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Press Release, SEM News

February 2017 Cal-Culator

Press Release, SEM News: March 22nd, 2017

Atlanta’s Residential Real Estate Index Reflects More Positive Gains
Atlanta’s residential real estate index continues to break its own record, marking new heights in the industry since the Great Recession. This month, the index moved an additional 0.1 bringing the index to 8.1 in part to rising home equity, homebuyer sentiment and millennial homeownership levels.

Positive Equity Up
CoreLogic’s latest Homeowner Equity Report revealed homeowners with a mortgage saw a year-over-year increase of 11.7 percent and more than one million borrowers moved out of negative equity, increasing the percentage of homeowners with positive equity to 93.8 percent of all mortgaged properties.

“Average home equity rose by $13,700 for U.S. homeowners during 2016,” said Frank Nothaft, chief economist for CoreLogic. “The equity build-up has been supported by home-price growth and paydown of principal. The CoreLogic Home Price Index for the U.S. rose 6.3 percent over the year ending December 2016. Furthermore, about one-fourth of all outstanding mortgages have a term of 20 years or less, which amortize more quickly than 30-year loans and contribute to faster equity accumulation.”

Homebuyer Sentiment at Record High
The Fannie Mae Home Purchase Sentiment Index reached an all-time high last month when it rose 5.6 percent to an 88.3 level.The net share of Americans who reported that now is a good time to buy rose 11 percentage points, while the net share who believe that now is a good time to sell rose 7 percentage points. Consumers also demonstrated greater confidence about not losing their jobs, with the net share rising 9 percentage points. On net, the share of respondents reporting that their household income is significantly higher than it was 12 months ago increased 4 percentage points. Additionally, more Americans expect home prices to go up, with the net share rising 3 percentage points. The net share of those who think mortgage rates will go down over the next 12 months remained unchanged for the third consecutive month.

“The latest post-election surge in optimism puts the HPSI at its highest level since its starting point in 2011. Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households. However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets.”

Increased Numbers of Millennial Homeownership
The housing industry can breathe a sight of relief: millennials are increasingly entering into homeownership. According to new data from Ellie Mae, mortgages to millennial borrowers for new home purchases accounted for 84 percent of closed loans during January, up from 82 percent in December and up from 77 percent from August through November.

“As the purchase market heats up, we will continue to watch the FHA purchase trend amongst millennials,” said Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy. “It is not surprising to see millennial borrowers leverage FHA loans because they typically offer lower down payments and lower average FICO score requirements than conventional loans. As more millennials enter the market, we expect to see the popularity of FHA loans continue to increase.”

The next Cal-Culator will be released April 11. Could we see a new record

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