com), a technology-powered real estate brokerage. In all three Midwestern metro areas, the average combined cost of a wedding and a down payment is less than $65,000, compared with the national average of more than $109,000.

San Francisco, where typical wedding and down payment costs add up to $325,000, is the most expensive place to get married and buy a home, followed by Los Angeles ($168,000) and New York ($158,000). 

To determine how much cash couples in different parts of the country would need on hand to throw a wedding and buy their first home, Redfin calculated down payment amounts in 25 metro areas, assuming a 20 percent down payment on the median list price as of April 2019. Redfin paired it with metro-level and national data on wedding costs from WeddingWire, which found the average cost of a wedding, including an engagement ring, ceremony and reception, and honeymoon to be $38,700 in 2018.

Here is the full ranking of the most affordable cities to have a wedding and purchase a home, leading up to the most expensive:

RankMetropolitan 
Divisions		Average Wedding Cost 
(weddingwire.com)		Median List 
Price		Down 
Payment 
(20% of 
Median 
List Price)		Wedding 
+ Down 
Payment
1Cleveland, OH$22,000$169,900$33,980$55,980
2Detroit, MI$29,000$139,900$27,980$56,980
3Pittsburgh, PA$27,000$189,900$37,980$64,980
4Tampa, FL$23,000$250,990$50,198$73,198
5Orlando, FL$26,000$270,340$54,068$80,068
6Hartford, CT$30,000$251,000$50,200$80,200
7Philadelphia, PA$33,000$241,000$48,200$81,200
8Phoenix, AZ$23,000$292,235$58,447$81,447
9Minneapolis, MN$23,000$295,000$59,000$82,000
10Atlanta, GA$27,000$279,900$55,980$82,980
11Charlotte, NC$27,000$289,900$57,980$84,980
12Houston, TX$33,000$279,000$55,800$88,800
13Raleigh, NC$27,000$314,500$62,900$89,900
14Chicago, IL$37,000$289,900$57,980$94,980
15Dallas, TX$30,000$325,000$65,000$95,000
16Baltimore, MD$35,000$315,000$63,000$98,000
17Sacramento, CA$26,000$439,000$87,800$113,800
18Denver, CO$28,000$439,900$87,980$115,980
19Washington, D.C.$39,000$443,000$88,600$127,600
20Seattle, WA$25,000$599,950$119,990$144,990
21Boston, MA$38,000$559,000$111,800$149,800
22San Diego, CA$27,000$639,000$127,800$154,800
23New York, NY metro$50,000$535,000$107,000$157,000
24Los Angeles, CA$33,000$679,000$135,800$168,800
25San Francisco, CA$40,0001,425,000$285,000$325,000
National/Combined Markets Average$38,700$308,000$79,619$109,939

In expensive coastal metros including Seattle, Boston and San Diego, a down payment alone costs over $100,000, without factoring in a wedding. For couples in these places with visions of a dream wedding, it might be worth spending the money on the party, considering it is roughly half the cost of a down payment, which may be far less attainable.

Even in relatively affordable housing markets like Phoenix, Minneapolis or Atlanta, a typical down payment is more than twice as much as an average wedding. If saving for a home is a priority of residents in these areas, skipping the big day and eloping to city hall might be a worthwhile strategy.

To read the full report, including personal stories from Redfin employees currently navigating the wedding and home buying process, please visit: https://www.redfin.com/blog/choosing-between-wedding-and-down-payment.

About Redfin 
Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. and Canada. The company has closed more than $85 billion in home sales.

National Association of Realtors® Files Amicus Brief Defending Labor Department’s AHP Rule

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WASHINGTON (June 10, 2019 (nar.realtor) The National Association of Realtors® filed an amicus brief(link is external) in defense of the Department of Labor’s (DOL) Association Health Plan rule late last week. Amicus briefs are legal documents filed in appellate court cases by non-litigants that have a strong interest in the subject matter in question. Earlier this year, a federal court ruled that provisions of the DOL’s rule were unlawful, a ruling adversely impacting Realtors® seeking more cost effective and comprehensive health insurance solutions through AHP options. The Department of Justice is appealing the ruling and NAR’s amicus brief submission supports the DOJ’s appeal.

“Passage of the Patient Protection and Affordable Care Act resulted in significant regulatory changes to the individual insurance market, some of which have benefited Realtors®,” the brief reads. “However, ACA changes have also resulted in significant increases in health care costs, leaving many individuals to forgo coverage, which jeopardizes the health, safety and financial stability of their families and others.”

NAR’s amicus brief discusses DOL’s lawful authority to expand access to AHPs by interpreting the working owner provisions to promote flexibility while not conflicting with existing statutes. NAR also describes the comprehensiveness of AHP coverage and the many successful plans already in place that are resulting in significant savings and benefits to many working owners.

“NAR is committed to ensuring our members can secure the health insurance coverage they need to provide for themselves and their families,” said NAR President John Smaby, a second generation Realtor® from Edina, Minnesota. “However, affordability concerns continue to serve as a barrier to securing sufficient affordable, quality insurance options for America’s 1.3 million Realtors®.

NAR was joined in this amicus brief by the five Realtor® associations offering AHPs to members, including the Baldwin County Association of Realtors® in Alabama; the Greater Las Vegas Association of Realtors®, the Kansas City Regional Association of Realtors®, the Nevada Realtors®, and the Tennessee Realtors®. To date, over 3,000 Realtors® and their families have found cost-effective health insurance solutions through these state and local AHP options.

Many more Realtor® associations are also exploring AHP options but have been delayed due to this litigation uncertainty.

As of today, over 40 other state and local Realtor® associations and counting have also agreed to join the Amicus in support of the litigation.

If the courts final ruling is adverse and pending any appeals, independent contractors may lose the ability to access insurance coverage through an AHP, sacrificing valuable savings on premiums, and broader network access with more comprehensive benefits. Overall, AHP plans have proven to have lower cost options and better overall coverage, leading countless sole proprietors and small employers alike to purchase association health plans over the past year.

A member of the Nevada Realtors® Association who currently enrolled in an AHP with his wife, recently reported saving over $500 per month from his previous ACA plan. “My wife paid the penalty for four years and had no coverage until we got Obamacare last year,” he wrote. “I am diabetic, so health coverage is not an option for me as I have many doctor visits and high prescription costs. When we got on the AHP this year, we upgraded our coverage and now have a deductible, which is much lower and the overall coverage is much better. In other words, we went from the worst plan under Obamacare to the best plan under Hometown Health for Northern Nevada and still saved money on the monthly costs.”

“While NAR continues to explore and tackle barriers to a national AHP insurance option, we are learning from the many successes being implemented by state and local Realtor® associations,” Smaby continued. “These initial programs are helping us ensure our members and their families can secure these effective, affordable health insurance options moving forward. We must continue to protect the AHP options that so many Realtors® have come to rely on for coverage and so many more deserve access to, especially as health care costs continue to rise across the country.”

NAR is a founding member of the Coalition to Protect and Promote Association Health Plans, which also submitted an amicus brief(link is external) in this case. NAR recently created an updated map(link is external) showing the state-by-state regulatory environment as it applies to working owners, which also links to a detailed chart(link is external) outlining specific actions by individual states. Twelve attorney generals are party to the suit filed against DOL, challenging the AHP rule, including New York, Massachusetts, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia and Washington, along with the District of Columbia.

The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.