Lew Sichelman
Having a run-in with the law is one of the quickest ways to disqualify yourself from homeownership.
According to research from a Rice University sociologist, getting arrested just once can keep aspiring owners from buying a house as quickly as their peers.
Using data from the 1997 National Longitudinal Survey of Youth, assistant professor Brielle Bryan found that Millennials who had any form of contact with the criminal justice system were less likely to own a home as quickly, and for as long, as their peers who had no criminal justice contact. That held true regardless of race, education and socioeconomic status.
“It was surprising the see that even low-level contact with the criminal justice system appears to be detrimental to homeownership prospects,” she said in a recent edition of Cityscape, a Department of Housing and Urban Development publication.
Build a Down Payment Fast
Moving back home is probably the last thing young adults want to do. But it has its benefits.
Mom may not do your laundry, Dad may ask where you’re going whenever you leave the house, and you might have to live under your parents’ rules. At the same time, though, you could accumulate enough cash for a down payment on a house of your own – and leave the nest for good.
It all hinges on whether your folks charge you rent. If they don’t, and if you bank what you would have been paying for a one-bedroom apartment, according to an analysis from realtor.com Chief Economist Danielle Hale, you could have enough for a 5 percent down payment on a typical house in less than a year. Based on the national median rent for a one-bedroom unit ($1,533 a month) and the national median house price ($327,000), it would take just 11 months to save enough for 5 percent down (just shy of $17,000).
Of course, it will take longer in places where prices are higher. Across the 20 largest metros, it would take an average of 15 months to accumulate a 5 percent down payment, based on home prices and rent savings in each market. The 11-month scenario holds up in Chicago, Philadelphia and St. Louis, but it could take twice as long – up to 22 months – in Los Angeles, San Francisco and San Diego.
These costs could be the reason behind another new set of research results. While you wouldn’t know it from the way would-be buyers are fighting over every house that comes on the market, but according to a Bankrate.com survey, millions of people have put off their home searches.
Some said they’ll hold off until next year before restarting the hunt. But a significant portion said they’re finished with the process indefinitely
New Federal Flood Rules
With a new federal risk-rating system set to begin in October, now might be the time to review your flood insurance coverage. Especially in the states where the cost for National Flood Insurance Program coverage will increase.
A new analysis from ValuePenguin said some 3.8 million homeowners will see their premiums rise under the Federal Emergency Management Agency’s new ratings.
FEMA’s rate changes promise to correct the problem of policyholders paying rates that don’t reflect their true risk levels, said ValuePenguin’s Andrew Hurst. But rate increases will be moderate. Existing limits on annual rate hikes are still in effect, so most won’t exceed 18 percent.
The largest proportions of homeowners who will see increases are in Hawaii (87 percent), Texas (86 percent), Mississippi (84 percent), West Virginia (83 percent), Florida (80 percent) and Louisiana (80 percent).
Overall, about 193,000 homeowners will be hit by the highest premium hikes. And about 1.2 million owners will benefit from lower premiums.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.
