The Dogless Days of AugustThe dog days of August are a time when everything slows down. People are on vacation and those who stay home are moving slowly because it is so hot. But not this year. This August, there seems to be no letup in the markets and the news. Do you want news? How about a Presidential election occupying the front pages every day? We also have the Olympics going on in the midst of a Zika virus alert and a doping scandal.
The markets are making a lot of noise as well. The stock market has bounced back from the shock of Brexit and set new records. Oil prices have plunged back to near $40 per barrel and interest rates have hovered near record lows. Even though the economy seems to be dragging, the jobs creation machine has not slowed down one iota, and the real estate market continues to show strength. There is so much going on that we wonder how things could get any livelier come September when we are supposed to wake up from our summer slumber.
One things for sure, the Presidential election will be heating up come September. We will also start the month with another jobs report released early before Labor Day. And just for good measure, the Federal Reserve Board will be meeting and this should be their last chance to raise interest rates before the election. We say that it is the last chance, because the next meeting after September is just a few days before the election, and we don’t expect the Fed to take any major stance at that time. It has been a busy summer season and it looks like things will stay hot this fall. And we are not talking about global warming here.
Are millions of homeowners sitting on much bigger equity nest eggs than they think? Do you know how much equity you’ve got? If not, could you be missing opportunities to tap into it for worthwhile projects at close to all-time low interest rates? Academic and financial industry research suggests that large numbers of Americans don’t keep track of their equity and don’t really know how they could use it. That’s curious because home equity has almost never been higher or easier to access. The Federal Reserve estimates that, thanks to rising prices and principal paydowns, total home equity surpassed $13 trillion in the first quarter of this year, more than double what it was in 2011. Black Knight Financial Services estimates that $4.4 trillion of equity is immediately “tappable,” that is, owners can withdraw funds via equity credit lines, equity loans and cash-out refinancing, and still retain a healthy equity cushion in their homes. Equity is the difference between the market value of your home and the total debt you’ve got against it. A $350,000 house with $175,000 in debt has equity of $175,000, a 50 percent equity position. Thirty-eight million owners nationwide have at least 20 percent equity, averaging $116,000 per owner, according to Black Knight. Many lenders will allow owners to tap into that equity to the extent that their total debt does not exceed 80 percent of the home’s appraised value. But before any of that happens you need to know the basics about equity, starting with how much you’ve got. Source: Ken Harney, The Nations’ Housing — Would you like to know what means are available to ball-park your equity without a formal appraisal? Contact us.In recent months, there has been a well-publicized shortage of affordable homes for today’s first-time buyers. That situation may soon change, much to the relief of young consumers anxiously waiting for available homes they can afford. News reports carried on Builder online and by the National Association of Realtors point to a new trend that could result in many new homes keyed to the needs and qualifications of first-timers. It noted that the number of homebuilders offering entry-level housing rose 25 percent last year compared to the year prior. “Since the recession, the number of new entry-level homes plummeted. Builder online even declared the starter home ‘nearly extinct’ last year. “However, the analysis of the 2016 Builder 100/Next Builder list points out an increasing number of builders are devoting at least 50 percent of their business to building entry-level homes. While the numbers are rising, the entry-level market is still a fraction of what it once was in 2010.” Still, “the re-entry of the entry-level buyer has begun, but this group’s next moves will be gradual,” says Metrostudy’s Brad Hunter about young buyers’ emergence into the housing market. Source: Chicago Daily Herald
Big cities across the U.S. are seeing their post recession population surge slow as Americans uproot for new jobs and suburbs regain some of their appeal. Census Bureau figures show the top 50 cities accounted for 20% of the nation’s population growth for the 12 months ended July 1, 2015. That figure is down from 21% the prior fiscal year, and has slid each of the years since 2011, when cities accounted for 26.7% of U.S. population growth. U.S. cities have experienced a population surge since the recession ended in 2009 as revitalized downtown cores drew millennials, empty nesters and immigrants with lower crime, pedestrian-friendly environments and job growth. That growth is slowing as a bulge of late-20s Americans reaches prime homebuying age and high urban real-estate costs are making suburbs and exurbs more attractive, according to economists and demographers. Source: The Wall Street Journal