The EMG Blog

PAYMENT PROBLEM – 10/18/21

During the Housing Boom peak of 7/2006, it took 42% of median household income to cover mortgage payments on a median-priced house. That percentage bottomed at 26.9% in 1/2013 and peaked at 32% in 11/18. In 2019 and 2020, the Fed lowered rates, dropping the ratio to just 28.6% in 8/2020. As of 7/2021, that ratio is (gulp) 32.1%, its highest level since 11/08, despite super low interest rates. (Source: Dr. Elliot Eisenberg, the Bowtie Economist).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

VACCINATION VARIATION – 10/11/21

Over the last eight months, Covid-19 vaccination rate disparities between racial and ethnic groups, no matter how defined, have disappeared. However, gaps reflecting political affiliation have widened precipitously. At present, among those 18 and over, 92% of Democrats, 68% of Independents and 56% of Republicans have been vaccinated. This suggests attitudes towards vaccinations are now part of the political divide and that 15% to 20% of adults will remain unvaccinated. (Source: Dr. Elliot Eisenberg, the Bowtie Economist).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

SOLID SAVINGS – 10/4/21

From the dotcom bust in 3/01 to the Housing Bust in 1/08, household savings rates steadily fell from 6% to just 3%, of course house prices were skyrocketing. From the Housing Bust through 12/14, savings rates rose to 8% and remained there until Covid-19. Now, after bouncing wildly for 14 months due to massive government programs, the rate has settled at a significantly elevated 10%. A permanent or temporary rise? (Source: Dr. Elliot Eisenberg, the Bowtie Economist).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

FOURTH QUARTER – 9/27/21

Over the last 30 years (1991-2020), the S&P 500 index has gained an average of +4.78% (total return) over the final 3 months of the year (October-November-December), the best gain of the 4 quarters.  24 of the last 30 fourth quarters (80%) have produced a positive total return gain.  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

BUYERS ARE LOOKING FOR A PERFECT HOME – 9/20/21

Real estate investors were involved in 17% of the home purchases (1 out of every 6 sales) during the 2nd quarter of 2021.  The investors have taken advantage of historically low interest rates to finance upgrades on their purchases, and then realize a profit by reselling to a pandemic-weary buyer who is looking for specific features in his/her new home (source: Redfin).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

NATIONWIDE AVERAGE – 9/13/21

The value of a single-family home in the United States increased by an average of +17.4% over the 12 months from 6/30/20 to 6/30/21 (source: Federal Housing Finance Agency).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

IN THE YEAR 2033 – 9/6/21

Social Security trustees announced on 8/31/21 that the trust fund backing the payment of Social Security benefits (OASI retirement benefits) would be zero in 2033.  A zero “trust fund” does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 76% of their originally promised levels through the year 2095.  When the trustees released their report in 2010 (i.e., 11 years ago), the Social Security Trust Fund was projected to be depleted in 2040 (source: Social Security Trustees 2021 Report).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

BRAND NEW HOMES – 8/30/21

The median sales price of a new home sold in the USA in June 2021 was $390,500, an all-time record high both on a nominal basis and on an inflation-adjusted basis.  The old nominal record was $374,400 in April 2021.  The old inflation-adjusted record was $345,800 in May 2017, equal to $383,898 in today’s dollars (source: Census Bureau).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

NOT A LOT ARE USING IT – 8/23/21

As of Sunday 8/08/21, 1.8 million home mortgages are using the forbearance protection made available to them through the 3/27/20 CARES Act, or just 3.26% of the 56.1 million home mortgages that exist nationwide (source: Mortgage Bankers Association).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

WILL IT BE ABOVE AVERAGE? – 8/16/21

The average change that American homeowners are anticipating in the value of their primary residences over the upcoming 12-months is a gain of +5.1%, more than the actual gain of +4.1% per year that has been achieved over the last 20-years through 4/30/21 (source: July 2021 Survey of Consumer Expectations Housing Survey, Federal Housing Finance Agency).

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.