Millennial Women Hold Better Credit Scores than Men

But trail behind in homeownership rates

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A new study from LendingTree shows Millennial women are better than men at improving their credit score.

Millennial women held an average credit score of 666, higher than men’s credit scores of 661, but they don’t know it. The study shows among Millennials, fewer women than men know their credit score, at 76% versus 82% respectively.

But it comes as little surprise that women have higher credit scores, as a study last year from ATTOM Data Solutions showed women are better than men at paying their mortgage.

Women also have higher levels of debt than men. The average amount of total debt for women came in at $68,834, up from the amount of men’s debt at $53,017, the study on Millennials showed. Here is a breakdown on the levels of different categories of debt:

Credit card debt

Men: $2,700

Women: $3,528

Student debt

Men: $8,500

Women: $14,758

Perhaps Millennial men have less debt due to their higher incomes, giving them more ability to repay their loans, or less necessity to take out loans. The study showed 57.29% of men have an annual income of more than $50,000 compared to 42.11% of women.

So while women have higher credit scores than men, perhaps a combination of men’s lower debt levels and their higher incomes, or even personal preferences, led to higher homeownership rates among Millennial men. According to the study, 56% of men own a home, compared to 44% of women.

The study didn’t cover how many women versus men applied for mortgages.

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20 Tips for Preparing Your House for Sale

KCM Crew, August 5th, 2017

20 Tips for Preparing Your House for Sale [INFOGRAPHIC] | MyKCM

Some Highlights:

  • When listing your house for sale your top goal will be to get the home sold for the best price possible!
  • There are many small projects that you can do to ensure this happens!
  • Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!
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Mortgage Rates Hold Steady as Markets Remain Cautious

30-year mortgage increases one basis point

House key

Mortgage rates held steady this week, increasing only one basis point as the markets remained cautious.

“The 10-year Treasury yield was relatively flat this week, as was the 30-year mortgage rate which rose one basis point to 3.93%,” Freddie Mac Chief Economist Sean Becketti said.

Click to Enlarge


(Source: Freddie Mac)

The 30-year fixed-rate mortgage increased to 3.93% for the week ending Aug. 3, 2017. This is up one basis point from last week’s 3.92% and up from last year’s 3.43%.

However, the 15-year FRM decreased to 3.18%, down from last week’s 3.2%. This is still up from last year’s 2.74%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage also decreased, hitting 3.15%. This is down from 3.18% last week but up from 2.73% last year.

“Despite a strong advance estimate for second quarter GDP, markets are erring on the side of caution,” Becketti said.

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Millennial Homeownership Rate Increases

KCM Crew, August 3rd, 2017

Millennial Homeownership Rate Increases | MyKCMRecent headlines exclaimed the homeownership rate, as reported by the Census Bureau, rose again in the second quarter of 2017. What didn’t get much attention in the reports is that the homeownership rate for American households under the age of 35 increased a full percentage point from last quarter’s 34.3% to 35.3%. Millennials proved to have the highest increase of any age group.

This came as a surprise to some considering Millennials have come to be known as the “renter” generation. However, a new study by First American6 Trends Poised to Reshape Homeownership Demandrevealed reasons why homeownership numbers will continue to increase for Millennials.

Millennials are the most educated generation in the U.S.

Why does that matter? First American explains:

“Our model shows that, all other factors being equal, the likelihood of homeownership increases by 3 percent for those that earn a bachelor’s degree over those with a high school degree. The likelihood of homeownership jumps another 3 percent for those that earn a graduate degree.”

The more educated, the better the likelihood for homeownership. And, as we mentioned: Millennials are the most educated generation in the U.S.

Homes & marriage go together

Marriage is a key determinate in homeownership. According to an analysis by First American, the homeownership rate is 30% higher among married couples compared to non-married households.

Millennials have put off marriage in the pursuit of higher education. As this group ages, more and more will marry and purchase a home.

Parents buy houses

According to the study:

“The homeownership rate is 1.7% higher for households with one or two children compared to households with no children, and it is 5.4 percent higher for households with three or more children.”

The report goes on to say that as Millennials grow older there may be an increase in not just marriage but also in married couples with children. That will probably also create a “corresponding” increase in homeownership demand.

Wages and the economy

The study goes on to explain that recent gains in income growth and a strengthening economy will also help all generations (including Millennials) be more willing and able to purchase a new home.

Bottom Line

We guess the time has come to announce – Here come the Millennials!!

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Do Your Future Plans include a Move? What’s Stopping you from Listing Now?

KCM Crew, August 2nd, 2017

Do Your Future Plans Include a Move? What's Stopping You from Listing Now? | MyKCMAre you an empty-nester? Do you want to retire where you are, or does a vacation destination sound more your style? Are you close to retirement and not ready to move yet, but living in a home that is too big in size and maintenance needs?

How can you line up your current needs with your goals and dreams for the future? The answer for many might be the equity you have in your house.

According to the latest Equity Report from CoreLogic, the average homeowner in the United States gained $14,000 in equity over the course of the last year. On the West Coast, homeowners gained twice that amount, with homeowners in Washington gaining an average of $38,000!

Do you know how much your home has appreciated over the last year?

Many homeowners would be able to easily sell their current house and use the profits from that sale to purchase a condo nearby in order to continue working while eliminating some of the daily maintenance of owning a house (ex. lawn care, snow removal).

With the additional cash gained from the sale of the home, you could put down a sizeable down payment on a vacation/retirement home in the location that you would like to eventually retire to. While you will not yet be able to live there full-time, you can rent out your property during peak vacation times and pay off your mortgage faster.

Purchasing your retirement home now will allow you to take full advantage of today’s seller’s market, allow you to cash in on the equity you have already built, and take comfort in knowing that a plan is in place for a smooth transition into retirement.

Bottom Line

There are many reasons to relocate in retirement, including a change in climate, proximity to family & grandchildren, and so much more. What are the reasons you want to move? Are the reasons to stay more important? Let’s get together to discuss your current equity situation and the options available for you, today!

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The Hurdles of Housing Inventory, August 2nd, 2017

It’s a shortage of skilled labor and higher development costs that are keeping construction starts low and housing inventory strapped, according to new data from Freddie Mac. According to the GSE, the number of open construction jobs has increased steadily since the housing crisis nearly a decade ago.

According to Freddie, the housing market has largely recovered since the Great Recession—with one holdout: inventory.

“A decade after the Great Recession, the housing market is rebounding,” Freddie Mac reported. “House prices today are higher than they were at the peak in the summer of 2006, near-record-low mortgage rates have boosted housing demand, and sales volume is robust. The spoiler is the lean inventory of houses for sale.”

Currently, the nation has just a five-month supply of homes and, according to Freddie, “residential construction is not doing much to fill the gap.”

“With home prices rising and housing demand high, we’d expect builders to increase production,” Freddie reported. “Instead, they are providing less housing (relative to population) than in the past. The main reasons appear to be a shortage of skilled labor and an increase in development costs.

The labor shortage is due to four factors, according to Freddie’s data: layoffs during the housing crisis, the difficulty the construction sector has in attracting young workers, drug use and drug testing failure among constructor workers and contractors, and stronger enforcement of immigration laws.

As for development costs, Freddie reports that the price of land has increased faster than the price of homes.

“Since the cost of land is largely a fixed cost in a building project, the increase in the cost of land tends to make entry-level housing less profitable and thus tilts development toward higher-end housing,” the GSE reported.

More land-use regulations and lengthier permit approvals—about 3.5 months on average—also drive up development costs.

Still, despite the lagging inventory, Freddie reports the housing market is positioned for a good year.

“The housing market remains on track for a strong year despite a tight inventory of homes for sale,” the GSE reported. “Home sales bounced back in May after a relatively weak April, and sales year-to-date are running at an annual rate of 5.2 million units, compared to 4.7 million units for the first five months of 2016.”

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Be Careful Not to Get Caught in the Rental Trap!

KCM Crew, August 1st, 2017

Be Careful Not to Get Caught in The Rental Trap! | MyKCMThere are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped

A recent article by ConsumerAffairs addressed the continuous rise in rents, stating:

“The cost of putting a roof over your head continues to go up. Not only are home prices still rising, but the cost of rent rose 0.5% in June.”

Additionally, in the Joint Center for Housing Studies at Harvard University’s 2017 State of the Nation’s Housing Report, it was revealed that,

“Despite a slight improvement from 2014, fully one-third of US households paid more than 30 percent of their incomes for housing in 2015. Renters continue to be more likely to face cost burdens…the number of cost-burdened renters (21 million) considerably outstrips the number of cost-burdened owners (18 million) even though nearly two-thirds of US households own their homes.”

These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.

It’s Cheaper to Buy Than Rent

As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia shows that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!

Know Your Options

Perhaps you have already saved enough to buy your first home. A nationwide survey of about 24,000 renters found that 80% of millennial renters plan to eventually buy a house, but 72% cite affordability as their primary obstacle. Aside from affordability, one in three millennial renters have concerns about their credit scores,and another 53% said that a down payment is an obstacle.

Many first-time homebuyers who believe that they need a large down payment may be holding themselves backfrom their dream homes. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!

Posted in Financing, Home Buying, Home Selling, Homeownership, Market Conditions, Quality of Life, Rent vs. Buy | Tagged , , , , | Leave a comment