Who is most likely to have home buying as a goal this year? Will remodeling and home improvement spending continue to grow? We look at this and more in this week’s roundup of real estate news.
Four Percent List Home Buying a 2019 Goal
Four percent (about 10 million Americans) said buying a new home was their main financial goal for the year — and millennials were the most likely generation to claim that as a goal, a new Bankrate survey revealed.
Seven percent of millennials said they wanted to buy a home this year.
But that doesn’t mean financial goals aren’t being set. Bankrate’s survey revealed that about 89 percent of Americans have at least one goal for the year, with paying down debt being at the top of the list, with three in 10 saying that was their goal, followed by better budgeting (13 percent), saving more towards retirement (12 percent), saving more for emergencies (10 percent), getting a higher-paying job (6 percent), and investing more (5 percent).
But Americans are frequently more pessimistic about their personal financial situation this year, with 55 percent feeling that their finances will not improve over 2018. Twelve percent said they felt it would be worse, and 44 percent felt it would stay the same.
Nearly six in 10 millennials surveyed felt that their financial situation would improve, compared to 35 percent for older generations surveyed.
“Regardless of whether or not one is upbeat on financial prospects for the coming year, the fact is that more Americans need to make savings a priority,” Bankrate.com senior economic analyst Mark Hamrick said in a statement. “Too many are living paycheck-to-paycheck, even at a time when the economy has been broadly judged to be doing well. Savings rates continue to tick up, so now is a great time to shop around for a place to park, and add to, that emergency fund.”
Of those who felt their finances would be worse this year, 49 percent blamed Washington for their pessimism. Those who felt their finances would improve were less likely to credit Washington for that upturn (10 percent), instead citing things like getting a raise at work, having less debt, or making more money from savings and investments.
Remodeling and Renovation Growth Expected to Decline
Annual growth in the home remodeling and improvement market is expected to decline this year, the Leading Indicator of Remodeling Activity released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University revealed.
Gains in renovation and repair spending for owner-occupied homes are expected to shrink from 7.5 percent last year to 5.1 percent in 2019.
“Slowing house price appreciation, flat home sales activity, and rising mortgage interest rates are deflating owners’ interest in making major investments in home improvements this year,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “Continued slowdowns in homebuilding, sales of building materials, and remodeling permits all point to a more challenging environment for home remodeling in 2019.”
“Despite the growing headwinds, improvement and repair spending is still set to expand this year to over $350 billion,” says Abbe Will, Associate Project Director in the Remodeling Futures Program at the Joint Center. “But after several years of stronger-than-average increases, the pace of growth in remodeling activity is expected to fall back to the market’s historical average annual gain of 5.2 percent.”
Fresh Off Dallas Successes, Offerpad Launches in Houston
Fresh off its successes in Dallas, iBuyer Offerpad announced its first market expansion of the year would be in Houston, operating its services from new offices in The Woodlands. The company has also announced that it would expand to San Antonio later in the first quarter.
The tech-enabled real estate buyer and seller entered two markets, Dallas-Fort Worth and Tucson, in the final months of 2018.
In October, Offerpad announced that it would expand to several markets during 2019, and at the time it was available in 534 cities to an estimated 6.7 million home-owning households.
By the end of 2019, Offerpad predicts that it will operate in more than 1,143 cities.
“The company has a very concentrated vision to bring our real estate solutions to millions more people this year,” Trent Capps, Offerpad’s Texas regional market director, said in a statement. “Our start in Texas, with Dallas-Fort Worth, has far and away exceeded our expectations and we anticipate the same for our other Texas markets. In Houston, we began receiving home offer requests weeks ago, so we foresee huge success there, as well as in San Antonio later in the quarter.”
The Houston expansion means the company will be servicing 86 cities in the Houston area, including Pearland, Sugar Land, and Seabrook. The company says local experts will be adding Houston-specific knowledge to its algorithm-generated home valuation and offer prices. The company will also offers a free local move as part of its goal of streamlining the moving process for sellers.