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How Millennial renters are poised to transform the US housing market in 2019 and beyond

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Millennial demand for homeownership was one of the biggest drivers of the 2018 US housing market, a trend that is likely to continue well beyond 2019, according to a new report by First American, a provider of title insurance to the mortgage industry.

“The housing market is already experiencing the earliest gusts of the tailwind caused by Millennials entering the market,” reads the report.

In the third quarter of 2018, households under 35 years old contributed the most to overall homeownership growth. The trend will likely continue to grow in 2019, as more Millennials age and begin to settle down.

“With more Millennials aging into their early-to-mid thirties, and beginning to get married, have children and form households, they will continue to be the primary driver of homeownership demand,” reads the report.

And although Millennials are the largest demographic group in US history, they also have lower homeownership rates compared to previous generations when they were under 35 years old.

Currently, just over one-third of adults under 35 own a home.

For many Millennials who are saddled with student loan debt, saving for a downpayment is a Herculean task, and renting is the more financially sound option.

Since the end of the Great Recession, close to 7 million new rental households have formed. Yet only 2 million new homeowner households formed over the same period.

“Because Millennials grew up in the wake of the housing bust, they are less likely to consider homeownership as a means of building wealth and, therefore, choose homeownership based more on whether homeownership fits their lifestyle or not,” reads the report.

Millennials have put off major life events — like marriage and child rearing — longer than previous generations.

According to Census data, in the 1970s, eight in ten people were married by the time they were 20 years old. Today, however, the same level of marriage does not occur until the age of 45 — delayed lifestyle choices delay the desire for homeownership.

But as 2018 draws to a close, demand from first-time buyers is starting to surge as more Millennials age into their prime settle down and get married years.

Millennial males — both single and married — were listed as the primary borrower on 60 percent of all closed loans in October while women (single and married) were listed on 32 percent, according to the most recent Millennial Tracker from the government-backed mortgage processor Ellie Mae.

And, more than 50 percent of all purchase mortgages originated by the government-sponsored enterprises Fannie Mae and Freddie Mac went to first-time home buyers in 2018.

“Although housing prices and interest rates are still rising at a faster pace in 2018 than they have in previous years, those trends are not yet stopping Millennials from purchasing homes and putting down roots,” Joe Tyrell, executive vice president of corporate strategy for Ellie Mae, recently said in a statement.

Millennials aging into their thirties is poised to have a “profound impact” on the overall housing market.

Over the next 10 years, aging Millennials are expected to purchase “at least” 10 million new homes, according to Census Bureau and First American calculations. And by 2060, it is estimated they will have turned out more than 20 million first-time home buyers.

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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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