Although the housing market is booming and mortgage applications increasing by 40% to a three-year high, insight from Forbes found investors may still be wary of investing in housing.
“I understand why no one wants to hear about housing. But you should want to hear about housing, because the evidence is overwhelming,” the article states.
Rebounding from the housing crash of 2008, Forbes states that 2018 was also a “terrible year for housing,” as mortgage rates rose for the first time in five years, and the U.S. Home Construction ETF dropped 32%.
The report, however, states that the market is nowhere near a bust, and that housing is still affordable for most Americans.
Unisom’s 2019 Home Affordability Report, however, stated it now takes 14 years for those making a median income to save for a 20% down payment on a median-price homes, meaning many prospective millennial homebuyers won’t achieve homeownership until their 40s.
The report states that the monthly payment needed to support a home purchase with a down payment of 20% grew by 12% between 2017 and 2018, far outpacing the growth of income during that period of 6%.
The Forbes report also downplayed the notion that millennials will not enter the housing market.
“Census Bureau figures show the number of households in America just hit an all-time high at 122 million,” the Forbes report stated.
A survey from SunTrust found that more millennials are focusing on homeownership before marriage, as the survey found that among more than 2,000 U.S. adults, nearly half of millennials (aged 22-38) who have been married say they and/or their spouse owned a home before marriage (48%), compared to only 35% of baby boomers (ages 55-73).
"People are choosing from many different paths and reaching common life milestones at a wider age span than before, changing when they decide to purchase a home," said Sherry Graziano, Mortgage Transformation Officer at SunTrust.
The survey also found that an increasing number of couples are entering marriage where both individuals own a home. According to the survey, 25% of unmarried women and 21% of unmarried men said, if faced with this decision, they would prefer to sell both places and buy a new one after getting married.