Believe it or not, Curbed found SIX housing options that those earning Seattle’s now $14/hour minimum wage can afford without being rent-burdened. Some, as you’d expect, are in less-than-central locations such as Kent and Everett, but an International District studio was available for just $705/month! As a point of reference, $728 would be the monthly payment for a $153,900 mortgage at today’s interest rate, not counting mortgage insurance, property taxes, HOA fees, insurance, repairs & maintenance, utilities…
No, not the month. ATTOM Data says that in 2017, there was a 123% increase in home purchases by buyers named April in Washington State. Nationwide, buyers named Dylan, Chelsea, Austin, Alexandra and Taylor snapped up homes, while those named Gerald, Kristin, Stanley, Kurt and Jaime held back. ATTOM thinks this indicates increased millennial home buying as the first group of names spiked in popularity for babies born between 1992 and 1995, and the second group of names were most popular before 1976.
According to Ellie Mae, that’s the average FICO score for closed loans with millennial borrowers in November, 2017. Millennial credit scores for FHA refinance loans were much lower: 669, versus 679 a year ago.
Speaking of millennials, Seattle Times reports that 23-year-old Cary Kuo turned his $4,500 initial investment in cryptocurrency into a 10% down payment for his new house in Tukwila. Guild Mortgage confirmed with Fannie Mae that bitcoin is an acceptable asset for securing a loan. However, neither the seller nor any other party actually received cryptocurrency as part of the transaction. Kuo converted his bitcoin cash to US dollars to complete the sale. I was interested to read that in spite of his profitable investments, Kuo plans to cash out regularly and use the money to buy real estate.
Perhaps Kuo read that over the years between 1870 and 2015, housing was the best investment in the world, providing the steadiest inflation-adjusted return on investment.
Unlike Kuo, 61% of first time home buyers made 6% or lower down payments on their purchases. According to the Federal Reserve Board, average savings among non-homeowners was only $5,200 in 2016. Fannie Mae does allow 100% of a purchaser’s down payment to come from relatives and/or partners. Freddie Mac allows gifts after the borrower puts in 3%. FHA allows those with 620+ credit scores to receive funds from friends, relatives, employers, non-profits and government agencies.
According to the Bureau of Labor Statistics, that’s the number of residential construction jobs added to the US economy in 2017. National Association of Realtors chief economist Lawrence Yun says we still don’t have nearly enough construction labor to meet housing demand. He suggests issuing temporary work visas to make up for inadequate availability of domestic construction workers. (via HousingWire)
In the $1M+ market, though, S&P predicts that the new law could reduce demand: “our initial analysis suggests that the lost tax deductions may affect homeowners’ free cash flow by as much as 0.5%-1% of the property value on an annual basis, depending upon local tax rates. Consequently, we expect that overall long-term home price appreciation for these properties could be dampened by 15 percentage points or more.”