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Miami Herald
18-05-2025
- Business
- Miami Herald
A critical industry is slamming the economy
Anyone trying to buy a home in the last few years has found the process a struggle. Buyers and sellers must deal with: A volatile mortgage home that haven't kept pace. Don't miss the move: Subscribe to TheStreet's free daily newsletter Typically, home-sale activity should be perking up right now because families - especially families with children - like to move in the spring and summer. They want time to get children enrolled in schools. They need to learn where to shop and reestablish themselves in new neighborhoods, and they must adjust, if necessary, to changes in commuting times. Related: Major homebuilder warns of new housing problem This year started with hopes that Interest rates would slide economy would offer confidence to home owners debating whether to assume the risks of buying. Home prices would be sort of stable. In fact, 2025 has been a bit of a bummer. Rates on 30-year mortgages have mostly gone up. Prices are higher, and the economy was body-slammed by President Trump's tariff plan in April. Two monthly reports this week will offer a picture of the current situation: the National Association of Realtors' report on April existing-home sales, due Thursday, and the Commerce Department's report on new-home sales in April, due Friday. The existing home-sales report is expected to show sales running at a 4.12 million-unit annual rate, up slightly from 4 million in March. But it would be off nearly 40% from the October 2020 recent peak sales rate of 6.85 million units. The new-home sales projection is an annualized 700,000 rate, down from a 724,000 sales-rate in March. But that rate would be off some 60% from about 1 million new homes sold in 2020. The biggest conundrum home buyers face in 2025 is that home prices have climbed massively in the last 20 years. Incomes have not. The tax of building a down payment to buy a home is difficult at best for first-time buyers. And many would-be buyers are reluctant to saddle themselves with huge mortgage expenses every month with no money left over. UCG/Getty Images Let's say homeowners bought a house 25 years ago for $300,000, financing with a 15% down payment (or $45,000) and an 8% mortgage. The monthly payment at the time might have been $1,871, plus taxes, insurance and the like. Now, the owners want to sell, and the value of the home is $600,000. A 15% down payment would be $90,000 and, at current mortgage rates (about 6.9%), the monthly principal and interest payment would be roughly $3,560, plus, of course, plus taxes, insurance and the like. The first-time buyers' first reactions might be to start crying. Related: Surprising homeownership trend surges among Gen Z and Millennials Without first-time buyers, however, move-up buyers can't move on to their next homes. The situation is affecting the entire economy. It's one of those things you don't think about. But a home sale affects appliance dealers and manufacturers, hamburger joints, dry cleaners, furniture dealers, paint manufacturers, building-supply retailers, real-estate brokers, lawyers, title companies and, of course, lenders. The immediate spending a buyer might do on his house or apartment after a sale closes might total 7% to 10% of the sales price. If refurnishing the house, maybe the total hits 30% or more of the home's price. If you're doing a big renovation, the numbers explode. Small wonder the National Association of Home Builders Housing Market Index for May showed: Builder expectations dropped 8 points to 37. Above 50 says the builders are expectations for the year have of prospective buyers has tumbled. About 34% of builders reported cutting prices, up from 29% in the April report. The average price cut: 5%. Builders with the financial muscle (that is, big builders like Pulte (PHM) and D.R. Horton (DHI) ) have used incentives, usually subsidizing mortgage payments, for the first few years to make sales. The cost of the incentives hit their profits. Related: Major homebuilder warns of new housing problem The demand/need to get the country affordably housed is much bigger than that. The National Association of Realtors, admittedly full-on in favor of homeownership, estimates the entire country needs 367,000 more homes available for sale at no more than $170,000, 416,000 more homes priced $255,000 or less and 364,000 homes priced under $340,000. How you get all those homes requires land, water, utilities, roads, cash, enlightened land-use officials and good financial training for buyers and sellers. There's one other issue. People buy homes because they have jobs. But where the jobs are is where markets are most tight. The tightest markets include California, Massachusetts, Hawaii, Montana and Idaho. Logic suggests, then, that jobs need to move out to housing becomes more affordable. This past Friday's report on housing starts and building permits showed fewer single-family homes are getting started, but multi-family complexes are up a little. More Real Estate: Buffett's Berkshire has crucial advice for first-time homebuyersSuze Orman warns against huge real estate investment mistakeDave Ramsey makes bold prediction for homeownership 'American Dream' That's why the two reports coming this week matter. So does the context. The Federal Reserve boosted rates 11 times starting in 2022 to combat inflation pressures that erupted after the 2020 Covid-19 pandemic. Though the Fed cut its key federal funds rate from 5.25%-to-5.5% to 4.25%-to-4.5% in three cuts in late 2024, the residual effects of those increases are still at work on the economy and on the housing market. Publicly-traded home builders like Lennar (LEN) , KB Home KBH, Pulte and D.R. Horton have seen their stocks fall by roughly 30% since mid-September 2024 when the Fed announced its first interest-rate cut. But the stocks didn't fall because of the Fed directly. Rather, bond yields started rising, mostly because of how bond investors look at the U.S. financial position - large and growing deficits. The 10-year Treasury yield, a key determinant of mortgage rates, has risen from 3.62% in September 2024 to 4.48% as of Friday. Another way to look at the bond market: Track the iShares 20+ Year Treasury Bond ETF (TLT) . Its value rises as interest rates fall and fall when rates go up. The ETF's price fallen 14.8% since September. Related: Like it or not, the bond market rules all Appliance giant Whirlpool (WHR) has seen its shares fall 38% from their January high of $133.14. Home-improvement giant Home Depot (HD) , which reports first-quarter earnings before Tuesday's open, has seen its shares fall 10.4% from its January high. Online real-estate broker Redfin (RDFN) agreed to sell out to Rocket Companies (RKT) for $1.75 billion. Afterward, Redfin CEO Glenn Kelman said he agreed to sell the company the company was facing serious stress. "We would have been stripped for parts," he told The Puget Sound Business Journal. Rocket shares have suffered, too - down 36% from their August 2024 high, reached as it had become clear the Federal Reserve was ready to cut interest rates. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Calgary Herald
07-05-2025
- Business
- Calgary Herald
As Canadians ditch U.S. real estate, some predict a flood north
Article content As more Canadians abandon the U.S. real estate market in response to tensions between the two countries, millions of dollars could be returning to the Canadian market. Article content Canadians represent the largest share of foreign buyers in the U.S., accounting for 7,100 homes purchased in the country in 2024, primarily in vacation spots, according to the National Association of Realtors' 2024 report. Article content Article content A recent report from the RAM Development Group shows that 81 per cent of Canadians are focused on keeping their money in Canada. Thirty-four per cent of respondents suggest the change in spending habits is indefinite. Article content As Canadians who own property in the U.S. now reconsider their purchase, it could mean a serious boom for Canada's sluggish real estate market. Article content A recent report from the real estate platform Zoocasa Inc. estimates that if 100 Canadian buyers left a single U.S. state, it would result in $80 million in lost transaction volume. Article content Canadian purchases of U.S. property declined an average of 14.5 per cent annually between 2019 and 2024, according to Zoocasa, with 7,100 marking the lowest number of transactions in 15 years — even lower than the height of the COVID-19 pandemic. Article content If this trend continues, Florida alone would see a drop in transaction volume of more than US$653 million in just two years, while Arizona would experience a drop of $366 million. Article content 'Other popular vacation destinations for Canadians, including Arizona, Hawaii, California, and New York, will also lose hundreds of millions of dollars if Canadian buyers continue to retreat from the market,' the report states. Article content Article content 'While returning buyers could add to competition in already tight markets, many are likely to be retirees or snowbirds who would focus their purchases in vacation areas,' the report states. 'This could revive Ontario's cottage country, which has seen a slow start to the year.'
USA Today
06-05-2025
- Business
- USA Today
Zillow stopped showing certain home listings in May under new listing policy
Zillow stopped showing certain home listings in May under new listing policy Show Caption Hide Caption Mortgage preapproval first-time homebuyers If you're a first-time homebuyer, here's how to get a mortgage preapproved. Starting earlier this month, any property listing that was publicly marketed to consumers but not listed on the local MLS within one business day no longer appears on Zillow. This step is in line with the National Association of Realtors' Clear Cooperation Policy, which aims to prevent exclusive real estate listings and increase fairness among buyers. Real estate giant Zillow is shaking up the housing industry with new standards that the company says fall in line with new regulations aimed at transparency, but others believe they represent a power play by the nation's largest residential real estate listing service. The company announced that any property listing that has been publicly marketed to consumers — whether through yard signs, in social media posts or on a brokerage website — but not listed on the local MLS within one business day, will no longer appear on Zillow or its daughter company, Trulia. Sometimes agents will make an agreement with a seller that says they'll list the property only on their brokerage website, rather than also on the MLS. The new standards Zillow is following say it won't show those listings. Similar listings that were posted on the platform before these new standards will remain on the website. In case you missed it: As real estate listings become more private, Zillow fights back This step is in line with the National Association of Realtors' Clear Cooperation Policy, which aims to prevent property listings from being selectively marketed to certain people and to create an even playing field for all buyers. "At the core of these standards is one simple principle: A listing publicly marketed to any buyer should be marketed to every buyer. This means in the MLS, on Zillow and even on non-Zillow portals or brokerage sites," Zillow's April announcement reads. "Why is this important? Because consumers deserve fair access to listings without having to get access behind a velvet rope controlled by any one company." Several real estate brokerages, including West USA Realty, eXp Realty and NextHome, have already vowed to follow Zillow's new standards. But another prominent real estate company, criticized Zillow's new standards in an email to agent subscribers, saying listing platforms should remain neutral and that this is a "power play of epic proportion." "Zillow is asserting that they, not NAR, not your brokerage, not you the listing agent — and not even the homeowner whose house it is and is paying the commission — should decide how a listing is marketed," said Andrew Florance, founder and CEO of CoStar, the parent company of "This is not about protecting consumers — it's about protecting Zillow's ability to profit from listings by selling leads to competing agents." According to a February Zillow investor presentation, 80% of consumers go directly to Zillow for residential real estate. Zillow also attracts 64% of all traffic among users of listing apps, which is more than four times that of its closest competitor. Because of that, Zillow said this is a step in the right direction to minimize confusion among consumers and ensure fair access to real estate information for all buyers. "By requiring timely listings in the MLS and on other sites that receive MLS feeds, Zillow aims to prevent the disadvantages that arise from private listing networks and restricted inventory, which limit visibility and have an added impact for first-time buyers, lower-income groups and communities of color," the announcement reads. Maddie McGay is the real estate reporter for and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@
Washington Post
11-04-2025
- Business
- Washington Post
Homeownership assistance: How to get help from a variety of sources
Affordability challenges are rampant for home buyers due to the perfect storm of low inventory, high demand, rising prices and mortgage rates stubbornly stuck above 6 percent. For first-time buyers, accumulating the cash needed to become a homeowner can be particularly difficult. Unlike repeat buyers, they don't have a home to generate funds for the down payment and closing costs for a new home. A fortunate one-quarter of first-time buyers used a gift or loan from a relative or friend for their down payment funds in 2024, according to the National Association of Realtors' 2024 Profile of Home Buyers and Sellers. For home buyers without access to financial help from friends and family, there are thousands of programs that provide homeownership assistance from government and nonprofit organizations, employers and financial institutions. As of the fourth quarter of 2024, there were 2,466 programs available nationwide, 81 percent of which were actively funded, according to Down Payment Resource's Q4 2024 Homeownership Program Index report. 'Sometimes people think they make too much money to qualify for homeowner assistance or that they won't qualify for another reason,' said Yvette Thomas, senior director of the homeownership center at Manna Homes in D.C. 'Everyone should ask questions of their lender and their real estate agent and research home buyer programs in the location where they want to buy. In D.C., the maximum income for [the Home Purchase Assistance Program] is $180,800.' Buyers may qualify for the DC Open Doors program with an income of $200,000 or more. Nearly all home buyer assistance programs require applicants to take a home buyer education class, so Thomas recommends prospective buyers start there. The classes offered by state and local housing finance agencies are usually free or low cost and include information about how to access down payment assistance and other programs. 'At Manna, we offer a closing cost assistance grant program to housing counselor clients,' Thomas said. A local housing counselor certified by the U.S. Department of Housing and Urban Development can provide advice about home buyer assistance. 'Taking a first-time buyer class is helpful for people to build their comfort level with the process of buying a home, which is complicated,' said Karen Serfis, a HUD-approved housing counselor with the Latino Economic Development Center in Arlington, Virginia. 'The more educated you are about buying a home, the better equipped you are to ask the right questions.' State and local housing agencies typically have a list of lenders approved to offer home buyer assistance to borrowers, Serfis said. Buyers who don't have a lender can search the lists and interview lenders. 'The important thing to realize is that one size doesn't fit all — there's a lot of variety in what's available and who qualifies,' said Scott Phillips, a branch manager with Embrace Home Loans in Annapolis. 'These programs are intended for low-to-moderate income buyers, but income limits are tied to household size. Some programs are stricter than others, but the main thing is that everyone must qualify for the mortgage as well as for assistance.' Phillips recommends that prospective buyers research home buyer assistance before they look for a home because qualifying for the down payment or closing cost help can change their price range and financing options. 'If you need assistance to buy, allow yourself at least three months to go through the home buyer education and application process,' Phillips said. Prospective buyers can search for down payment assistance and other home buyer options at by location. 'Home buyer assistance for down payment and closing costs can be in the form of a loan or a grant,' said Mike McBride, president and loan officer at GenPoint Mortgage, headquartered in Reston, Virginia. 'Besides getting help from a government or nonprofit organization, most big banks and private lenders offer down payment assistance with conventional financing backed by Fannie Mae and Freddie Mac or with FHA financing.' Home buyer assistance grants do not need to be repaid. Many loans are also forgivable after the buyers have lived in a property for a certain period. Others are only repaid when the property is refinanced or sold. 'The Maryland Mortgage Program offers up to 5 percent of the sales price, but it always must be repaid,' Phillips said. 'Loans for home buyer assistance from the Federal Home Loan Bank are usually forgiven after five years. Grants from nonprofit organizations like the Wider Path Home Foundation are often forgiven immediately.' In Virginia, a 2 percent grant is available to qualified borrowers from Virginia Housing that does not to be repaid, Serfis said. 'In Arlington County, down payment assistance is available as a loan to borrowers with an income of 80 percent or less of area median income, which only needs repayment when the house is sold,' Serfis said. That income could be as high as $143,600 depending on the household size. Home buyer assistance programs can often be stacked, so if a borrower qualifies for more than one option, they may be able to accumulate funds to pay all of their down payment and closing costs, Phillips said. 'It's pretty unusual, but I was able to help one buyer in Baltimore qualify for $27,900 from four programs, which came to 17 percent of the $160,000 purchase price,' Phillips said. However, financial assistance directly from a bank typically can't be stacked the way government programs can, Serfis said. Depending on the specifics of the program, home buyer assistance funds can be used for more than just down payment and closing costs. 'Some programs allow you to use the funds to pay your buyer's agent commission or buy down your mortgage rate with extra cash at the closing,' Thomas said. Some home buyer assistance funds can be used to buy a duplex or a building with up to four units, as long as the borrower will live in one as their primary residence. Even with home buyer assistance, most buyers will need some cash for a deposit when they make an offer to buy a home, McBride said. Home buyer assistance program details and requirements vary widely and sometimes change. Many, but not all, are reserved for first-time home buyers. However, the federal definition of a first-time home buyer, which most programs follow, is anyone who has not owned a home within the past three years. 'Income limits are usually 80 percent to 100 percent of area median income on a sliding scale based on household size,' Serfis said. Typically, McBride said, state home buyer assistance programs allow for down payment and closing cost assistance with a second loan of up to 5 percent of the home price when the borrowers qualify for FHA financing. 'Lender-offered assistance is different than the government programs and is sometimes available to households with higher incomes,' McBride said. 'For example, in D.C. you may qualify for assistance even with an income of up to $214,000.' In addition to income limits, borrowers typically must meet the following eligibility criteria: 'Since some programs run out of funding midway through the year or earlier, ideally borrowers will apply for home buyer assistance as soon as they feel ready,' Thomas said. 'Some programs such as HPAP are now by lottery only, so if a prospective buyer wins that lottery, they will have six months to use the funding.' A housing counselor and homeownership education help potential home buyers prepare with a budget and savings plan as well as updated information about assistance programs. 'It can be hard to navigate these programs,' Thomas said. 'We get notified if a program is getting low on funds and we prepare our clients so they are ready to apply whenever we identify a program that could help them.' Researching home buyer programs can be a game changer when it comes to financing a home purchase. Down Payment Resource's searchable database Ask a lender to search Freddie Mac's DPA One database D.C. Department of Housing and Community Development Home Purchase Assistance Program D.C. Housing Finance Agency DC Open Doors Program Maryland Department of Housing and Community Development Maryland Mortgage Program Virginia Department of Housing and Community Development Homeownership Down Payment Assistance Program Virginia Housing Home buyer programs
New York Times
10-04-2025
- Business
- New York Times
Boomers Are Buying the Most Homes (Again)
Over the past decade, millennials have emerged as the generational group making the most home purchases in the United States. At least, most of the time. A new report reveals that their parents, the baby boomers, stormed back last year to retake the lead. According to the National Association of Realtors' 2025 Home Buyers and Sellers Generational Trends Report, baby boomers accounted for 42 percent of U.S. home sales between July 2023 and July 2024, topping millennials, who accounted for 29 percent. This was a rare exception in recent years. Besides the 2025 edition, the only annual report since 2013 in which baby boomers were shown to have bought more homes than millennials was 2023. (Each annual report is based on a survey of buyers who purchased homes from July of one year to July of the next.) In the 2025 report, baby boomers (ages 61 to 79) were followed by millennials age (ages 27 to 45), who experienced a stark one-year decline, from 38 percent of all home buyers to 29 percent. The share of Gen-Xers (ages 46 to 60) remained steady at 24 percent, while Gen Z-ers (ages 14 to 25) made up just 3 percent of buyers. How did millennials lose their rank to baby boomers? One clue is that the percentage of first-time home buyers — primarily millennials, now in their child-rearing years — dropped to a historical low, making up 24 percent of all buyers, down from 32 percent the year before. And that's no surprise: First-time buyers are 'facing limited inventory, housing affordability challenges, and having difficulty saving for a down payment,' said Brandi Snowden, director of member and consumer survey research at N.A.R. Baby boomers, by and large, simply have more cash in the bank. While 51 percent of older boomers (ages 71 to 79) and 39 percent of younger boomers (ages 61 to 70) paid for their homes with cash in 2023-24, more than 90 percent of buyers under the age of 45 (all millennials and Gen Z-ers) relied on financing and family support, according to the report. Also notable: multigenerational home buying is on the rise. The 2025 report showed that 17 percent of buyers purchased homes suitable for multigenerational living in order to cut costs, tend to aging parents, or house adult children. That was up from 14 percent a year ago.
