Blow to housing market as renters don’t plan to buy
It’s not the news that realtors and mortgage brokers want to hear but Freddie Mac says that the vast majority of renters are not ready to make a move into home ownership.
A survey has found that, even though rents keep rising and mortgage rates are still low, 70 per cent of renters believe that renting is more affordable than homeownership. More than half (55 per cent) are not planning to buy a home for at least three years.
"Renting is becoming a popular choice among many age groups," said David Brickman, executive vice president of Freddie Mac Multifamily. "While most renters still have favorable views toward homeownership and aspire to it, many choose to rent because they view it as more affordable and a better fit for their lifestyle right now."
Forty-six per cent of all respondents and 54 per cent of millennials say that renting is a good choice for now. This could be due to the same perceptions uncovered by the NAR poll we reported
yesterday, that low housing supply and difficulty getting a mortgage are weighing on renters’ minds.
New York, Los Angeles among world’s top 10 most expensive cities
In 2011 New York was only just inside the top 50 cities in the world for cost of living; in 2016 it is the 7th
place. The Economist Intelligence Unit has published its bi-annual ranking of the most expensive cities in the world, which is once again topped by Singapore.
New York has gained 15 places since the last survey and is at its highest place since 2002. Los Angeles is the only other city in the top 10, climbing 19 places.
Currency fluctuations are the main reason for the increases though with the stronger dollar and local inflation pushing New York higher relative to global peers.
The Economist’s study looks at various metrics including the cost of gasoline, bread, utility bills and rents.
Refi loans down further
The proportion of refinance mortgages has dropped for the second straight week. The Mortgage Bankers’ Association’s Weekly Mortgage Applications Survey for the week ending March 11 shows a 3.3 per cent dip in the Market Composite Index on a seasonally-adjusted basis, and down 3 per cent on an unadjusted basis.
The Refinance Index decreased 6 per cent from the previous week; the seasonally adjusted Purchase Index increased 0.3 per cent to its highest level since January while the unadjusted Purchase Index increased 1 per cent compared with the previous week and was 33 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to its lowest level since August 2015, 55.0 per cent of total applications from 56.7 per cent the previous week. ARM share decreased to 4.9 per cent; FHA
share decreased to 11.7 per cent from 12.0 per cent; VA
share decreased to 12.3 per cent from 12.6 per cent; USDA share remained unchanged from 0.8 per cent the week prior.