DS News - U.S. Bank

86 cost of the median home-sale price across the nation. e report reveals that some of the fastest-moving markets in the nation aren't just on the coasts—they're in midwestern metros like Grand Rapids, Michigan. "Last year and earlier this year, Seattle, San Jose, and Denver were the hottest markets with homes selling in days, not weeks," said Daryl Fairweather, Chief Economist for Redfin. "ese metros have now been replaced by Grand Rapids; Omaha, Nebraska; and Indianapolis as the fastest markets in the country. is ac- celeration in Midwest metros is due to increasing demand, as new residents move inland in search of affordability, without an increase in homes available for sale." e report also shows that despite a drop in home sales in September from last month—with prices posting their smallest growth since the market bottomed out in 2012—the crunch in housing inventory may finally be loosening. According to the report, the median home-sale price was $292,000 across 171 metro areas. at's the smallest increase in prices since February 2012, when median home prices reached a low of $168,000. Still, for the first time in almost three years, the total number of homes on the market has increased year-over-year—if only a little—up 0.2 percent from September 2017. In terms of new homes listed, the number rose a solid 3.6 percentage points. e housing supply in Indianapolis, con- versely, has been falling by more than 10 percent per annum since Spring 2015. It fell a noticeable 19.7 percent this September compared to last year. In Grand Rapids, homes on the market fell 2.3 percent, a modest decline in comparison to the 5.6 percent decline a year ago, and even smaller compared to the 21.2 percent decline two years ago in September 2016. Two percent of those seeking homes in Grand Rapids on Redfin.com searched from outside the metro area, with the largest share coming from Detroit, Chicago, Los Angeles, and Washington, D.C. Indianapolis is also attracting homebuyers from more expensive cities, including Chicago, Los Angeles, and the Bay Area. Fairweather points to the fact that these expensive coastal markets saw a slump in sales by at least double digits. is has in turn kept price growth down nationwide and allowed for a greater net of sales in inland metros where more affordable housing—metro areas such as Pittsburgh, Pennsylvania, and Grand Rapids, Michigan—are seeing inventory continue to tighten. "Rising mortgage rates, paired with already- high home prices, are giving pause to home- buyers in the expensive West Coast markets," Fairweather said. "Some of these places are finally seeing the number of homes for sale surge after years of a supply drought. But buyers who earlier this year would have put in a bid on any home in their target neighborhood are now being more choosy. With home prices growing slowly, buyers want to be absolutely sure that the home they buy is a home they will stay in for years to come." MINNESOTA Minneapolis Proposal Explores Tiny Home Community e city of Minneapolis may be thinking small when it comes to solving its homeless- ness problems. As reported by Minneappolis' StarTribune, the city has floated the concept of building a community of so-called "tiny homes" as a means of providing affordable living options for homeless and poor members of the com- munity. e project would see the construction of the Envision Community populated by "tiny homes," each with floor plans of only a few hun- dred square feet each. e homes would be de- signed to be both cheap and affordable, and the first phase of the project, if approved, would be targeted for completion sometime in Fall 2019. e community would ideally be developed on a vacant property located "close to public transit in Minneapolis," the StarTribune reports, and would accommodate "18 to 36 people." e project also has the backing of area doctors from Hennepin Healthcare, who, the StarTribune reports, "threw their support be- hind the concept after seeing how often patients turned up at the hospital with troubling and costly medical problems attributable to being homeless." e project is in its early stages, however—it still has an uphill battle to secure funding, approvals, and ensure that it conforms to local zoning ordinances. However, Minneapolis isn't alone in proposing communities of tiny houses as a way to combat homelessness and affordabil- ity challenges in the current market. As reported by CNN last February, the non- profit Veterans Community Project is working with Kansas City leadership to create a small community of tiny homes designed specifi- cally to get homeless veterans off the streets. Similar "tiny homes-for-the homeless" projects are unfolding in communities around the country, including e Block Project in Seattle, Washington. IOWA The Midwestern Millennial Matchup A recent survey by GOBankingRates cal- culated which states are the most and least af- fordable for millennials. West Virginia stands as the most economical choice for millennials, according to the results, but the Midwest dominates the rest of the top five, with Iowa coming in second, followed by Ohio, Mis- souri, and Indiana. To rank which states were the most afford- able for millennial homebuyers, GOBanking began at a base figure of $60,932, the national median income for this age group. It then assumed that they saved 20 percent of their salary each month for a down payment. From there, it could easily determine the time neces- sary to afford a 20 percent down payment and calculate the estimated monthly price of a 30-year fixed-rate mortgage. Iowa's median list price was $179,000, or $20,000 more than West Virginia. e average down payment is $36,000, but millennials in Iowa on average earn slightly more than their cohort's national average. Monthly mortgages in Iowa cost $995 on average. Ohio ranked as the third most affordable state, having an average median list price of $169,000—$10,000 less than in Iowa—and monthly mortgages averaging only $948. ese numbers are lower than Iowa's, but this is off- set by the fact that millennials there on average earn less—$55,894 per year. Missouri and Indiana ranked fourth and fifth on the list, both with an average median list price of $180,000 and monthly mortgage payments of $1,000. On the other end of the spectrum, Hawaii was the least affordable of all 50 states, with an average median list price of $615,000 and a monthly mortgage payment of $3,256. Mil- lennials living in Hawaii earn $12,000 more than their national cohort, but even so, the mortgage payments for the average millennial homebuyer in this state is more than 50 percent of their total income. e other least affordable states are California, Massachusetts, Oregon, and Washington. MICHIGAM Grand Rapids Sees Homebuying Surge Redfin has released a report, the Redfin Estimate, which tracks the average monthly

• Cover