In the second quarter of 2018, fewer people plan to buy a home in the next 12 months than recorded in previous quarters, according to the National Association of Builders Housing Trends Report.
Just 14 percent of adults are expected to buy compared to 17 percent who planned to do so last quarter and 24 percent in quarter four of 2017. For 61 percent of those planning to by within the next year, it will be their first time buying a home.
The study suggests that millennials are the most likely generation to plan on buying in the next 12 months while seniors were the least likely. More than two out of three millennials (77 percent) who plan to own a home are about to do so for the first time.
Nearly 40 percent of prospective buyers prefer an existing home, about 20 percent are looking for a newly built home, and 40 percent reported are open to either.
In other real estate news:
- While the overall homeownership rate posted a slight gain of 0.1 percent to 64.3 percent in the second quarter, both black and Hispanic homeownership fell, according to a report from the U.S. Census Bureau. Since last quarter, black homeownership went from 42.2 percent to 42.3 percent while Hispanic the Hispanic rate fell from 48.4 percent to 46.6 percent. But, the homeownership rates of Asian, Native Hawaiian and Pacific Islanders grew, from 57.3 percent last quarter to 58 percent.
- Satisfaction for mortgage servicer remains fairly similar to the past two years despite extensive investments by mortgage originators into new digital services, according to the J.D. Power 2018 Primary Mortgage Servicer Satisfaction Study. On a 1,000-point scale, satisfaction total at 758 in 2018, while those using mobile had the highest levels of satisfaction. “The mortgage industry has made bold investments in new technology but servicing still has a long way to go,” said Craig Martin, Senior Director of the Mortgage Practice at J.D. Power. “With only 20 percent of mortgage customers utilizing mobile technology—which is 2 percent below 2016—availability and adoption of these services has been slow in coming. Customer expectations are increasing, often influenced by their day-to-day experiences, but servicing is not keeping up.”
- A study by HousingWire and Maxwell also found that digital mortgages are becoming increasingly common among mortgage lenders, but the integration of this technology comes at an unexpected cost. The study suggests that 57 percent of lenders said implementing their technology took longer than expected. It actually takes roughly three to six months for companies with 21 to 50 employees and about one to three months for companies with 51 to 100 employees. Although it’s not timely, only 14 percent of lenders reported that they do not have a digital mortgage while 36 percent do not use a borrower portal.