Millennial homeowners now outnumber millennial renters

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1. Millennial homeowners now outnumber millennial renters

It's tougher than ever to save for a down payment and buy a starter home amid rising rent prices and creeping mortgage rates. But millennials (those born between 1981-1996) are now reaching middle age and finally starting to earn enough money to afford the costs.

With 52% of Millennials now owning a home, the largest generation in the nation transitioned from renter-majority to owner-majority. Over the past five years, their homeownership increased by 7 million, outpacing Gen X (who came in second) by more than triple.

Despite dominating the renting market with 17.2 million households, Millennials now have 18.2 million homeowners. Gen Z (born 1997 to 2013) remains the renter-majority generation, with 74% renting.

Richmond, VA, experienced the largest growth in Millennial homeownership among the top 50 U.S. metros, with a 234% increase. The average first-time Millennial homebuyer was 34 years old.

Dive into the data here.

2. Homebuilder sentiment increases for a fourth-straight month

U.S. homebuilder sentiment continued to rise in April for the fourth consecutive month, as limited resale inventory increased demand for new houses, signaling a gradual recovery in the residential real estate market.

The National Association of Home Builders/Wells Fargo gauge reached a seven-month high of 45, although it remains below levels observed in late 2021 when mortgage rates were much lower.

According to NAHB Chief Economist Robert Dietz, new construction accounts for one-third of housing inventory, and the use of sales incentives has supported new-home sales since 2023 began. He also added that despite tighter lending conditions, regional banks have not yet worsened the lending environment for builders and land developers.

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3. Housing starts down 0.8% in March, but single-family up 2.7%

In March, housing starts were at an estimated annual pace of 1.42 million, down 0.8% month over month. This decrease was largely due to a 6.7% drop in multifamily housing starts. However, single-family starts increased by 2.7% month over month.

Builder confidence has been rising in 2023, but lower home construction activity might be attributed to low confidence in the return of prospective buyers. Housing completions also fell 0.6% month over month compared to February, but overall completions rose by 12.9% year over year.

The construction pipeline continues to refresh housing inventory, which benefits buyers during the tight spring shopping season. Regionally, housing starts increased in the South and Northeast but declined in the West and Midwest, according to a report released Tuesday by the Census Bureau.

4. More Nuggets

🔒 Foreclosure rates increased during the first quarter, as filings rose 6% compared to the previous quarter and a 22% increase compared to a year ago, while the number of bank repossessions increased by 8% from the previous quarter, with 12,518 properties repossessed. (Attom)

🎭 Real estate wire transactions are increasingly the target of cybercriminals. Consumers lose $106K on average to wire fraud per incident, highlighting the need for better education and protection against payment fraud in the industry. (CertifID)

🏦 Bank of America profits grew 15% last quarter, driven by organic growth of client relationships and higher interest rates, while its mortgage and home equity business declined by double digits due to elevated fixed mortgage rates. (HW)

5. Loans in forbearance decrease in March

The forbearance rate decreased month over month as the COVID-19 national emergency came to an end, with the total number of loans in forbearance dropping from 0.60% to 0.55% between February and March, according to an MBA report. Approximately 275,000 homeowners were in forbearance plans by March 31.

The most significant improvement was seen in Ginnie Mae loans in forbearance, declining 10 basis points to 1.18% in March. The forbearance share for portfolio loans and private-label securities (PLS) also dropped 10 basis points to 0.68%, while Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.26%.

Mortgage performance remains strong, with 96.35% of the loans serviced being current on payments and post-forbearance workouts increasing in March.

☀️ See you on Friday!

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