DS News

41 » VISIT US ONLINE @ DSNEWS.COM MILLENNIALS CAN STILL MAKE A DIFFERENCE IN HOUSING Despite concerns about their current presence, millennials still have a major role to play in shaping the housing market in the coming years, researchers assert in a new report from the Demand Institute (TDI). Based on an analysis of economic and consumer research over the last 18 months, TDI predicts the number of households headed by millennials will reach 21.6 million by 2018, representing an increase of 8.3 million since 2013. at gain in younger household formations is expected to translate to $1.6 trillion spent on home purchases and $600 billion spent on rent in the next few years—more on a per-person basis than any other generation. While most of those new households are expected to rent, the report shows a combined 84 percent either already own a home or plan to purchase one someday. Furthermore, out of the nearly three-quarters of millennial consumers who said they plan to move in the next four years, 48 percent cited their desire to own their home as one of their top reasons for moving. Louise Keely, president of TDI and SVP at Nielsen, which jointly operates the think tank, said the feelings shown in the survey demonstrate that today's young adults might not be as negative on homeownership as some commentators might believe. "A fundamental question about Millennials is whether their coming of age in the Great Recession has shaped their goals and aspirations to be different from those of previous generations," Keely said. "We found that, while this generation has many unique characteristics when it comes to their housing choices, they share many of the same intentions as young adults in previous decades." One thing TDI researchers found that does fit with most reports: Gen Y has its own specific financial challenges keeping it on the sidelines of the housing market, especially in the area of student debt. In their research, they found that among the younger members of the 18–39 age group, those without student loans tend to have higher homeownership rates than those that don't, regardless of whether or not they graduated from college. On the other hand, homeownership rates are higher for college graduates between the ages of 30 and 39, suggesting the boost in income that comes with a college degree seems to play a bigger role. To cater to those millennials who have found themselves at a disadvantage as a result of high debt and a weak job market, TDI suggests lenders explore non-traditional financing options, including single-family rentals and hybrid contracts like lease-to-own agreements. REPORT: GSES PREVENTED 80,000 FORECLOSURES IN Q2 Fannie Mae and Freddie Mac prevented nearly 80,000 foreclosures nationwide in the second quarter, raising the total number of foreclosures prevented since the start of the conservatorship in September 2008 to 3.3 million, the Federal Housing Finance Agency (FHFA) indicated in its report on foreclosure prevention for Q2 2014 released on September 24. e measures taken by the two GSEs to prevent foreclosures have helped about 2.7 million borrowers remain in their homes in the last six years, with approximately 1.7 million of those borrowers receiving permanent loan modifications. e number of foreclosures prevented is down 10 percent from Q1, when GSE measures stopped almost 89,000 foreclosures. e number of delinquent loans more than 60 days past due declined 5 percent quarter- over-quarter, according to FHFA. As of the end of Q2 (end of June 2014), there were approximately 688,000 such loans, the lowest level since the conservatorship began six years ago. e number of seriously delinquent loans (more than 90 days past due or in foreclosure) fell 2.1 percent at the end of the quarter. Close to 49,000 borrowers received permanent loan modifications in Q1, down nearly 11 percent from 55,000 in Q1. However, FHFA reports that about 37 percent of those who received permanent loan modifications were able to reduce their monthly payments by more than 30 percent in Q2. e number of short sales and deeds-in-lieu of foreclosure for Q2 totaled approximately 14,500, down slightly from the 14,900 completed during Q1. e total amount of short sales and deeds-in-lieu since the conservatorship began stood at 581,400 at the end of Q2. REO inventory declined by 10 percent for Q2, from about 145,900 down to 131,500, according to FHFA. Meanwhile, third-party sales and foreclosure sales also dropped by 10 percent from Q1 to Q2, down to 42,800. Foreclosure starts ticked slightly upward for Q2, from 84,700 to 85,500. OCC: MORTGAGE PERFORMANCE UP, FORECLOSURES DOWN e Office of the Comptroller of the Currency (OCC) reported that 92.9 percent of first-lien mortgages at large national and federal savings banks were performing as of the end of June, according to the OCC Mortgage Metrics Report, second quarter 2014. e number of performing mortgages increased slightly from Q2 2013, when 90.6 percent of mortgages were reported as performing. e percentage of performing mortgages took a slight nudge downward quarter-over-quarter, from 93.1 percent down to 92.9 percent. e number of delinquent loans was also down, according to OCC; 2.4 percent of all mortgage loans were between 30 and 59 days past due, a decline of 17.3 percent from Q2 2013. e report found that the number of seriously delinquent loans, which are more than 60 days past due, fell by 17 percent from the same period a year ago. According to the report, foreclosure activity was way down among the servicers who reported. e number of properties in the process of foreclosure stood at 391,591 at the end of Q2, which represented a decline of 47.4 percent from Q2 2013. e number of new foreclosures initiated during Q2 also declined by 47 percent year-over-year, down to 79,781, according to OCC. Completed foreclosures also took a significant downward turn, falling by 39.1 percent down to 48,684 from the same period last year. e report stated that 1.6 percent of all mortgages were in some stage of the foreclosure process in Q2. OCC attributes the decline in foreclosures to foreclosure prevention assistance, improved economic conditions, and loan transfers not reported. OCC reported that about 47 percent of nationwide mortgages were included in this portfolio, which totaled about 24.1 million loans with approximately $4.1 billion in principal balances.

• Cover