Older Americans 'Age in Place,' Millennials Struggle to Find Homes
February 18, 2019
With more seniors than ever aging in place and choosing not to sell the family home, an estimated 1.6 million fewer properties are now available in a market already experiencing a critical shortage, according to Freddie Mac.
That stay-put trend is crashing into the rising demand for housing from the huge millennial generation: fewer homes for sale will continue to put upward pressure on already overheated home prices.
While some homeowners are choosing to age in place, others simply can't afford the high costs of moving. Today's housing market is incredibly pricey, and some can't afford to move into another home, even a smaller one. For others, the math just doesn't make moving that attractive.
The homeownership rate among millennials is about 8 percentage points lower than previous generations at their age, according to the Urban Institute. Much of that has to do with delayed marriage, high levels of student loan debt, and a shift toward more expensive, urban living. Still, as more millennials age into marriage and parenthood, their desires to become homeowners increases, and the lack of supply of affordable homes for sale sidelines them.
While the nation's homebuilders are focusing on so-called 55+ communities, some of these are expensive and not near urban locations. Older Americans want to be close to their children and grandchildren and active baby boomers want to be in walkable communities with activities nearby. For some, downsizing into these communities works well, but for an increasing number, staying in their homes longer now seems sweeter.
Multifamily mortgage originations jumped 32% in the fourth quarter
Recently, the Mortgage Bankers Association predicted that multifamily lending was on track to set another record in 2018. And now that 2018 is over, we’re starting to get a look at just how good of a year it was for multifamily lending.
And just as expected, it appears that multifamily mortgage lending finished the year off on a strong note.
A new report from the MBA shows that multifamily mortgage originations jumped 32% in the fourth quarter over the same time period in 2017.
Overall, commercial real estate lending was up in the fourth quarter, climbing 14% over the previous year.
When compared to the third quarter of 2018, the fourth quarter’s numbers look even better.
“2018 ended on a strong note for commercial mortgage borrowing and lending, with fourth quarter originations 14% higher than a year earlier, despite the broader market volatility,” said Jamie Woodwell, MBA’s vice president for Commercial Real Estate Research.
The MBA report also has a first look at the year-end totals for 2018, which show that multifamily lending likely rose 22% last year when compared to 2017.
Total commercial real estate lending was up, but not by nearly as much. According to the MBA report, commercial originations were up 3% in 2018 over 2017.
By property type, originations for multifamily properties increased 22%, originations for industrial properties rose 12%, and originations increased 5% for hotel properties. On the other hand, office property originations fell by 7%, retail properties declined 13%, and healthcare properties decreased by 16%.
The MBA notes that these figures are preliminary and said that final figures will be released in late March.
Source: Ben Lane | HousingWire