(NEW YORK, NY) — Mortgage rates dropped to their lowest level of 3.82 percent two weeks ago. This is the biggest drop in the last two years.
As a result, mortgage loan applications have soared with a 26 percent increase.
Specifically, mortgage loans for construction homes and refinancing loans have increased. They respectively have had a 20 percent increase in the last year and a 47 percent increase in the last week.
Will New Yorkers and Millennials care? Probably not
While the population of Staten Island is growing, New Yorkers are leaving Brooklyn and Queens. According to Bloomberg Business, this is the second year in the row, and it hasn’t only been the city but the entire state. This could lead to a loss in Congressional representation.
Why are they moving? Well, although the job market is increasing, income growth is low. Seventy-five percent of U.S. jobs created since the 2008-’09 financial crash also pay less than a middle-class income, according to an Axios analysis of U.S. Labor Department data. A StreetEasy survey cited high costs as many New Yorkers’ reason for leaving. As a result, according to Trulia, the number of home sales are decreasing and the amount of rentals are increasing.
Where are they going?
Funny thing is, they’re not usually moving to places less expensive. Last year, if they weren’t heading to nearby suburbs, New Yorkers moved to some of the most expensive big cities in high-tax states, including Los Angeles, Chicago, and San Francisco. More than half moved to different areas within their own boroughs.
Although many New Yorkers don’t complain about the affordability of their living space while they recognize the unaffordability of the city, the New York City Government is aware of the problem. According to their latest statistics, there are nearly one million households who earn less than 50 percent of Area Median Income (AMI), yet there are only 425,000 housing units available with rents suitable for that income level. This makes renting more of a bad idea, and those mortgage applications more attractive.