Thursday, October 22, 2015

Student Debt Is Not an Obstacle to Homeownership

According to a study done by Zillow.com, the only way student debt can negatively impact young professionals interested in starting a family and “settling down” to buy their first home is if that debt is combined with no degree at all.  According to the study, student debt is not an obstacle to homeownership with those students who finished with a bachelor’s degree or higher for the amount of debt they acquired.  Home buyers that are college graduates and never had to take on student loans have a higher chance (70%) of becoming a homeowner than home buyers that have student debt and at least a bachelor’s college degree, but not by much – the statistic only drops to 66% for these types of buyers.

Young professional first time buyers find student debt is not an obstacle of homeownership because a bachelors degree can mean a great job.Because of the Recession and the lack of jobs for college graduates upon completing college, many young people did not get married and start a family right away, so household formation was also a considering factor in the study done by Zillow.com.  The study seemed to indicate that people were waiting until their 30’s to have children, and the study included those couples that had actually started a family with at least one child.

High rents were also a factor as being a deterrent for young professionals to be able to buy a home.  The payment of higher rent made it impossible for them to get the larger down payment together upon trying to get financing for a conventional mortgage.  The FHA just recently reduced the percentage of down payment required for both FHA and Rural Development loans, so this factor will not be as pertinent moving forward.

The truth about young professionals becoming homeowners is that student debt is not an obstacle to homeownership, and the possession of a bachelor’s degree or higher and the acquisition of a good job after college has made it possible for these students to be able to buy a new or pre-existing home upon graduation (or later).  This is good news for the housing market as one more positive sign that the real estate market is moving in the upwards direction.

Click Here for the Source of the Information.

Wednesday, October 7, 2015

Newly Built Home Sales Rise 25.8% Year-Over-Year

Just like summer here in New Orleans, July’s housing market was hot! The new home sales activity is on its way back to normal with annual home sales already reaching 507,000. The Census Bureau and HUD reports that newly built home sales rose 5.4% from June of this year and 25.8% from July of last year.  New home inventories were reported at 218,000 in July which is the highest level that have been seen in over five years.
Newly built home sales in the Greater New Orleans increased significantly in July, 2015.This increase can also be seen in private residential construction spending where the high was at an annual rate of $387 billion in July.  This solidifies the continuing economic growth in the construction industry.  Single-family homes have pushed construction expansion 15.8% on a year-over-year basis and multifamily new home construction spending is 21.2% higher than it was reported a year ago.

Developers are not the only ones that are seeing a positive growth, the National Association of Realtors (NAR) reports increase in existing home sales.  Existing home sales increased in July 0.5% from June and 7.4% from July of last year. Completed sales (closings) were reported at the highest since February 2007.

The confidence for home buyers stems from the strengthening economy.  The Bureau of Economic Analysis reports that the global economic developments (GDP) growth is at a strong 3.7% rate.  These findings were based on several factors including investment, faster growth for consumption, government spending and trade components.

Now is the time for buyers buying new homes or existing homes to tap into the housing market. Sales are solid which makes the real estate market a stable venture. New home prices are continuing to strengthen making real estate a great investment.

Click Here for the Source of the Information.