Millennials will shape home design but they have to start buying!
Young Americans want homes that reflect the way life is in 2016; energy efficient, technology-driven and casual; but while they are set to shape the way homes are designed they are still slow to buy. At the International Builders’ Show in Las Vegas, Rose Quint of the National Association of Home Builders noted that around 15 per cent of 25-24 year olds were living with a parent in 2015 instead of being the next generation of first-time buyers.
Quint said that a large number of new homes bought last year were bigger homes, typically bought by those moving up rather than first-timers. She said the looser mortgage restrictions and lower interest rates had not change the dominance of existing home owners in the market.
Once millennials return to the market they are less likely to want a detached single-family home, NAHB’s research shows: "Before we see that expected pullback in square footage and price, we’re going to have to see a significant return of the first-time buyer," who is more likely to buy a smaller home at a lower price point, Quint said.
Mortgage rates reduce for third straight week
Average rates for mortgages fell for the third week in a row in the week ending Jan. 21 according to Freddie Mac’s Primary Mortgage Market Survey. 30-year FRM’s averaged 3.81 per cent, down from 3.92 per cent a week earlier; 15-year FRM’s averaged 3.10 per cent, down from 3.19 per cent; 5-year ARM’s averaged 2.91 per cent, down from 2.83 per cent.
“Weak inflation and non-stop financial market turbulence” were factors driving rates lower said Freddie Mac’s chief economist Sean Becketti. He noted that the survey was largely completed before the Treasury rally on Wednesday.
A year ago the average rates were 3.63 per cent for a 30-year FRM; 2.93 per cent for a 15-year FRM; and 2.83 per cent for a 5-year ARM.
Cheaper oil, housing adds fuel to restaurant market
The lower cost of gasoline is driving more Americans out to eat, good news for the commercial real estate
sector. In Cleveland there has been an influx of celebrity chefs adding to the city’s culinary feast and one of them, Zack Bruell who owns 10 restaurants in the city, says the region’s attractive housing market is bringing college graduates back home from the likes of California and New York. "Look at what the cost of living in Cleveland is. It's really affordable, and there is a sophistication here that exists in those markets, so you can practice your craft here and maybe buy a house, save some money and raise a family, which would be very difficult there” he told CNBC. Data from CBRE shows that downtown apartment occupancy is at 97 per cent and the commercial sector is booming as downtown neighborhoods thrive.