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37 » VISIT US ONLINE @ DSNEWS.COM WHY ARE HOMEOWNERSHIP RATES FALLING? Despite all signs pointing toward a growing housing sector—record-low mortgage rates, strong refinance activity, and falling interest rates—information from Axios shows homeownership rates are dropping across the board. From 2002–2018, the homeownership rate for ages 35-64 have fallen, and some by nearly 10%. "e homeownership rate started to decline in 2004–2005 in the middle of the housing boom. For all the record issuance of subprime mortgages, option ARMs and NINJA loans, the rate declined, at almost exactly the same rate at which it continued to deteriorate during the worst years of the financial crisis," says the report. "Even the post-crisis recovery didn't change things. Only in the past couple of years have homeownership rates ticked up a tiny bit." Axios revealed that the homeownership rate for those younger than 35 fell from 43% in 2004 to 36% in 2018. e 35–44-year-old age group declined from its peak at 69% in 2005, to 60% last year. e homeownership rate for those aged 45–54 fell from 77% in 2004 to 70% in 2018, and those aged 55–64 saw a decline in homeownership from 2004's 82% to 2018's 75%. A report by CNN stated existing home sales fell 1.7% from May and had a 2.2% year-over-year drop, which is on par with home sales from 2015. Making matters worse for prospective buyers, is that prices for homes continued to rise during this period, according to CoreLogic's Case-Shiller Home Price Index (HPI). "e more than 100 basis point decrease in mortgage rates since November has revived home sales and given buyers additional purchasing power in the market," said Tian Liu, Chief Economist at Genworth Mortgage Insurance. "at extra purchasing power is beginning to show up in home prices." Along with crippling student debt and an exodus from out of rural areas and into urban settings, one of the issues identified in the report was the falling minority homeownership rate among the non-white population. Homeownership rates for African-Americans and Hispanics are under 50%, according to the report. "As America becomes increasingly nonwhite, the culture will continue to move away from the homeownership ideal," the report said. CLIMATE RISK: STORMS ON THE HORIZON A CNBC report follows a new brand of tech companies using advancements in technology to track how climate change could impact real estate in the not-so-distant future. e report states that a joint study from Heitman and the Urban Land Institute titled, "Climate Risk and Real Estate Investment Decision-Making," revealed real estate markets "are far from understanding climate risks enough to price them in today." Additionally, companies are turning to high-tech data analysts who can go well beyond current flood maps to forecast climate risks for real estate. Rick Sorkin, CEO of Jupiter Intelligence, was asked in the report what he thought of the water surrounding the island of Manhattan, his response: "It's beautiful, and it's incredibly dangerous." Jupiter, whose clients include the cities of New York and Miami, Florida, is a startup tech company backed by $40 million in venture capital. "We're seeing a dramatic expansion of large corporations coming to us and saying, 'we need to understand the risks in this office complex, the risks in this hotel, or the risks in this neighborhood, where we have hundreds of millions of dollars of mortgages out," Sorkin said. Jupiter analyzes properties, using predictive data points and then gives clients a risk score, forecasting up to 50 years into the future. Analyzing data to prepare for a disaster is key, and it was among the topics discussed at the recent Five Star Institute's Disaster Preparedness Symposium, in New Orleans, Louisiana. Jody Gunderson, EVP of National General Lender Services, who also moderated a panel on disaster data during the event, said both insurance and mortgage industries "have more information than event" to identify the impact of natural disasters. "Meteorological forecasts have become more accurate and are able to discern potential events, especially hurricanes, further in advance," Gunderson said. "We also have better information about potential flooding and wildfire events. is enhanced data and more precise modeling translates into better analytics and thus a better borrower experience." She added that data can also teach lessons, saying that insurance industry loss data currently specifies many properties that are underinsured and lacking coverage to rebuild in the event of a natural disaster.

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