Couples able to afford more homes than singles:
A couple with a combined household income of $80,800 could afford 82% of all US homes and would be able to save their down payment in just 5 years.
But for singles, its another story.
An analysis from Zillow calculates that less than half of all US homes are affordable for a single buyer based on a median household income of $34,500. And since they don’t have the help of a spouse, it could take up to 11 years to save up enough for a standard down payment.
“Nearly two-thirds of Americans agree that buying a home is a central part of living the American Dream, but for unmarried or un-partnered Americans, that dream is increasingly out of reach,” said Zillow senior economist Aaron Terrazas. “Single buyers typically have more limited budgets, which means they are likely competing for lower-priced homes that are in high demand. Having two incomes allows buyers to compete in higher priced tiers where competition is not as stiff.”
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 3.50 MBS) lost -11 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move slighter higher for the week.
Overview: We saw very weak demand for our 10 year note and 30 year bond auctions but MBS were mostly pressured (higher rates) due to strong jobs data (45 year low) and hawkish commentary by one of the major central banks. While we did see a temporary spending bill, the overall downward trend of MBS since January 1 (-187 BPS) kept fixed mortgage rates on an upward trend.
Jobs, Jobs, Jobs: Initial Weekly Jobless Claims hit 221K vs est of 232K. The more closely watched 4 week moving average dropped to 224,500 which is A 45 YEAR LOW. The December Job Openings and Labor Turnover Survey (JOLTS) showed 5.811M jobs that are currently unfilled. The market was expecting 5.9M. November was revised upward from 5.879M to 5.978M. The lack of labor slack continues to be a major problem.
Can Kicked: We had a brief government shut down in the wee hours of the morning but have since rebooted. The Senate passed their pork-laden bill with ease while the house had a mini rebellion of 67 conservatives voting against the bill. It funds the government only until March 23. It added money and time to defense spending and upped the borrowing authority until 2019. Its an awful deal that jacks up our deficit but it keeps the doors open for a little longer.
Great Brittan: Bank of England kept rates unchanged at 0.5%, and QE flat as expected in a unanimous 9-0 vote. But BOE raised its growth forecast and said that the “Committee judges that, were the economy to evolve broadly in line with the February Inflation Report projections, monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November Report, in order to return inflation sustainability to the target.”
What to Watch Out For This Week: