Home Sweet Home

Spring into action with targeted mortgage services.

March 24, 2014

Spring is beginning to show its face, ushering in warmer temperatures, singing birds, and the occasional baby bunny.

While some see this as the time of year to freshen their surroundings as they experience a burst of spring-cleaning energy, others among us will don shiny colorful galoshes and seek out opportunities to jump in puddles left behind by April showers.

Yet another harbinger of the season will be the sudden proliferation of “for sale” signs sprouting up on lawns nearly as quickly as the blooming tulips and daffodils.

This week our research findings examine facets of the current housing climate with a discussion of how various generations perceive and respond to the responsibilities of a mortgage payment, a policy change that may soon impact consumers, and an update on foreclosure trends.

Spring into action and put out the welcome mat for your members by understanding how these trends impact their utilization of your mortgage products and services.

“Home is where one starts from.” (T.S. Eliot)

As noted by the Federal Reserve Bank of St. Louis, older home-owning families have weathered the economic storm better than young families.

“The main reason young families’ balance-sheet recovery lags is the recent housing crash and its lingering effects. The homeownership rate among younger families has plunged . . .”

Prevalent foreclosures or other distressed home sales have greatly impacted younger consumers as they do not enjoy the previous equity gains experienced by older generations.  Indeed, “the primary cause of lagging wealth recovery in recent years among young families appears to be the massive decline in the value of residential real estate . . .”

This interesting report compares homeownership over time by various age cohorts, provides further explanation of slow wealth recovery, and summarizes that “. . . it appears unlikely that the overall homeownership rate will return to its peak level any time soon, if ever.”

Nonetheless, “young home buyers remain optimistic and see their home as a good investment, while older buyers are more likely to trade down to a smaller property to match changing lifestyles . . .” according to the National Association of Realtors

Findings of this interesting study about generational home buyers and sellers include:

How do older generations manage housing payments?  Learn “How a Mortgage Impacts Retirement Income” by planadvisor. 

It is more common for retirees to carry a mortgage as among those 55 to 64. “37% of people were retiring with mortgage debt in 1989, while 2010 saw that figure rise to 54%.”

Those between the ages of 65 and 74 experienced increased mortgage debt over the same time period, from 22% to 41%, while consumers age 75 or older with mortgage debt rose from 6% to 24%.

The article discusses the impact of mortgage payments on these individuals, and reveals that the tax implications of itemizing may not be advantageous since retirees often find themselves in a lower income bracket when existing on Social Security and retirement funds.

Furthermore, those intending to relocate to another state should consider that tax burdens are impactful, even in locations with lower taxes. It is suggested the pros and cons of carrying a mortgage need to be carefully considered by retirees prior to making loan commitments.

“There is nothing more important than a good, safe, secure home.” (Rosalynn Carter)

Mortgage interest deductions by state are also under scrutiny, says “An Analysis of the Geographic Distribution of the Mortgage Interest Deduction” by the Congressional Research Service.

Noting recent mortgage interest deduction proposals and “Understanding how the deduction’s benefits are currently distributed across taxpayers in different states may help Congress in assessing the potential impact on constituents.”

Results of this in-depth analysis “indicate that the benefits of the mortgage interest deduction are not distributed uniformly across the states.” 

Reasons for such variances include different rates of homeownership, housing costs, state and municipal tax policy, and regional incomes. 

Policy changes to facilitate uniformity of deduction benefits are discussed, along with the potential of resulting disruption to the economy and housing market.

“The home should be the treasure chest of living.” (Le Corbusier, architect)

Some mortgage holders struggle with problems in attempt to avert foreclosure, as noted by The New York Times in “Loan Complaints by Homeowners Rise Once More.” 

Companies servicing mortgage payments are to blame as, “shoddy paperwork, erroneous fees and wrongful evictions . . . are now cropping up among the specialty firms that collect mortgage payments.”

To worsen the problem, servicing companies wield power in making determinations about whether or not homeowners are candidates for loan modifications or subject to foreclosure. 

“And they have been buying up servicing rights at a voracious rate,” notes this interesting article that unearths an important issue for many homeowners.

Happily, in their examination of local market reports, the National Association of Realtors says, “rising home values and an improved economy changed the foreclosure picture dramatically over the last two years.”  

Between third quarter 2012 and 2013:

One last examination of foreclosure trends is at Here discover “Top 20 Metros with the Largest Foreclosure Rates.”

“Among the nation’s 20 most populated metro areas, the highest foreclosure rates were in Tampa, Miami, Baltimore, the Riverside-San Bernardino region of Southern California, and Chicago.”

The housing market impacts consumers in various ways, depending on their age, geography, and government policy considerations. Know how you can help make the difference with personalized outreach reflecting their unique needs and circumstances.

After all, isn’t it said that a person’s home is his or her castle?






Lora Bray is a research librarian at CUNA.