Many industry watchers feared a housing bubble was on the horizon, but the most recent numbers to be released by MGIC Investment Corporation — a primary insurance provider for more than one million U.S. mortgages — shows that there’s little cause for concern in the near term.
To the surprise of many, MGIC reported that the number of insurance policies continues to rise while delinquencies continue to decrease. Their August press release showed that their insurance in force actually increased by 4.6 percent up to a whopping $179.1 billion.
Mostly Good News
The inventory of beginning primary delinquencies dropped almost 21 percent from August 2015’s total of 66,121. New delinquency notices fell from the August 2015 total of 6,242 down to 5,753 during the same month in 2016 — a 7.8 percent drop.
However, there were 15 percent fewer cures. There was also a 14.5 percent dip in “paids” — down to 1,093 from 1,279 in August 2015. Recessions and denials dropped as well.
The inventory of ending primary delinquencies fell more than 20 percent.
What About Millennials?
With all the good news swirling around the housing market, it would be easy to forget that there’s still a huge section of the American populace being left behind: millennials.
According to a new report from author and real estate consultant, John Burns, that’s exactly what’s happening. Rates of homeownership have dropped in all age groups since the housing marketing implosion in 2009, but the millennial generation experienced the biggest decline.
Burns projects homeownership rates to continue to decrease all the way through 2025, which means the under 40 set could end up renting much longer than their parents’ and grandparents’ generation did.
Looking all the way ahead to that 2025 marker, Burns gives the U.S. housing market a very slim chance of returning to pre-collapse homeownership rates. In his report, he predicts that the rate will drop to just below 61 percent by the middle of the next decade. That would be the lowest mark since the 1950s.
That gloomy forecast includes the assumption that 16 million people born post-1960 will buy homes and 10.5 million people born pre-1960 will pass away or otherwise lose possession of their property — an almost 5.5 million net gain.
That leaves a sizable decline predicted for the younger generations. 2025 is still a long way out, but it’s shaping up to be a rough decade for millennial renters and hopeful homebuyers.
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