GREAT TIPS TO IMPROVE YOUR CREDIT SCORE.
Many are taking advantage of interest rates at historic lows, either by re-structuring debt with a refinance or purchasing a new home. However, the recent economic crisis has created even tougher guidelines and credit requirements and there are some things that consumers must be aware of when applying for a loan.
Leading nationwide credit expert and President of Credit Resource Corporation, Linda Ferrari, developed the top 10 credit don'ts during the loan process, to help you get your arms around those things that can unknowingly wreak havoc on your loan transaction.
1. Don't do anything that will cause a red flag to be raised by the scoring system
2. Don't apply for new credit of any kind
3. Don't pay off collections or charge offs
4. Don't max out or over charge on your credit card accounts
5. Don't consolidate your debt onto 1 or 2 credit cards
6. Don't close credit card accounts
7. Don't pay late
8. Don't allow any accounts to run past due-even one day!
9. Don't dispute anything on your credit report
10. Don't lose contact with your mortgage and real estate professionals
Wednesday, October 27, 2010
Tuesday, October 26, 2010
MARKET RECAP
We can't say that the post-tax credit lull is officially over, but recent housing data lead us to believe it is. Housing starts again surprised on the upside, increasing 0.3 percent in September to 610,000 seasonally adjusted annual units, after jumping 10.5 percent in August. More importantly, single-family starts were noticeably stronger, increasing 4.4 percent month-to-month.
Gains in the immediate future might be tougher to come by. Permits declined 5.6 percent, lead by an acute decline in the multi-family segment, which tumbled 20.2 percent after a 9.8 percent rise in August. The bad news on multi-family permits – which tend to be volatile anyway – is offset somewhat by the good news that single-family permits edged up 0.5 percent.
Improving sales and more construction helped lift the Housing Market Index – a gauge of homebuilder sentiment – to a 16 reading in October after posting at 13 in September. Although the sentiment is still low, it should continue to improve: the HMI component for sales expected in the next six months rose to 23 from September's 18.
We don't want to minimize legitimate concerns, but the tendency is to extrapolate near-term news farther into the future than it probably deserves. Admittedly, news has been underwhelming due to tax-credit expirations, sluggish job growth, shadow inventory build up and foreclosure-gate, but these things can pass as quickly as they come. Indeed, we are already seeing reports that last week's fears of a country-wide foreclosure meltdown were seriously overdone.
In the meantime, mortgage rates remain stable (which also means they show little inclination to go lower), as do home prices, so it's important to keep the long term in perspective. Few people doubt that there's a high probability that a refinance or a home purchase today will look like a very savvy investment five years hence.
the economy.
Another Reason We Think Home Prices Have Bottomed
Last week we discussed quantitative easing and the prospect of the Federal Reserve injecting more money into the banking system. The scuttlebutt on the street says the Fed could pump another trillion dollars into the system through Treasury-bond purchases. It's no slam-dunk, though; the money supply is already at an all-time high, according to the St. Louis Bank of the Federal Reserve.
Because of heightened uncertainty, new money has had only a minor impact on consumer prices. In other words, consumer-price inflation remains low (though prices haven't been falling either). Much of the inflation associated with the new money has shown up in the investment markets instead, particularly in stock and gold prices.
We think it's only a matter of time before consumer prices come under inflationary pressure. The fact is that even if the Federal Reserve doesn't add more money to the system, the banks could. They are sitting on $980 billion of excess reserves, which could easily be drawn into the loan markets, thus further expanding the money supply.
All this money and the potential for even more money will help keep home prices stable in nominal terms. And it's these nominal values that serve as the basis for home appraisals and loan amounts. In other words, if the Fed's goal were to maintain a median home price of $200,000, it could theoretically pump enough money into the economy to make it happen. It wouldn't necessarily be a good idea, but it is an option if price stability were the goal.
We can't say that the post-tax credit lull is officially over, but recent housing data lead us to believe it is. Housing starts again surprised on the upside, increasing 0.3 percent in September to 610,000 seasonally adjusted annual units, after jumping 10.5 percent in August. More importantly, single-family starts were noticeably stronger, increasing 4.4 percent month-to-month.
Gains in the immediate future might be tougher to come by. Permits declined 5.6 percent, lead by an acute decline in the multi-family segment, which tumbled 20.2 percent after a 9.8 percent rise in August. The bad news on multi-family permits – which tend to be volatile anyway – is offset somewhat by the good news that single-family permits edged up 0.5 percent.
Improving sales and more construction helped lift the Housing Market Index – a gauge of homebuilder sentiment – to a 16 reading in October after posting at 13 in September. Although the sentiment is still low, it should continue to improve: the HMI component for sales expected in the next six months rose to 23 from September's 18.
We don't want to minimize legitimate concerns, but the tendency is to extrapolate near-term news farther into the future than it probably deserves. Admittedly, news has been underwhelming due to tax-credit expirations, sluggish job growth, shadow inventory build up and foreclosure-gate, but these things can pass as quickly as they come. Indeed, we are already seeing reports that last week's fears of a country-wide foreclosure meltdown were seriously overdone.
In the meantime, mortgage rates remain stable (which also means they show little inclination to go lower), as do home prices, so it's important to keep the long term in perspective. Few people doubt that there's a high probability that a refinance or a home purchase today will look like a very savvy investment five years hence.
the economy.
Another Reason We Think Home Prices Have Bottomed
Last week we discussed quantitative easing and the prospect of the Federal Reserve injecting more money into the banking system. The scuttlebutt on the street says the Fed could pump another trillion dollars into the system through Treasury-bond purchases. It's no slam-dunk, though; the money supply is already at an all-time high, according to the St. Louis Bank of the Federal Reserve.
Because of heightened uncertainty, new money has had only a minor impact on consumer prices. In other words, consumer-price inflation remains low (though prices haven't been falling either). Much of the inflation associated with the new money has shown up in the investment markets instead, particularly in stock and gold prices.
We think it's only a matter of time before consumer prices come under inflationary pressure. The fact is that even if the Federal Reserve doesn't add more money to the system, the banks could. They are sitting on $980 billion of excess reserves, which could easily be drawn into the loan markets, thus further expanding the money supply.
All this money and the potential for even more money will help keep home prices stable in nominal terms. And it's these nominal values that serve as the basis for home appraisals and loan amounts. In other words, if the Fed's goal were to maintain a median home price of $200,000, it could theoretically pump enough money into the economy to make it happen. It wouldn't necessarily be a good idea, but it is an option if price stability were the goal.
Home Buying and Selling Tips for Fall
Here are some of their tips for fall buyers and sellers:
Fall Sellers:
Replace faded summer plants with fall-blooming flowers and add autumn decorations to the home.
Expect low-ball offers and be prepared with higher counter offers.
Freshen up listing photos by shooting pictures that make it less obvious that the seasons have changed.
Price the home to sell. A price that is a little lower than the competition may be a winning move.
Be willing to show the property and hold open houses whenever potential buyers are ready
Fall Buyers:
Look for motivated sellers who have a reason to move on by the end of the year.
Explore new constructions. Builders are often interested in selling before the new tax year.
Beware of fall maintenance issues. Consider overflowing gutters and leaf-covered lawns.
Shape offers carefully. Even in this market it is possible to turn sellers off with a too-low bid.
Fall Maintenance
1. Check your heating system including filters, pilot lights and burners. Have the system serviced by a qualified professional. Cleaning and servicing now can save you money later. Learn steps to boost your furnace's efficiency and how to replace your furnace filter.
Here are some of their tips for fall buyers and sellers:
Fall Sellers:
Replace faded summer plants with fall-blooming flowers and add autumn decorations to the home.
Expect low-ball offers and be prepared with higher counter offers.
Freshen up listing photos by shooting pictures that make it less obvious that the seasons have changed.
Price the home to sell. A price that is a little lower than the competition may be a winning move.
Be willing to show the property and hold open houses whenever potential buyers are ready
Fall Buyers:
Look for motivated sellers who have a reason to move on by the end of the year.
Explore new constructions. Builders are often interested in selling before the new tax year.
Beware of fall maintenance issues. Consider overflowing gutters and leaf-covered lawns.
Shape offers carefully. Even in this market it is possible to turn sellers off with a too-low bid.
Fall Maintenance
1. Check your heating system including filters, pilot lights and burners. Have the system serviced by a qualified professional. Cleaning and servicing now can save you money later. Learn steps to boost your furnace's efficiency and how to replace your furnace filter.
Wednesday, October 20, 2010
Bank of America Foreclosures to Resume in 23 States (CA not included yet)
Here’s a list of the 23 states in which Bank of America will begin reissuing foreclosures:
Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, Wisconsin
Bank of America will resume mortgage foreclosures in 23 states.
The bank, which earlier this month stopped foreclosures across the nation, announced its plans to restart foreclosure sales in nearly half of those states by October 25, which is next Monday. Chase Bank, PNC Bank and Ally GMAC have all stopped foreclosures in those 23 states.
The bank reported that it had not found any improper paperwork so far. It will resume 102,000 foreclosures next week as a result of the decision.
“Our initial assessment findings show the basis for our foreclosure decisions is accurate,” Bank of America said in a statement. “Our decision to review our process and later, to extend our review to all 50 states, has been an important step to give customers confidence they are being treated fairly.”
Here’s a list of the 23 states in which Bank of America will begin reissuing foreclosures:
Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, Wisconsin
Bank of America will resume mortgage foreclosures in 23 states.
The bank, which earlier this month stopped foreclosures across the nation, announced its plans to restart foreclosure sales in nearly half of those states by October 25, which is next Monday. Chase Bank, PNC Bank and Ally GMAC have all stopped foreclosures in those 23 states.
The bank reported that it had not found any improper paperwork so far. It will resume 102,000 foreclosures next week as a result of the decision.
“Our initial assessment findings show the basis for our foreclosure decisions is accurate,” Bank of America said in a statement. “Our decision to review our process and later, to extend our review to all 50 states, has been an important step to give customers confidence they are being treated fairly.”
Monday, October 18, 2010
California Latinos: Paying the High Price of Foreclosure
Latinos and African Americans in California have experienced significantly higher foreclosure rates than non-Hispanic borrowers in the state, according to the Center of Responsible Lending. These communities represent more than half of all foreclosures, with 48% of foreclosures on Latinos and 8% on African Americans. The study analyzed more than 600,000 foreclosures.
Latinos and African Americans in California have experienced significantly higher foreclosure rates than non-Hispanic borrowers in the state, according to the Center of Responsible Lending. These communities represent more than half of all foreclosures, with 48% of foreclosures on Latinos and 8% on African Americans. The study analyzed more than 600,000 foreclosures.
Wednesday, October 13, 2010
A DAY OF JOY FOR HUMAN KIND!!
What a glorious day!, they have rescued the 33 miners in Chile!
For the last two months we have grown used to listening about the terrible ordeal that these poor men and their families were enduring, imagine being trapped a mile under the surface, with slight to none chances of surviving. It went from a headline news to a second rated notice, except for these poor people.
Today billions of people around the world watched, with tears in our eyes, the exhiliarating moments of a great triumph of man kind, of our technology, or persistence, and more than anything, the miracle of life.
It made me think. How lucky we are, no matter how trapped we feel by our economy, our joblessness, our family problems, when we compare our ordeal to what these men went through, all our problems sudenly seem so, so small, so pale.
This day, today, is without a doubt, the happiest day of all of these guy's lives, and why are they so happy?, because they now are aware that no matter how poor they are, how bad their situation was, it can always be much worse and how ever their life was before being trapped, it was a life worth living, they could look at the sunset, admire the beauty of nature, they were loved by their families, they could enjoy the wonders of God's creation for free, and they had taken all of this for granted, as we all do.
We are so immersed in our little world, that we forget to enjoy the truly amazing things that God placed are around us every day.
That is why we all cried, that is why, this is a great day for all of us, humans, because this fantastic event in that tiny town in Chile, has given us all, a chance to reflect, to rethink our priorities, to appreciate what we have, and to praise our God and thank him for making this life so amazingly wonderful!
What a glorious day!, they have rescued the 33 miners in Chile!
For the last two months we have grown used to listening about the terrible ordeal that these poor men and their families were enduring, imagine being trapped a mile under the surface, with slight to none chances of surviving. It went from a headline news to a second rated notice, except for these poor people.
Today billions of people around the world watched, with tears in our eyes, the exhiliarating moments of a great triumph of man kind, of our technology, or persistence, and more than anything, the miracle of life.
It made me think. How lucky we are, no matter how trapped we feel by our economy, our joblessness, our family problems, when we compare our ordeal to what these men went through, all our problems sudenly seem so, so small, so pale.
This day, today, is without a doubt, the happiest day of all of these guy's lives, and why are they so happy?, because they now are aware that no matter how poor they are, how bad their situation was, it can always be much worse and how ever their life was before being trapped, it was a life worth living, they could look at the sunset, admire the beauty of nature, they were loved by their families, they could enjoy the wonders of God's creation for free, and they had taken all of this for granted, as we all do.
We are so immersed in our little world, that we forget to enjoy the truly amazing things that God placed are around us every day.
That is why we all cried, that is why, this is a great day for all of us, humans, because this fantastic event in that tiny town in Chile, has given us all, a chance to reflect, to rethink our priorities, to appreciate what we have, and to praise our God and thank him for making this life so amazingly wonderful!
Tuesday, October 12, 2010
Foreclosure Moratorium, Robo-Signer Fiasco Should Be Resolved Soon.
The White House, yielding to common sense, opposes a national moratorium on foreclosure sales on the grounds that it would harm the housing market. (Finally something good from the Obamas)
David Axelroid, a White House senior adviser, said on CBS’s “Face the Nation” on Suday: “I’m not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward.”
That brings up the question of what a valid foreclosure is. My definition: When a homeowner hasn’t made mortgage payments in at least three months, and the servicer has notified all necessary parties that it intends to take back the property, and the borrower doesn’t reach some sort of accommodation with the servicer, then a foreclosure is valid.
Some readers commented last week that mortgage servicers forged documents. The robo-signing issue has nothing to do with forgery. The robo-signers aren’t accused of faking documents. They’re accused of not closely reading the documents, which mostly are legal boilerplate.
Other readers say the foreclosing servicer should be required to prove ownership of the loan. I’m not sure what the argument is here. The borrower doesn’t send checks to the servicer. After a few months, that same servicer starts the foreclosure process. Obviously, the servicer works on behalf of the owner (or owners) of the loan.
When two servicers foreclose, I can see where ownership of the loan becomes a valid question. But I don’t think there are a lot of cases of multiple servicers foreclosing on the same loan.
Hot off the press from Bloomberg.
It appears that the robo-signer…foreclosure moratorium will be resolved this week.
Title insurers are in talks with banks and regulators to obtain warranties from lenders assuring they followed proper procedures before selling foreclosed homes, said Kurt Pitohouse, head of the insurers’ trade group.
“Everyone sort of sees the same risks, and that’s the good part,” Pitohouse, chief executive officer of the American Land Title Association, said today in a telephone interview. “You just have to craft a solution that’s acceptable to all the parties, and we’re making progress.”
Bank of America Corp., the biggest U.S. lender, on Oct. 8 extended a freeze on foreclosures to all 50 states amid concern by federal and state officials that homes are being seized based on faulty information. The Charlotte, North Carolina-based bank agreed that day to issue warranties for Fidelity National Financial Inc., the largest title insurer, said Peter Sidransky executive vice president and chief legal officer for Fidelity.
“It’s a representation that there are no issues going forward and an indemnity if someone makes a mistake,” he said.
JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit have also stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false data to speed the process.
End of Week
A decision on the warranties may be reached by the end of the week, Pitohouse said. The assurances would help lenders resume foreclosures of homes with mortgage defaults and continue selling off their backlog of repossessed properties, he said. Pitohouse wouldn’t name the companies or regulators involved in the talks.
Fidelity National shares have dropped 10 percent this month. The company had about 38 percent of the market in the second quarter, according to the title insurance association. Shares of Santa Ana, California-based First American Financial Co., the No. 2 insurer, have fallen 5 percent.
Costs for title insurers to defend customers and reimburse for lost properties rose to $480.5 million in the first half of 2010, an increase of 14 percent from a year earlier, according to the American Land Title Association.
Among the tasks performed by title insurers is reviewing the public record for a court order that confirms a bank owns a particular property before it’s foreclosed on, Pitohouse said.
“Court rulings on valid foreclosures are going to be challenged,” he said. “That means we may get pulled into litigation.”
Preventing Risks
The warranties in the works are intended to protect title insurers from similar risks in the future, Pitohouse said.
Bank of America’s agreement with Jacksonville, Florida- based Fidelity National calls for the lender to cover the title insurer’s costs in the event of an error in the company’s processing of foreclosure documents, Sidranski or (Charransky, as his friends call him) said. The bank will notify the insurer in each case that the foreclosure complies with state laws and regulations.
Bank of America is in talks with other title insurers for similar agreements, said Richard Bramhall, the bank’s chief title officer. He declined to name the other companies.
“Our goal is to restore order to the chaos,” he said. “We’re optimistic that this will help calm the waters in regard to all the anxiety you see all over the country.”
The White House, yielding to common sense, opposes a national moratorium on foreclosure sales on the grounds that it would harm the housing market. (Finally something good from the Obamas)
David Axelroid, a White House senior adviser, said on CBS’s “Face the Nation” on Suday: “I’m not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward.”
That brings up the question of what a valid foreclosure is. My definition: When a homeowner hasn’t made mortgage payments in at least three months, and the servicer has notified all necessary parties that it intends to take back the property, and the borrower doesn’t reach some sort of accommodation with the servicer, then a foreclosure is valid.
Some readers commented last week that mortgage servicers forged documents. The robo-signing issue has nothing to do with forgery. The robo-signers aren’t accused of faking documents. They’re accused of not closely reading the documents, which mostly are legal boilerplate.
Other readers say the foreclosing servicer should be required to prove ownership of the loan. I’m not sure what the argument is here. The borrower doesn’t send checks to the servicer. After a few months, that same servicer starts the foreclosure process. Obviously, the servicer works on behalf of the owner (or owners) of the loan.
When two servicers foreclose, I can see where ownership of the loan becomes a valid question. But I don’t think there are a lot of cases of multiple servicers foreclosing on the same loan.
Hot off the press from Bloomberg.
It appears that the robo-signer…foreclosure moratorium will be resolved this week.
Title insurers are in talks with banks and regulators to obtain warranties from lenders assuring they followed proper procedures before selling foreclosed homes, said Kurt Pitohouse, head of the insurers’ trade group.
“Everyone sort of sees the same risks, and that’s the good part,” Pitohouse, chief executive officer of the American Land Title Association, said today in a telephone interview. “You just have to craft a solution that’s acceptable to all the parties, and we’re making progress.”
Bank of America Corp., the biggest U.S. lender, on Oct. 8 extended a freeze on foreclosures to all 50 states amid concern by federal and state officials that homes are being seized based on faulty information. The Charlotte, North Carolina-based bank agreed that day to issue warranties for Fidelity National Financial Inc., the largest title insurer, said Peter Sidransky executive vice president and chief legal officer for Fidelity.
“It’s a representation that there are no issues going forward and an indemnity if someone makes a mistake,” he said.
JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit have also stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false data to speed the process.
End of Week
A decision on the warranties may be reached by the end of the week, Pitohouse said. The assurances would help lenders resume foreclosures of homes with mortgage defaults and continue selling off their backlog of repossessed properties, he said. Pitohouse wouldn’t name the companies or regulators involved in the talks.
Fidelity National shares have dropped 10 percent this month. The company had about 38 percent of the market in the second quarter, according to the title insurance association. Shares of Santa Ana, California-based First American Financial Co., the No. 2 insurer, have fallen 5 percent.
Costs for title insurers to defend customers and reimburse for lost properties rose to $480.5 million in the first half of 2010, an increase of 14 percent from a year earlier, according to the American Land Title Association.
Among the tasks performed by title insurers is reviewing the public record for a court order that confirms a bank owns a particular property before it’s foreclosed on, Pitohouse said.
“Court rulings on valid foreclosures are going to be challenged,” he said. “That means we may get pulled into litigation.”
Preventing Risks
The warranties in the works are intended to protect title insurers from similar risks in the future, Pitohouse said.
Bank of America’s agreement with Jacksonville, Florida- based Fidelity National calls for the lender to cover the title insurer’s costs in the event of an error in the company’s processing of foreclosure documents, Sidranski or (Charransky, as his friends call him) said. The bank will notify the insurer in each case that the foreclosure complies with state laws and regulations.
Bank of America is in talks with other title insurers for similar agreements, said Richard Bramhall, the bank’s chief title officer. He declined to name the other companies.
“Our goal is to restore order to the chaos,” he said. “We’re optimistic that this will help calm the waters in regard to all the anxiety you see all over the country.”
Wednesday, October 6, 2010
The Eco boomers to the rescue!!!
There are many names for the Echo Boom generation: Gen Y, Generation Next, Net Generation, Millennials, Boomerang Generation and Trophy Generation, to name a few (OK, several).
Regardless of what you call them, the members of this generation are quickly coming of age; some are even starting to enter the housing market and there are many, many more to follow.
Echo boomers were born roughly between 1982-95 -- they are largely the offspring of baby boomers.
Fast forward to 2010. There are approximately 76 million echo boomers between 15 and 28 years old, making them second in size only to the baby boomers (age and population figures cited here represent an approximation based upon information found in studies done by the National Association of Realtors, current U.S. Census data, Wikipedia, and various media sources).
According to current U.S. Census figures, 67.2 percent of this generation can be expected to become homeowners by their mid 30s, which equates to just over 35.5 million households (U.S. Census homeownership rates are calculated based on households, not people).
The National Association of Realtors' 2009 Profile of Home Buyers and Sellers predicts that of this 35.5 million, 21 percent will be single female buyers, 12 percent will be single males, and 61 percent will be married couples or partners (couples/partners are counted as a single household).
It's worth pointing out here that the aforementioned U.S. Census figures also state that since 1982, homeownership rates have fluctuated very little; anywhere between 64 percent and 69 percent during this 28-year span.
As you wrap your head around those figures, think about the impact that this generation is going to have on housing in the coming years. According to a recent economic report by Moody's, builders are currently developing about 500,000 housing units a year.
Add into this equation that the echo boomers will be buying homes alongside repeat purchasers from other generations and you can quickly surmise that in the foreseeable future we are going to have a shortage of housing in the "more affordable" markets (where homes are priced at or below the area's median price).
The onset of the echo boomers in the housing market is a stark reminder of how important our community's growth-management plans are. The sheer size of the Echo Boom generation will have a powerful effect on housing demand over the next decade, but will there be enough homes to meet that demand?
Current studies say no, reinforcing the importance of implementing smart growth management NOW. The first wave of change will likely occur in the more affordable price ranges -- especially in those areas that are close to job centers. Over time, the effect will fan out and be felt by the outer suburbs, causing a chain reaction of sales up the price points.
The Echo Boom generation has been defined as high-tech, high-touch, social-networking, iPod-listening natives of the digital realm who trust their peers' advice over most forms of advertising. This is the generation that will likely find the home of their dreams on a 4G wi-max third-generation iPad and will contact their real estate agent via Twitter or text message.
But as foreign as some of this may sound to some of you, they are (and will be) homebuyers nonetheless, and real estate professionals and companies need to continue to adapt to this generation's expectations and habits.
So, the moral of this story is that I believe that the echo boomers represent the silver lining for the real estate market and U.S. economy. That might be a lot of responsibility for a single generation, but they're unarguably emerging as the next heavyweights in housing, and I might add: not a moment too soon.
There are many names for the Echo Boom generation: Gen Y, Generation Next, Net Generation, Millennials, Boomerang Generation and Trophy Generation, to name a few (OK, several).
Regardless of what you call them, the members of this generation are quickly coming of age; some are even starting to enter the housing market and there are many, many more to follow.
Echo boomers were born roughly between 1982-95 -- they are largely the offspring of baby boomers.
Fast forward to 2010. There are approximately 76 million echo boomers between 15 and 28 years old, making them second in size only to the baby boomers (age and population figures cited here represent an approximation based upon information found in studies done by the National Association of Realtors, current U.S. Census data, Wikipedia, and various media sources).
According to current U.S. Census figures, 67.2 percent of this generation can be expected to become homeowners by their mid 30s, which equates to just over 35.5 million households (U.S. Census homeownership rates are calculated based on households, not people).
The National Association of Realtors' 2009 Profile of Home Buyers and Sellers predicts that of this 35.5 million, 21 percent will be single female buyers, 12 percent will be single males, and 61 percent will be married couples or partners (couples/partners are counted as a single household).
It's worth pointing out here that the aforementioned U.S. Census figures also state that since 1982, homeownership rates have fluctuated very little; anywhere between 64 percent and 69 percent during this 28-year span.
As you wrap your head around those figures, think about the impact that this generation is going to have on housing in the coming years. According to a recent economic report by Moody's, builders are currently developing about 500,000 housing units a year.
Add into this equation that the echo boomers will be buying homes alongside repeat purchasers from other generations and you can quickly surmise that in the foreseeable future we are going to have a shortage of housing in the "more affordable" markets (where homes are priced at or below the area's median price).
The onset of the echo boomers in the housing market is a stark reminder of how important our community's growth-management plans are. The sheer size of the Echo Boom generation will have a powerful effect on housing demand over the next decade, but will there be enough homes to meet that demand?
Current studies say no, reinforcing the importance of implementing smart growth management NOW. The first wave of change will likely occur in the more affordable price ranges -- especially in those areas that are close to job centers. Over time, the effect will fan out and be felt by the outer suburbs, causing a chain reaction of sales up the price points.
The Echo Boom generation has been defined as high-tech, high-touch, social-networking, iPod-listening natives of the digital realm who trust their peers' advice over most forms of advertising. This is the generation that will likely find the home of their dreams on a 4G wi-max third-generation iPad and will contact their real estate agent via Twitter or text message.
But as foreign as some of this may sound to some of you, they are (and will be) homebuyers nonetheless, and real estate professionals and companies need to continue to adapt to this generation's expectations and habits.
So, the moral of this story is that I believe that the echo boomers represent the silver lining for the real estate market and U.S. economy. That might be a lot of responsibility for a single generation, but they're unarguably emerging as the next heavyweights in housing, and I might add: not a moment too soon.
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