Brexit? Smexit! Stocks Hit RecordsJust over two weeks removed from the Brexit vote, our stock market reached record highs. The S&P rallied to a record on Monday of last week and the Dow followed by hitting its record on Tuesday. Even more importantly, this dramatic bounce back from the lows recorded after the Brexit vote has come with rates not rising much from the lows they hit post-Brexit. In other words, we are back to the “best of both worlds” scenario with record low rates and record high stock prices.
The next question is–how long can this euphoria last? While there are many indicators which could supply us with evidence with regard to the stock market, one of the most important indicators is occurring right now. Companies are now reporting profits for the second quarter. One reason the stock market has stagnated in the past year is the fact that corporate profit growth has slowed down. Thus, the market analysts will be watching these profit releases even more carefully than usual.
With regard to our record low interest rates, it will be interesting to see if the good rate news will continue if the stock market continues the rally. Certainly, these low rates can boost stocks, but if stocks keep rising, this could put upward pressure on rates — a process which has already started. If the economy keeps humming along in spite of the situation overseas, we could also see the Federal Reserve considering another rate increase. All in all, it could be a very interesting summer as consumers rush to take advantage of the most recent sale on the cost of money.
Many renters would be better off buying a home than continuing to pay steep rental costs, finds a new study. The monthly payment on a median priced home is more affordable than the monthly fair market rent on a three-bedroom property in 76 percent of the U.S. counties, according to RealtyTrac’s Residential Rental Property Analysis, which encompassed 461 counties nationwide with populations of at least 100,000. Overall, Researchers found that fair market rents represented 28 percent of the estimated median household income, while monthly house payments on a median-priced home – which included a 10 percent down payment and property taxes, home insurance, and mortgage insurance – represented 24 percent of the estimated median income. “From a purely affordability standpoint, renters who have saved enough to make a 10% down payment are better off buying in the majority of markets across the country,” said Daren Blomquist, vice president at RealtyTrac. Of the 461 counties analyzed, 351 had house payments on a median-priced home in the first quarter of this year that was lower than fair market rents on a three-bedroom home. Source: RealtyTrac Note: This study did not necessarily take into account the fact that a portion of the mortgage payment goes to reduce the principal on the loan, building equity for the homeowner–while the entire rent payment goes to the landlord. Want to see how principal reduction, tax benefits and inflation affects the comparison? Contact us for an example–and a free individual analysis.Using a drone to capture listing photos and videos or inspect properties is about to become significantly easier now that the federal government has finalized its long-awaited regulations over the commercial use of unmanned aerial vehicles. The final rule issued by the Federal Aviation Administration paves the way for people who obtain a remote pilot certificate to operate UAVs that weigh less than 55 pounds, as long as the aircraft remains within visual line-of-sight. Earning the certificate will involve passing a test of aeronautical knowledge at an FAA-approved testing center — but it will not require applicants to have formal flight training. The FAA has, until now, required people wishing to operate drones commercially to obtain a so-called Section 333 waiver, and the agency has limited those waivers to people with a pilot’s license. That constraint has stood in the way of real estate professionals and others wishing to use drones in their businesses, despite the growing availability and decreasing cost of lightweight, remote-controlled aircraft equipped with cameras.Source: Realtor® Magazine
White Americans no longer account for the majority in hundreds of counties across the U.S., a trend transforming America’s social and political landscape as Latinos, Asians and blacks outpace white population growth, according to new census figures. The new figures point to a widening racial generation gap. While three-quarters of Americans age 55 and older are white, just 56% of those 18 to 34 are white, and only slightly more than half of minors are white, according to William Frey, a Brookings Institution demographer. These shifts will shape who wins this year’s elections, because in several battleground states, including Florida, Nevada and New Mexico, the racial generation gap is even wider than in the rest of the country. As of July 2015, the Asian population had grown 3.4% over the prior year while the Hispanic population rose 2.2% and the black population increased 1.3%. The non-Hispanic white population grew 0.1% during that time. Source: The Wall Street Journal