Today’s Tea: Condos are Becoming More Popular

Facts:

• Condominium loans represent only about 8 percent of total mortgages. However, CoreLogic says they may play a much larger role in the future.
• Average Condominium marketing time is 60 days, the shortest since CoreLogic began tracking it in 2000.
• Americans aged 25 to 27 are now entering the housing market.

As millennials gain more buying power and seek a place to call their own, evidence suggests the condo market will be in higher demand than it has been in the last two decades.

Currently, condo loans only represent about 8% of total mortgages. However experts at CoreLogic believe this number is going to grow. The average marketing time of condos is now 60 days, the shortest since CoreLogic began tracking this information in 2000.

It comes as no surprise that millennials entering into a high priced market would opt for a condo rather than a single family residence as their first home. With over 75 million, millennials are the largest generation in US history and account for almost 25% of our population. Investors should continue observing buying trends of this generation and the condominium market as it is expected to grow.

Because of the expected growth in the condo market, regulators have began relaxing some of the guidelines associated with condos, allowing lenders to avoid unnecessarily strict underwriting. One of the largest changes is their removal of the ban on projects with pending litigation as long as it does not pose a threat to the projects financial stability. Other notable changes include increasing allowable commercial space in condo developments and streamline underwriting for small loan-to-value loans.

For more information on condos or loan  pre-qualification, fill out our contact form below.