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Daily Archives: August 5, 2020
Redfin Survey: 25% of Homebuyers Are Moving – Or Moving Sooner Than Planned – Because of the Pandemic
1 in 5 Buyers Are Looking for a Designated Space to Work from Home
Seattle, WA – Aug. 5, 2020 (PRNewswire) (NASDAQ: RDFN) — Three-quarters of homebuyers who plan to buy a home within the next 12 months say the coronavirus pandemic has impacted their homebuying plans, according to a survey conducted by Redfin (www.redfin.com), the technology-powered real estate brokerage. Furthermore, 25% of homebuyers said it has caused them to move and/or speed up their moving timeline, 20% said it has caused them to delay their plans to move, and 17% are now looking for a less expensive home.
Sixteen percent of respondents said the pandemic has caused them to want to move and 15% said it has caused them to move sooner than originally planned. Six percent of respondents chose both options, which results in a total of 25% of homebuyers who said the pandemic has caused them to want to move and/or speed up their moving timeline.
“Somewhat counterintuitively, the coronavirus-driven recession is propping up the housing market,” said Redfin chief economist Daryl Fairweather. “Homebuyer demand is surging despite GDP taking a historic nosedive in the second quarter, largely because Americans value the home more than ever and are willing to prioritize housing even as they cut back on other expenses. Additionally, the Fed is using low interest rates to stimulate the economy, which is giving buyers more purchasing power and boosting home sales. But even with low rates, widespread unemployment and financial uncertainty mean not everyone who wants to buy a home is able to.”
When it comes to home preferences, the pandemic’s most common impact on homebuyers is a desire for more space, with 21% of respondents saying they want a designated area to work from home and the same share wanting more outdoor space. Additionally, 10% of respondents said they now want a bigger home, and 7% want a designated space for their children to learn from home.
Low mortgage rates and spending more time at home are driving forces for people who are moving for pandemic-related reasons. Of the people who said the pandemic is causing them to move (or move sooner), 55% said low mortgage rates are a factor in their changed plans, the most common response. Fifty-two percent said spending more time at home is a factor, and 40% said working from home is contributing to their desire to move. The average 30-year mortgage-interest rate was 2.98% when the survey was fielded, the lowest in history up until that time.
The large share of Americans looking to move as a result of the pandemic is one reason the housing market is booming despite high unemployment and an uncertain economy. Recent indicators of homebuying demand reflect the competitive landscape: Pending sales were up 12% year over year in the four weeks ending July 26; the median sale price was up 11% year over year for the week ending July 26, the biggest increase since 2014; and more than half of Redfin offers faced bidding wars for the third consecutive month in July.
“Mortgage rates are up there on the list of what’s driving people to buy,” said San Francisco Redfin agent Dylan Masella. “A lot of people are nervous about the pandemic and feel their apartment walls closing in on them. I’m working with one couple that was renting a small apartment and they were both working from the kitchen table. The combination of needing more space and low rates pushed them toward buying, and they just closed on their first house.”
The people who are delaying plans to move are most impacted by economics, with 45% of those respondents citing financial concerns as a factor in their changed plans.
“When the pandemic first hit, a few buyers canceled contracts due to economic uncertainty and concerns about potential layoffs,” said Phoenix Redfin agent Thomas Wiederstein. “I’ve also had some clients take breaks from searching because they don’t know how the economic situation is going to play out. But then there’s the other side, those who are encouraged by low mortgage rates, sitting around in their tiny apartment dreaming of the space a single-family home can offer.”
For the full report and methodology, visit https://www.redfin.com/blog/coronavirus-pandemic-drives-homebuyers-to-move.
About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer’s favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country’s #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we’ve helped them buy or sell more than 235,000 homes worth more than $115 billion.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email press@redfin.com. To view Redfin’s press center, click here.
SOURCE Redfin
Millennials Will Lead Surge in Purchase Market, According to Ellie Mae Millennial Tracker
Pleasanton, CA – Aug. 5, 2020 (PRNewswire) Millennial purchase activity is on the rise, according to the latest Ellie Mae Millennial Tracker. Purchase share – the percentage of all loans closed during the month that were purchases – grew for the second straight month, reaching 56% in June, up nine percentage points from May. This marks the highest purchase share since March 2020.
“Millennials represent the single biggest opportunity in the housing market today,” said Ellie Mae Chief Operating Officer, Joe Tyrrell. “Per U.S. Census data, there will be over 4 million millennials reaching the age of 29 to 30, each year for the next several years. That is important, because our data shows that is the average age when Millennials enter the homebuying market.”
According to Ellie Mae data, in Q2 2020, millennials were responsible for more closed purchase loans than any other generation.
“Millennials are emerging as a dominant force relative to driving the purchase market forward in the next few years,” said Tyrrell. “Our data indicates that while we’re currently seeing an upturn in millennial purchase activity, the true boom is just starting. We expect that their entry into the market, as they reach prime homebuying age, will fuel purchase transactions in 2021, 2022 and 2023.”
During June, millennial purchasing power grew as the average interest rate for all loans closed by this generation fell to a new Ellie Mae Millennial Tracker low of 3.36%. The previous low occurred just one month prior, when the average rate dropped to 3.42%.
Average time to close on all loans increased from 43 days in May to 45 days in June. Time to close for refinances jumped five days – from 44 days to 49 – during this time. Average time to close has risen month-over-month during every month since March.
“With every passing day, it becomes more apparent just how critical digital mortgage technology is to lenders right now,” said Tyrrell. “Capabilities like online applications, automatic updates and eClosing offer millennial customers the seamless digital experiences they expect while freeing up time for the human interaction necessary to answer questions or concerns they may have as they navigate the homebuying process for the first time.”
The Ellie Mae Millennial Tracker divides millennials into two groups: older millennials – borrowers between 30 and 40 years old, and younger millennials – borrowers between 21 and 29 years old.
Average interest rates were nearly identical for the two groups, with younger millennials securing an interest rate of 3.35%, on average, compared to 3.34% for older millennials. Younger millennials also had a lower average FICO score, as this sub-group gravitated toward FHA loans, which have less stringent credit requirements.
Millennials in their 20s were more likely to buy homes in June. Their share of purchase was 78%, compared to 47% for older millennials, who are more likely to already own a home and seek to refinance.
Ellie Mae Millennial Tracker – Older Millennials vs. Younger Millennials
| Older Millennials | Younger Millennials | |
| Closed Loans (Share) — All | ||
| Refinance | 52% | 21% |
| Purchase | 47% | 78% |
| Loan Type – All | ||
| FHA | 13% | 24% |
| Conventional | 84% | 72% |
| VA | 2% | 1% |
| Other | 2% | 3% |
| Time To Close (Days) — All | ||
| All | 45 | 42 |
| Refinance | 49 | 47 |
| Purchase | 42 | 40 |
| Average Interest Rates | ||
| 30 Year Note Rate — ALL | 3.34% | 3.35% |
| 30 Year Note Rate — FHA | 3.36% | 3.37% |
| 30 Year Note Rate — Conventional | 3.34% | 3.34% |
| 30 Year Note Rate — VA | 2.97% | 2.93% |
Ellie Mae®is the leading cloud-based platform provider for the mortgage finance industry.
The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80%of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass® all-in-one mortgage management solution. Given the size of this sample and Ellie Mae’s market share, it is a strong proxy of Millennial mortgage indicators across the country. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type. For more information, visit http://elliemae.com/millennial-tracker.
About the Ellie Mae Millennial Tracker
The Ellie Mae Millennial Tracker focuses on Millennial mortgage applications during specific time periods. Ellie Mae defines Millennials as applicants born between the years 1980 and 1999. New data is updated on the first Monday of every month for two months prior. The Millennial Tracker is a subset of our Origination Insight Report, which details aggregated, anonymized data pulled from Ellie Mae’s Encompass origination platform. Additional information regarding the Origination Insight Report can be found at http://elliemae.com/resources/origination-insight-reports. News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.
About Ellie Mae
Ellie Mae is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, reduce origination costs, and shorten the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.
© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.
SOURCE Ellie Mae
