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R eal estate continues to rank at the top of the list of the best long-term investments for Americans, according to the latest annual poll from Gallup. About 35% of Americans picked it as their favorite investment, which has been the case since 2013. Meanwhile, Americans are less likely to view stocks or mutual funds as the best long-term investment, particularly waning after the COVID-19 pandemic struck the economy this spring. Twenty -one percent of Americans picked stocks as the best investment, down 6 percentage points from a year ago and at the lowest reading since Gallup started collecting such data in 2012. Only about one in six Americans view savings accounts or CDs (17%) and gold (16%) as their favored long-term investment. During the financial crisis of a decade ago, real estate was viewed as more risky, and gold finished first as the best long-term investment during that time. But as real estate values continue to climb in recent years, gold has faded and real estate’s investment potential has steadily risen in popularity.... Source: Gallup.com W e have just finished one of -- if not the weakest -- quarter in history. The corona virus is still raging. Millions have lost their jobs. Yet the stock market continues to rise, recovering from its lows hit early this year. Thus, the question is -- why? There are many possible explanations for the equity market's resilience, but we will pick just two of these. First, the markets are not looking at today, but the future. And those buying stocks are predicting a brighter future. To that end, the stock market has a history of doing well in troubled times, with many analysts citing 1968 as an example. The year 1968 was a year of escalating war, assassinations, civil unrest and more. Yet stocks that year rose almost 8.0%. Secondly, the medicine the Fed Reserve has applied to the system favors stocks. Record low rates discourage investors from parking cash. They are looking for greater returns and, in the long run, stocks have provided those returns. You might ask, what about the average American, who is likely to be a bit more risk-averse in today's challenging environment? Are consumers that bullish on the stock market? We would argue that the average American is also bullish about the future. But they are taking the Fed's medicine and using it to purchase homes instead of stocks. If you want to look at one investment that is even hotter than stocks, it is real estate. Recently, a Gallup poll confirmed this concept. The poll showed that real estate was the number one long-term investment favored by Americans and stocks came in a distant second. Thus, the big institutions are buying stocks, but the average consumer is putting their money in a place they can call home -- at record low rates... Stocks Are Still Rising Real Estate Tops The List R ates on home loans have fallen to new all-time lows so many times this year that it's almost getting routine. "Really? Again?" But if you're a homeowner, don't let me catch you yawning, or shrugging off these milestones. Because a new record low means there are more old loans out there that are worth refinancing at lower interest — maybe including your current loan. Thanks to the latest new floor for rates, more than 16 million homeowners with financing are now good refi candidates and are missing out on hundreds of dollars in savings per month, according to a report released by the mortgage data firm Black Knight. Rates on home loans have been falling steadily amid the financial turmoil touched off by the coronavirus, and they've now hit new record lows several times since early March. But the latest levels have expanded the field of potential refinancers like never before, Black Knight says. A record 16.3 million homeowners now have an incentive to refinance and could cut their payments by an average $283 a month. And, you might do even better than the average: 4.6 million could save at least $300 per month by refinancing, and 2.6 million would save $400 or more each month, the research says. You're considered a good candidate for a refi if you can shave at least three- quarters of a point — 0.75 — off your current rate... Source: MSN/Money ©2020, All rights reserved The Hershman Group www.originationpro.com Record Low Rates Spur Refinancing Compliments of Suzanne Smith HNB Mortgage 2101 W. Wadley Ste.36 Midland TX 79705 432-683-0081 [email protected] NMLS # 192813 Branch/Company 226999/205935 April 2018 Selected Interest Rates July 23, 2020 30 Year Mortgages——–3.01% 2019 High (Jan 3)-—–—–4.51% 2019 Low (Sept 5)———3.49% 15 Year Mortgages——-2.54% 5/1 Hybrid ARMs——–—–3.09% 10 Year Treasuries—–—–0.59% Sources—Fed Reserve, Freddie Mac Note: Average rates do not include fees and points. Information is provided for indicating trends only and should not be used for comparison Did You Know… Around one-in-five adults in the US have either moved or know someone who did because of the Covid-19 outbreak, according to a study by the Pew Research Center. While many of those who moved were students forced to leave when their campus shut down, 28% of US adults who relocated said they moved to reduce their risk of contracting the virus. August 2020 Freddie Mac Primary Mortgage Market Survey ®
