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Housing demand falters in the US as prices and interest rates rise

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Since the end of 2017, the number of American prospective homebuyers has steadily fallen, according to the latest Housing Trends Report (HTR) from the National Association of Home Builders (NAHB).

“Home price gains and rising interest rates are slowing down the housing market, particularly in high-cost areas and among first-time buyers who are more severely impacted by price increases,” NAHB chief economist Robert Dietz recently told Livabl.

Some 13 percent of American adults are planning to buy in the next year, and most (58 percent) of these prospective buyers would be first-time homeowners — mostly unchanged from previous quarters.

This was down from nearly 25 percent in the fourth quarter of 2017, and down from 14 percent last quarter. Since 2017, demand has steadily fallen 11 percentage points.

Millennials (19 percent) were the most likely generational group to buy in the next 12 months, followed by Gen X (13 percent).

Unsurprisingly, most of the share of Millennials planning a home purchase are first-time home buyers (75 percent), while 48 percent of would-be Gen X buyers are attempting home ownership for the first time.

More than 40 percent of buyers in each generation are already actively searching for a home.

“These results are not surprising, given that mobility rates decline significantly with age: according to the Census Bureau’s 2017 Current Population Survey, 18 percent of those under 40 years of age moved in the previous year, compared to 9 percent of those 40 to 49 years old,” reads the report.

Of those planning a purchase, nearly half are looking at existing homes, while only about 18 percent are looking at new construction. Across the generations, about 40 percent of prospective buyers report they are looking at existing homes first for purchase.

Just over 40 percent of Millennials prefer existing homes compared to 18 percent who favor new construction.

Most buyers think home searches will get harder or stay about the same in the next year, and most believe there are fewer (or about the same) number of homes for sale now that just three months ago.

Affordability continues to be an issue for Americans of all ages — nearly 80 percent of all buyers can afford fewer than half of all the homes available in their markets. And about 80 percent of Millennials and Gen Xers can afford can afford fewer than half of all the homes available in their markets.

The national homeownership rate rose half a percentage point from last year to 64.4 percent at the end of the third quarter of 2018 as Millennials returned to the for-sale housing market, where gains in home price appreciation are starting to slowing down.

The HTR is based on the results of a poll of over 20,000 prospective American homebuyers conducted between September 25 and October 8, 2018.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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