Market Studies

The net revenue for Chase in Q2, $24.5 billion, was down by 3 percent year-over-year, largely due to a drop in mortgage banking revenue and lower CIB Markets revenue related to business simplification. Chase's mortgage banking net income declined by 20 percent in Q2, down to $584 million.

About 75 percent of millennials, commonly known as generation Y, would rather apply for a mortgage loan with a traditional bank as opposed to an alternative lender or nonbank institution, according to the survey, indicating that millennials think more like their parents when it comes to obtaining financing for a first home.

Non-revolving consumer credit outstanding grew at a seasonally adjusted annual rate of 7.0 percent during May (about $174 billion), which was about 0.8 percentage points faster than the rate at which it grew in April.

The survey found that home price change expectations rose to 3.5 percent, their highest level this year, and median earnings growth as well as household spending growth expectations increased from the prior month. Median consumer inflation expectations at both the short and medium term horizon continue to be stable, while labor market expectations also continued to improve and credit availability expectations were largely unchanged.

Among the reasons for participating in a like-kind transactions, survey respondents and their clients noted deferral of capital gains taxes, equity to acquire additional properties, estate planning, portfolio diversification, and completion of a development project.

The author called first-time homebuyers “inherently different from repeat homebuyers. They are younger and have lower credit scores, lower home equity, and less income and, therefore, are less likely to withstand financial stress or take advantage of financial innovations available in the market than repeat homebuyers.”

Residential mREITs have been forced to find alternatives in order to maintain target dividends, due to the current environment of margin compression with high-yielding bonds replaced with lower-yielding securities while the cost of funding has stayed the same, according to KBRA. The Agency believes that mREITs have two choices in the situation—increasing leverage or diversification.

The Total MCAI, which was benchmarked to 100 in March 2012, declined by 0.5 percent in June down to 122. The Conventional MCAI experienced the greatest decline in June (by 1.0 percent since May) out of the four component indices of the Total MCAI.

The increasing number of first-time homebuyers is another factor driving up the demand for housing, according to Realtor.com. Many of those first-time buyers are millennials who have been sidelined by the challenging market conditions.

Optimism among consumers about the housing market has reached new survey highs and strong job and income growth are making consumers appear more favorable in the selling market, indicating a possible increase in the existing home supply.