Housing Inventory Making History in 2021!

Well, home values are at an all-time high, home equity at an all-time high, and interest rates are still at historic lows.   Who would have thought we would be in this position a year ago?  If you are thinking of selling your home, you may reap a healthy profit; however, if you are then to buy a new home you would be paying top dollar. 

New guidelines being put into play now are limiting the market on borrowers refinancing a second home or investment property. No bank or lender can exceed 7% saturation of these types of investments in their portfolio. Guidelines on the purchase of these types of investments have not stopped but have become much more expensive now.  If you have a second home or investment home and think of refinancing, please check with your lender that a product is still available to you.  

A little on the economy. The year got off to a strong start, thanks to a jump in retail spending and show little sign of slowing down. Consumers opening their wallets and spending freely this spring… It looks like GDP growth is going to come in even higher than expected: 6.6% this year, the best annual expansion since 1984. 

Chalk it up to progress against COVID-19 and the gusher of stimulus money flowing out of Washington. The cash Congress has already spent or is likely to spend can’t help but boost consumption and investment this year and into 2022. (Of course, the bill for that spending will come due eventually. There’s no free lunch.)

For now, the main things holding back the economy are supply constraints that are keeping businesses from producing as much as their customers would buy. Computer chip shortages, plastics shortages, shipping delays…the list goes on and on.

Another unexpected tailwind, state, and local government spending. At first, it seemed that 2020’s recession would cripple tax revenues and public spending, which drives 11% of U.S. GDP. But thanks to soaring home and stock prices, state and local tax collections actually managed to grow a bit in 2020. They’ll rise more this year as asset values continue to rise. Plus, states and municipalities are on tap to get $360 billion in direct federal aid…equal to about 20% of their collective budgets.

This is what is important to pay attention to

As the economy gets back to normal, so too will U.S. monetary policy. Look for the Federal Reserve to signal small steps in that direction this fall when it will announce the beginning of the end of its bond-buying program in 2022. Currently, the Fed is buying $120 billion per month of Treasury bonds and securities backed by home mortgages…its method for keeping long-term interest rates very low. Next year, it’ll gradually dial back those purchases, by $15 billion increments. Expect the Fed to serve notice of this sometime between Sept. and Dec. of this year, once it says that “substantial progress” has been made on lowering the jobless rate. Even a hint of the Fed ending its bond-buying could cause a jump in rates on longer-dated Treasuries, as markets confront the end of ultraloose monetary policy. “Free” money can’t go on forever, but investors have become attached to easy credit.

I hope all is well and please remember if you have some debt out there it may be a great time to consolidate debt and free up that cash-out flow while home values are high and the interest rates are still low.   Just click here so I could work up the numbers.  Talk soon.  Apply Today