Freddie to Help Under served Owners Find Jobs

Freddie to Help Under served Owners Find Jobs

Freddie Mac announced a new partnership with a job-hunting firm called NextJob to provide employment search assistance to current and aspiring homeowners living in high-need or other poverty areas.

The program will assist homeowners who have Freddie Mac Home Possible mortgages increase their re-employment prospects following a job loss, reduced hours, or other employment challenges that threaten their ability to make their mortgage payments. The program will also  provide assistance to aspiring homeowners in their job search aimed at increasing their incomes so that they can qualify for Freddie Mac’s affordable loan offerings. Eligible borrowers will be partnered with NextJob to receive one-on-one coaching, access to “Job Talk” webinars, and NextJob’s proprietary online job search training program.

“While some parts of the country are benefiting from low unemployment rates, many rural areas continue to see limited opportunities and flattening or declining wage growth,” says Mike Dawson, vice president of single-family affordable lending strategies and initiatives at Freddie Mac. “Through our work with NextJob, and by partnering with leading local organizations on the front lines of this problem, we are capitalizing on the success of our past employment programs to help the next frontier of unmet workforce development needs. This partnership will provide a meaningful opportunity to create and sustain home ownership for families across rural America.”

In 2015, Freddie Mac had launched a homeowner re-employment pilot program with NextJob. Homeowners who took part in the pilot program “increased their job search skills by 32 percent and acquired jobs at nearly triple the normal rate of re-employment,” according to Freddie Mac. Borrowers in the program were able to acquire new employment in about four months.

The program is under Freddie Mac’s Duty to Serve initiative, which is aimed at helping distressed homeowners in under served markets.

“It can be difficult to have a direct plan of action to get you from where you are to where you want to be—this partnership will provide our members with that plan and get them to where they want to be faster,” says James Hunter, senior vice president of mortgage lending at HOPE Enterprise Corporation. “It’s not just about a job. It’s about building a career to sustain home ownership for the long run. This initiative is really groundbreaking in under served markets and we expect it to be very successful.”

Source: Freddie Mac

Gen Z Expected to Make Big Splash in Housing

Gen Z Expected to Make Big Splash in Housing

Generation Z is still mostly comprised of kids, but analysts in the housing market are already expecting big things about this generation’s future appetite for real estate.

Generation Z, born in 1997 and beyond, is a cohort of about 65 million to 75 million who are expected to start buying homes on a large scale within five to 10 years. The oldest members of Gen Z are in their early 20s. Millennials are currently the largest group of homebuyers. But Gen Z is already showing some characteristics for being real estate savvy, bargain hunters, and tech lovers, likely competing for smaller and more affordable homes, real estate experts told realtor.com®.

Gen Z is also showing signs of being more risk-averse and more financially savvy than millennials and Generation X. More than a tenth of them are already saving for retirement. Also, they’re reportedly choosing less pricey colleges so they don’t face a ton of student debt.

“They grew up in the wake of the Great Recession. They saw what their parents went through and become more fiscally conservative as a result,” says Chris Porter, chief demographer at John Burns Real Estate Consulting. “They know the value of saving and not living beyond their means. It was something ingrained in them at a very young age.”

Real estate experts predict that this generation will mostly shy away from large, expensive homes and show a preference for lower-priced, smaller homes to accommodate their likely smaller families.

“They’re not going to stretch to buy a house they can’t afford, because that goes against everything they’ve done up until this point,” Jason Dorsey, president of the Center for Generational Kinetics, told realtor.com®. “They’re going to be very worried about buying a home that might go down in value.”

Growing up watching home design shows on HGTV and DIY videos on YouTube, they may be more willing to buy fixer-uppers too, Porter notes.

Technology and social media will have a big influence on this generation’s spending habits. They’ll likely turn to social media for guidance on where to live, according to a new report from Accenture, a management consulting firm.

“Our research shows that social media has a significantly greater impact on Gen Z shopper purchasing behaviors,” according to the report. “This younger generation [is] expressing a greater willingness to buy products and services via those channels.”

Source: “Beyond Millennials: Generation Z Buyers Are Poised to Upend the Housing Market,” realtor.com® (June 14, 2018)

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Despite Rising Prices, Negative Equity Persists

Despite Rising Prices, Negative Equity Persists

Though homeowners are seeing their equity grow—properties with negative equity fell 3 percent in the first quarter of this year—2.5 million homes nationwide still are considered underwater, according to CoreLogic’s Home Equity Report. Negative equity refers to borrowers who owe more on their mortgages than their homes are worth and can occur because of a decline in a home’s value or an increase in mortgage debt.

But rising home prices are bringing more homeowners into the black. Nationwide, homeowners with a mortgage saw their equity rise 13.3 percent year over year. The average homeowner gained $16,300 in home equity between the first quarter of 2017 and the first quarter of 2018.

As such, the number of residential properties in negative equity territory has been falling over the past few years. Negative equity reached a peak of 26 percent of mortgaged properties in the fourth quarter of 2009. The national aggregate value of negative equity was about $284.8 billion at the end of the first quarter.

Source: “The Homeowner Equity Report,” CoreLogic (June 2011)

Homeowner Equity Growth Streak Continues

Homeowner Equity Growth Streak Continues

Homeowners with a mortgage saw their equity rise 13.3 percent year over year, according to CoreLogic’s Home Equity Report for the first quarter of 2018, released Thursday. The average homeowner gained $16,300 in home equity between the first quarter of 2017 and the first quarter of 2018. That is the highest growth in home equity in four years.

“Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity,” says Frank Nothaft, CoreLogic’s chief economist.

Western states saw the largest uptick in home equity. California homeowners gained $51,000 on average in home equity, while Washington homeowners saw about $44,000 on average, in equity.

“Home equity balances continue to grow across the nation,” says Frank Martell, president and CEO of CoreLogic. “In the far Western states, equity gains are fueled by a long run in the home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”

Source: “Homeowner Equity Report,” CoreLogic (June 7, 2018)

‘Low Price’ Homes Appreciating Fastest

‘Low Price’ Homes Appreciating Fastest

Gains for lower-priced homes are seeing significantly higher increases than more expensive homes, according to the latest CoreLogic Home Price Index Report.

CoreLogic researchers analyzed four individual home price tiers. The tiers were broken down into a “low price” tier that reflected homes priced at 75 percent or less of the median; “low to middle price” homes were between 75 and 100 percent of the median; “middle to moderate price” were for homes priced between 100 and 125 percent of the median; and the “high price” tier represented homes priced greater than 125 percent of the median. The lowest price tier rose 9.3 percent year over year compared with 8.5 percent for the low to middle price tier; 7.1 percent for the middle to moderate price tier; and 5.7 percent for the high price tier.

Appreciation in the low price tier began pulling ahead of the other price tiers in 2013. The five-year appreciation rate—from April 2013 to April 2018—for the low price tier was 53 percent compared with the five-year appreciation of 43 percent for the low to middle price tier; 37 percent for the middle to moderate price tier; and 29 percent for the high price tier.

All price tiers combined have risen on an annual basis every month since February 2012, CoreLogic reports. The company’s overall index is now 3.9 percent higher than its precrisis peak in April 2006. Four states have showed double-digit year-over-year increases. All of them are in the West: the state of Washington is up 12.8 percent year over year, Idaho is up 12.4 percent, Nevada increased 12.2 percent, and Utah is up 11.5 percent.

Source: “Price Gains for Lower-Priced Homes Outpace Those of Higher-Priced Homes,” CoreLogic Insights (June 5, 2018)