Industry Wrap: Young Adults Are Earning More, Starting to Buy Homes
By Laura Haverty | February 04, 2016
Thursday’s Industry Wrap summarizes important news and events each week from around the housing finance industry. Material on external websites may be subject to publisher’s access policy.
Safe and Sound Flexibility for Shared-Household Borrowers
Fannie Mae released an FM Commentary earlier this week on how its HomeReady™ mortgage product helps lenders serve the needs of today’s borrowers, including those living in shared households where several adults contribute to the household income. “Since we announced HomeReady in August, Fannie Mae has heard this question from our lenders and others: ‘Doesn’t the non-borrower household income flexibility add risk?’” writes Jonathan Lawless, Fannie Mae’s vice president of single-family analytics and affordable housing. “Based on our research, Fannie Mae believes that allowing the existence of non-borrower income to be considered when qualifying the borrower for a HomeReady mortgage helps to expand access to mortgage credit for creditworthy borrowers without adding incremental risk,” he adds. (Read FM Commentary, view research)
Homeownership on the Rise After a Decade of Decline
According to the Census Bureau, the share of Americans who own their homes was 63.8 percent in the fourth quarter, up from 63.4 percent in the previous three months. Per the Census Bureau’s fourth quarter report:
- For homeowners 35-44 years of age, the homeownership rate increased the most, from 58.1 percent to 59.3 percent.
- For homeowners 65 and older, the homeownership rate rose from 78.7 percent to 79.3 percent.
- For homeowners 45-54, the rate rose slightly, from 69.9 percent to 70.1 percent.
- For homeowners 55-64 years of age, the homeownership rate fell, from 75.3 percent to 75.2 percent.
Recent College Grads Finding Jobs, Earning More
The Federal Reserve Bank of New York has launched a user-friendly web interactive that sheds light on trends in the labor market for recent college graduates, including new data on unemployment, underemployment, labor demand and wages. Users can compare the unemployment rate of recent college graduates, defined as 22-27 years old with at least a bachelor’s degree, with that of other workers. Users can also monitor the underemployment rate for recent college graduates who are working in jobs that typically do not require a college degree. Additionally, the interactive includes data on differences in labor market outcomes, including wages, among 73 college majors. (View interactive)