Bedford NY Homes by Robert Paul Realtor: October 2015

Wednesday, October 14, 2015

Rural Communities Attract More Buyers | Pound Ridge Real Estate

Purchase mortgages grew at a faster rate in rural communities than in the rest of the nation last year and rural borrowers paid significantly higher rates of interest than urban or suburban home buyers in 2014, according to an analysis of recently released data from the Home Mortgage Disclosure Act (HMDA) by Keith Wiley, senior research associate at the Housing Assistance Council.

While all mortgages declined, the number of loans for home purchases increased both nationally and in rural communities in 2014. Rural home purchase originations grew by almost 7 percent, higher than the national increase in home purchases, which increased 4 percent over 2013. However, rural home purchase loan volume (440,489) still remained less than half of what it was before the Great Recession in 2006 (926,156).

However, rural home buyers paid higher interest rates mortgages last year than urban or suburban buyers. Approximately 15 percent of all rural home purchase loans were classified as high cost in 2014, up from 11 percent for calendar year 2013. The rate of rural high cost lending is approximately four and three percentage points higher than the rate for suburban and urban loans. High cost mortgages with interest rates that are significantly higher than the prime rates charged for similar loans (1.5 percentage points higher for a first lien and 3.5 percentage points higher for a second lien).

One reason rural loans average higher rates of interest than loans in other regions may be that high cost loans are particularly prevalent in manufactured home lending, a market segment important to rural communities. In 2014, nearly two-thirds of rural manufactured home purchase loans were classified as high cost loans — six times the high cost rate for single family home loans. Manufactured homes are largely financed with personal property, or “chattel,” loans which frequently carry higher interest rates than conventional home purchase mortgages. Approximately half of all manufactured home loans occurred in rural communities which elevates the overall high cost lending levels in rural areas.

United States MBA Mortgage Applications down | Bedford Corners Real Estate

United States MBA Mortgage Applications | 2007-2015 | Data | Chart

Friday, October 2, 2015

Do Millennial Buyers Really Prefer the City? | Chappaqua Real Estate

A study by Federal Reserve economists Elora Raymond and Jessica Dill found that it’s true that first-time homebuyers prefer to buy in the city. They tend to live closer city centers than existing homeowners who are burying a new home. First-timers buy within an average of 5.8 to 5.9 miles from city centers whereas existing owners prefer 6 to y25 miles.

Where millennials settle could determine whether cities continue to grow, what transportation infrastructure expenditures should be, and whether homebuilders should focus their efforts on multifamily housing in urban locations or traditional single-family homes in the suburbs.

A number of observers have speculated whether the recent surge in millennials living in cities represents a change in preferences or whether it’s simply an artifact of financial constraints—tighter underwriting standards, weak income growth, or larger student debt. Nielsen’s survey of young adults found that millennials prefer the lifestyle afforded by dense urban environments, but the National Association of Homebuilder’s survey of young homebuyers finds that just 10 percent would prefer to live in the city while a whopping 66 percent want to live in the suburbs. Setting preferences aside, others debate whether millennials really are moving to the city. While recent data confirm that young people are moving to the cities at much higher rates than in the 1990s, it’s also true that the raw majority of young people choose the suburbs over the city

Beginning in 2003, younger first-time homebuyers trended towards more central locations. During the 2007–09 recession, the spread between older and younger first-time homebuyers collapsed. After the recession, the spread widened again. It’s difficult to say whether the shift in purchase patterns is the result of financial constraints or changing preferences, but the tendency appears to be for newer and younger homeowners to purchase homes closer to the city center.

The economists, based in the Atlanta Federal Reserve Bank, assembled a data set that allowed them to identify first-time millennial homebuyers and the census tracts where they bought their first homes.

Using this data, they asked if first-time millennial homebuyers are more likely to live near the city center than either existing homeowners or older first-time homebuyers. Finally, they looked at how other factors like creditworthiness and student debt levels appear to influence this decision.

Below, they charted the median distance from the central business district (CBD) of first-time and existing homeowners by age bracket from the years 2001 to 2014. We find that existing homeowners tend to live, on average, 6.3 to 6.5 miles from the city center.

.What this chart cannot tell us is whether the trend that has younger people living closer to the city center reflects uniform preferences or whether this is an artifact of stronger economic growth in denser cities. In other words, is this trend the result of strong home buying in compact cities and weak sales in sprawling metropolises (that is, between cities), or is it the result of all buyers nationwide choosing to move closer to the city center (that is, within cities)?