Market Studies

While waiting for the Fed to raise rates, banks will likely place "additional focus on cost controls to improve operating efficiencies and extend balance sheet duration" to reduce margin compression, according to a recent report from Fitch Ratings. Bank margins have fallen to 3.02 percent as of the first quarter of 2015, the lowest average since 1984, the Federal Deposit Insurance Corporation said.

Vacancy rates in rental housing were highest outside of Metropolitan Statistical Areas at 9.2 percent and were lower in principal cities at 7.7 percent and suburbs at 6.2 percent. The homeowner vacancy rate was also highest outside MSAs at 2.5 percent and was slightly lower inside principal cities at 1.9 percent and in the suburbs at 1.7 percent.

According to Smoke, 32 percent of millennials were homebuyers this year, while 18 percent were sellers. On the one other hand, 40 percent of millennials own a home, while 60 percent rent.

In New Jersey, 16.2 percent of consumers have seriously delinquent debt (90 days or more overdue) or debt that was in third-party collections, compared with the national rate of 20 percent for the reporting period. New York and Connecticut also reported overall consumer distress rates (14.8 percent and 14.9 percent respectively) lower than the national rate.

On a national level, several economic conditions influence today’s market such as home price growth outpacing rent growth since 2012 (favoring the rent side of the equation) and interest rates returning to historic lows after reaching 4 percent of higher in 2013 and 2014.

The market share of non-depository, independent mortgage companies tumbled after the Great Recession with the collapse of the mortgage and secondary markets—especially those companies that were focused on subprime lending. In 2014, the market share of independent mortgage companies rose to 47 percent for home purchase loans and 42 percent for refinance loans, the highest those shares have been at any point in the last 20 years, meaning nonbank mortgage companies have more than regained their market share they lost due to the Great Recession

The predicted moderate economic expansion does not change the Conference Board’s outlook for housing, which is largely positive. Ozyildirim told DS News earlier in the week that, “The single family housing market seems to be heating up, despite some potential volatility. Construction companies and workers are busy while home prices and mortgage rates remain favorable.”

"Buoyed by strong employment growth, housing supply is struggling to keep pace with demand, which is driving house prices higher," Kiefer said. "Fortunately, low mortgage interest rates are helping to keep homebuying affordable for some prospective homebuyers."

About 75 percent of the group surveyed said the current regulatory environment is indeed preventing them from lending to consumers who can afford and deserve a mortgage, while 25 percent said today’s regulatory environment does not prevent such lending. One anonymous respondent said, “We punish the whole for the actions of a few.”

“It’s important for all people to understand the effect of life milestones on their credit so they can put themselves in a position to reach personal and financial goals," said Ken Chaplin, SVP at TransUnion. "This survey reveals that many people, especially younger adults, may not be prepared for how certain events, such as marriage, buying a home or getting a car could alter their credit scores.”