2019 vs 2020: Important Changes to VA and FHA loans

Mortgage Mom Radio airs weekly focusing on topics that will educate our listeners around mortgage lending. Today we revisited 2019’s FHA and VA loan workshop, stopping it along the way to cover what has changed since just last year.

The Future of Homeownership

In a recent survey involving more than 100 economists, Zillow found that housing experts share the opinion that Generation Z is likely to become homeowners at a higher rate than millennials. Millennials are currently in the prime years for purchasing a first home, and yet homeownership among the group has fallen. Gen Z is currently 23 and younger, but in 15 years when they reach the age millennials are now, 45% of the economists polled believe over 60% of them will be homeowners.

One of the reasons for the increase in homeownership is that the inventory crisis that makes it challenging for current buyers to afford a home is expected to resolve itself. In addition, economists believe that Gen Zers will be more likely to live in affordable areas versus the millennial generation who are drawn to expensive urban neighborhoods.

Another contributing factor is that Gen Z is expected to enter the job market during an upswing in the economic cycle, although time will tell how the current pandemic will impact the economy long term. Millennials were coming out of college and entering the workforce right as the economy went into recession, creating income-related hurdles and career challenges.

A recent study of Gen Z found that the majority of the Gen Z members polled prefer to move to diverse communities and want features like backyards with decks or patios for outdoor entertaining, open floor plans, garages, and hardwood flooring. Though members of this generation are digital natives, only 17% of respondents indicated that smart-home technology was an important feature for them. Forty-six percent, nearly half of all respondents, said they want a single-family home, while only 7% want a townhome, 5% want a multi-family unit, and 5% want a condo.

Despite being better connected than previous generations, Gen Z is often referred to as the loneliest generation. It comes as no surprise then that one of their top priorities for a home is having entertaining spaces both inside and outside the home. They want large outdoor spaces for spending time with friends and family as well as open floor plans to optimize the space in their homes.

If you have any questions regarding home loan rates or products, give me a call. I’m always happy to help.

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Debbie Marcoux is licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, NMLS ID 237926, also licensed in AZ-0941504, GA-69178, IL-031.0058339, NV-57237, OR, TN-184373, TX, WA-MLO-237926 | Heidi Slagle-Points CA NMLS ID 1666881

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