The oldest members of Generation Z – roughly defined as those born between 1997 and 2012 – have reached early adulthood. They’re not quite the age of the average first-time home buyer but they’re definitely at an age when they’re considering whether or not they might want to buy a home in the future. So how do these young Americans feel about homeownership? Is it as important to them as it has been to previous generations? Well, according to one recent survey, it is. In fact, 65 percent of respondents said it was personally important to them to own a home. Among them, nearly 90 percent said they felt it was an important part of building wealth, with respondents who want to buy in the future citing financial security and stability as the top two reasons to buy. In other words, Generation Z clearly sees the enduring benefits of homeownership and views it as key to their financial future. A good portion of them have already gotten started. Census data shows 25 percent of Americans under 25 currently own their own home. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved higher last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA’s vice president and deputy chief economist, says there were a few reasons for the increase. “Treasury yields rates rose last week and mortgage rates followed suit, due to a combination of the Treasury’s funding announcement and the downgrading of the U.S. government debt rating,” Kan said. Higher rates led to a slowing of mortgage demand, including a 3 percent decline in the number of prospective home buyers applying for loans to buy homes. Purchase loan activity is now 27 percent below where it was last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Fannie Mae’s Home Purchase Sentiment Index measures how Americans feel about their personal financial situation, the overall economy, and the housing market. Based on a monthly survey, the index asks respondents for their perception of home prices and mortgage rates, whether they feel secure in their job and finances, and whether they think it’s a good time to buy or sell a home. July’s results show Americans feeling more confident in their personal financial situation, with the share saying they aren’t concerned about losing their job up 6 percent and 71 percent saying their household income is steady. Housing market measures, on the other hand, show Americans are still concerned about affordability. “While consumers are reporting confidence in the components related to their personal financial situations, it’s unlikely we’ll see housing sentiment catch up to other broader economic confidence measures until there is meaningful improvement to home purchase affordability,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, says. Still, a majority of survey participants say it’s a good time to sell a house and a rising number see mortgage rates decreasing over the next year. (source)

There are a number of reasons buying a home has gotten more expensive over the past few years. First, the lack of homes for sale caused home prices to skyrocket, then the Federal Reserve began raising interest rates to help battle inflation. As a result, mortgage rates climbed higher and affordability became more challenging – especially for first-time home buyers. First-time buyers, because they don’t have the proceeds of a home’s sale to help them cover the upfront costs of buying a home, have to come up with a down payment and the money to cover closing costs mostly from scratch. That can be difficult in an evolving market. These days, especially so. In fact, according to one recent analysis, a first-time home buyer needs to earn an average of $64,500 to afford the typical starter home, which is now selling for $243,000. That doesn’t make homeownership unattainable, but it does mean first-time buyers need to be prepared with plenty of savings, if they hope to succeed in today’s market. (source)

As a homeowner, your mortgage payment will likely be among your biggest monthly bills. That’s why it’s a good idea for prospective home buyers to know what the typical mortgage payment looks like these days, and whether they’re getting more or less affordable. The Mortgage Bankers Association tracks median mortgage payments each month. Its Purchase Applications Payment Index – which is based on applications for loans to buy homes – can give home buyers a good read on overall affordability conditions and also what to expect when they find a house to buy. According to the most recent results, the median mortgage payment was essentially unchanged in June, falling to $2,162 from $2,165. For borrowers applying for lower-payment mortgages, payments dropped to $1,459. Edward Seiler, MBA’s associate vice president, housing economics, and executive director, Research Institute for Housing America, says affordability is still challenging but stabilizing prices may help buyers. “The median purchase application amount fell from $330,000 to $326,000 in June, which is one positive sign that home prices are stabilizing,” Seiler said. “An ongoing combination of flattening home prices and lower rates would offer reprieve for households who are looking to buy a home.” (source)

After the pandemic began in March 2020, there was an increase in the number of home shoppers looking to move to a new area. Remote work, affordability conditions, and a desire for more space all contributed to buyers’ desire to move further from home. But what about now? It’s been three years. Are Americans still looking to move away? According to the National Association of Realtors’ consumer website, they are. In fact, the website’s Q2 Cross-Market Demand Report shows 60 percent of listing views from the top 100 metros went to homes located outside the shopper’s current metro area. That’s up almost 1 percent from the first quarter and 4.1 percent year-over-year. Jiayi Xu, an economist for the site, says affordability is the main motivator pushing today’s buyers to expand their house hunt. “Housing affordability isn’t likely to improve anytime soon, so it’s not surprising to see that Americans are on the move and increasingly searching for homes in more affordable areas of the country where they can stretch their housing dollars further,” Xu said. “Sellers are much more likely to see interest from out-of-towners than in years past, and from where that interest is coming might be the most surprising.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up across most loan categories, including 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. Jumbo loans saw a slight decline. Joel Kan, MBA’s vice president and deputy chief economist, says the increases slowed demand for mortgage applications week-over-week. “Mortgage rates edged higher last week … leading to another decline in overall applications,” Kan said. “The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates … are crimping affordability for many potential home buyers.” Overall, mortgage application demand – including purchase and refinance activity – was down 3 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)