October 13th, 2020 5:23 PM by Richard Sardella MLO.100007700/NMLS 233568
Younger generations now see home as the ultimate nest
As the world has become a scarier, more unsettling place, younger generations are now redefining the purpose of home, and they are more serious about it than ever.
Recently YPulse conducted a marketing report called No Place Like Home in which significant insights surfaced over how the Covid pandemic has changed how Gen-Z and millennials view their homes. Key findings? Forbes’ Charles Taylor quotes the report saying, “As young people look to their spaces as mental health retreats, at-home items and services that comfort, declutter, or foster a feeling of escape that from the outside world will resonate.”
The idea that millennials are true homebodies is nothing new. YPulse observed a while back that millennials preferred going to go to a café or watching Netflix at home as opposed to going to a party on a Saturday night even prior to the pandemic. Taylor adds, however, that both millennials and Gen-Z (widely regarded as the most stressed-out generation in history) are seeing the home as a refuge from the outside world, as many have felt stressed by issues such as climate change, the 2008 recession, student debt, and now Covid-19.
YPulse predicts these groups will increasingly look for spaces that offer a fully equipped home office, including ample seating, good desk space, temperature control, and tech features. Working remotely from home is not a trend that is expected to disappear once the pandemic is in the rearview mirror. Having both a home fitness space as well as private outdoor space are also key to winning their hearts, according to the research, along with well-equipped kitchens. With “eating out” no longer the treat it once was, there has been an uptick in the number reporting cooking as a hobby. Both a play space as well as a study space for children are also home gems to these generations — any way to keep the kids busy as well as entertained.
This research says that Covid has led to 80% of young people self-quarantining and, 83% reporting that their home has provided them with comfort during the pandemic. “In addition, 71% actually indicate that they actually enjoy being able to spend additional time at home,” he says. “This ‘shelter from the storm’ as YPulse puts it, brings comfort to young consumers, who describe their ideal home as being comfortable, cozy, safe, calming, and quiet. Accompanying these feelings is a desire for simplified décor that is calming and reflects a less cluttered environment.”
Unlike their parents, both of whom may have worked outside the home, depended on daycare to help with their families, and hired outsiders to perform their remodels, GenXers and millennials will be DIYers. “The report indicates that 64% of young consumers say they are more interested in-home improvement than before Covid,” says Taylor.
YPulse reports that while about 3 million millennials have moved back with their parents during the pandemic, a majority live on their own. Those who are currently sharing a home with their parents have the goal of owning in the future, with 85% of young people reporting that they plan to eventually buy a house.
As long as the inventory of possible homes can increase once the pandemic ends, the market may be flooded with young homebuyers. “It remains likely that once the crisis passes there will a boom in millennial wealth, leading to an even better housing market,” says Taylor. YPulse’s data says they will be looking for low crime rates, being close to friends, being able to afford a larger home, and having more outdoor space. This means the trend of moving out of cities will continue. “If more work remains remote post-Covid, this may become a very realistic dream for many young people,” he says.
Source: Forbes | TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market improved by +9bps. This caused rates and fees to mostly move sideways for the week. Rate volatility was a bit elevated last week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to move rates this week. 1) Stimulus, 2) Coronavirus, and 3)Geopolitical
1) Stimulus: A huge dose of direct checks to consumers, business loans, and money to state and local governments can have a huge stimulative impact on the economy IF it's done right. While both sides have been far apart on the size and scope of the next package, Treasury Sec. Mnuchin and Speaker Pelosi continue discussions and, for now, at least appear to be getting closer. Last week the two parties were $1.6T vs. $2.2T.
2) Coronavirus: The opening up/relaxing of protective measures vs. expanding measures directly impacts economic growth vs. contraction, employment, consumer spending, and more. Here are some of the latest concerns:
3) Geopolitical: President Trump's recovery, the VP debate, military escalation with Turkey, and more will get some attention from bond traders.
Treasury Dump: Here is this week's Treasury auction schedule; Thursday's 30 yr Bond is the most important for mortgage rates:
The Fed: We hear from Fed Chair Powell and the ECB's head Lagarde this week along with key releases:
This Week's Potential Volatility: High
There's not a lot of economic data due out this week that can move rates. However, we could see some rate volatility this week with a potential stimulus deal or new coronavirus developments.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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