Curious about what’s happening in the world of home loans? Here’s a roundup of recent industry trends, mortgage lending news, and generally helpful-to-know tidbits from around the web.
Gen Z is creeping into the housing market.
Step aside, Millennials: Homebuyers from Generation Z are making their way into the housing market. While Gen Z is still the least likely to have a mortgage (accounting for only 2% of mortgages originated in Q1 2019), the share is predicted to grow as the group ages. A recent report from TransUnion revealed that the number of Gen Z homeowners with a mortgage rose by 112% since last year.
People are nervous about a recession.
More than 50% of Americans who are currently searching for a new home will put their next-home purchase on pause until they see economic recovery.
While the aftermath of the 2008 financial crisis provided some homebuyers with a prime opportunity to purchase a house at a huge discount, experts don’t think another recession will have the same effect. HousingWire reports that 2% of economists, strategists, academics, and policymakers believe a recession will start this year, but experts also anticipate that tightened lending regulations and a record amount of home equity will likely make for a softer economic blow.
Homeowners are responding to lower interest rates.
Despite concerns about the economy, lower interest rates are giving the housing market a lift. Pending home sales have advanced to their best level since mid-2017, and new home sales have climbed about 15% so far this year.
The combination of rising home prices and falling rates means that homeowners are sitting on a large amount of home equity. This tappable equity hit a record $6.3 trillion in the second quarter of 2019, according to Black Knight. However, homeowners have been cautious about taking cash out.