Stocks Are Still Rising
Volume 14 Issue 8 August 2020
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 pre-
dicting 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 escalat-
ing war, assassinations,
civil unrest and more. Yet
stocks that year rose al-
most 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 re-
turns and, in the long run, stocks have
In This Issue P2 Real Estate Tops The List || P2 What Millennials Want
P3 Stocks Are Still Rising || P4 Record Low Rates Spur Refinancing
Selected Interest Rates July 23, 2020
30 Year Mortgages——–3..01%
2019 High (Jan 3 %
2019 Low (Sept 5) ——–—3.49%
15 Year Mortgages——-2.54%
5/1 Hybrid ARMs——–—–3.09%
10 Year Treasuries—–—–0.50%
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 purposes.
Continued on Page 3
THIS NEWSLETTER IS BROUGHT TO YOU BY:
John Doe
Senior Loan Officer Ajax Mortgage
111 Mortgage Way
Mortgagetown, MD, 11111
(301) 555-1212
(800) 555-5555
Ajaxmrtg.com
Specializing in
� Residential
Purchases
� Residential
Refinances
� Commercial
Properties
� Home Equity
Loans
Did You Know…
Around one-in-five adults in the US have either moved or know someone who did because of the Covid-19 out-break, according to a study by the Pew Research Center. While many of those who moved were students were 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.
What Millennials Want...
Page Two
“…young buyers are somewhat particular…”
Real Estate
Tops The List F
or most Americans, homeown-ership remains an integral part of an otherwise shifting inter-
pretation of the Ameri-can Dream. Nearly 90 percent of Millennials – a group known for their tendency to rent in the city the longest – plan to purchase their own place at some point.
The key difference between Millennials and prior generations is that young peo-ple view homeownership as a personal lifestyle choice rather than a definite milestone. As such, young home buyers are somewhat particular when it comes to their dream home must-haves.
Per a survey conducted by Trulia and Harris Poll, 72 percent of renters ages 18 to 34 plan to buy a home in the future. In preparation of this new wave of home buyers, consider where young people want to live and the home fea-tures they desire most.
Tiny Homes: Still a Niche Market
While a sustainable and efficient house-hold lifestyle is gaining in popularity, most buyers don’t see a tiny house as the ideal option. Forty-four percent of
all buyers (regardless of age) prefer a home between 1,401 and 2,600 square
feet – a size that holds two to four bedrooms, depend-ing on property type. One-
third of Millennials aren’t sure of how big they want their dream home to be, but 20 percent say 2,001 and 2,600 square feet is ideal. That’s much larger than the typical tiny home, which ranges between 400 and
1,000 square feet, on average.
Modern Beats Traditional
Baby Boomers traditionally favor single-story homes, but both Gen X and Mil-lennial home buyers prefer a more mod-ern aesthetic and layout. Anecdotal evi-dence also suggests that young people wish for move-in ready interiors instead of do-it-yourself (DIY) updates and large remodeling projects. Hardwood floors, granite countertops, stainless steel appliances and layout efficiency regularly make a lasting impression on young house hunters. Aside from mod-ern architecture styles, Millennials also like Victorian or Craftsman homes. And, despite their city-driven lifestyles, just 6 percent of Millennials see them-selves purchasing a high-rise penthouse apartment.
R
eal estate continues to
rank at the top of the
list of the best long-
term investments for
Americans, according to the lat-
est annual poll from Gallup.
About 35% of Americans picked
it as their favorite investment,
hich has been the case since
2013.
Meanwhile, Americans are less
likely to view stocks or mutual
funds as the best long-term in-
vestment, particularly waning
after the COVID-19 pandemic
struck the economy this spring.
Twenty-one percent of Ameri-
cans 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 invest-
ment potential has steadily risen
in popularity....
Source: Gallup.com
Page Three
...In a Home Stocks Are
Still Rising
Continued from Page 1
provided those returns. You might
ask, what about the average
American, who is likely to be a bit
more risk-averse in today's chal-
lenging environment? Are consum-
ers 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 con-
firmed this concept.
The poll showed that real estate
was the number one long-term in-
vestment 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...
“…the average
consumer is putting their money in a
place…”
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Headed to the Suburbs
Most Americans would rather live in the countryside (27 percent) or suburbs (27 percent) over a major metropolitan city (8 percent). For Millennials, though, exact location isn’t as im-portant. Young people prioritize a shorter work commute and top-notch school districts first, putting less em-phasis on any specific address. Howev-er, when it comes to traffic, living near the urban core often minimizes work travel time.
Kitchens and Open Concept
Millennials’ biggest dream home fea-ture is having a balcony with a view (60 percent) and terraces are far more prev-alent in multi-family buildings near the urban core. Other must-haves among Millennials include a backyard deck (59 percent), gourmet kitchen (53 percent), swimming pool (52 percent) and open floor plan (45 percent). Across genera
tions, home buyers crave gourmet kitchens and open concepts most often.
While house hunting preferences differ across generations, Millennials’ must-have lists aren’t always practical. Us-ing a home affordability calculator helps young buyers understand what they can afford, despite their predispo-sitions, and keeps expectations in line with the budget. From there, mortgage preapproval and an open mind go a long way in creating a smoother and more successful first-time home buy-ing experience...
Source: Trulia
Record Low Rates Spur Refinancing
Joe Customer Joe’s Appliance Center 111 Center Way Drive
Suite 1005
Happyville, VA 20000
Address Correction Requested
In This Issue:
Stocks Are Still Rising
John Doe
Senior Loan Officer
Ajax Mortgage
111 Mortgage Way
Mortgagetown, MD, 11111
(301) 555-1212
(800) 555-5555
Ajaxmrtg.com
My goal is to provide expert
advice and direction for my clients with an overall goal of
providing a real estate finance
transaction that exceeds their
goals and expectations.
— John Doe Senior Loan
Officer
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 cur-
rent rate...
Source: MSN/Money