Archive for the ‘Retirement’ Category

The Recession: 10 Years Later

Posted on December 08, 2017 by Laura Lam

In December 2007, employment peaked and started to head south – for two long years.  What followed: The loss of more than 8 million jobs, half the value of the Dow and the S&P 500, and trillions of dollars in retirement accounts and household wealth. Lives and businesses were ruined and whole neighborhoods emptied out, as banks took back homes bought on badly underwritten credit. A decade later, the American economy has recovered in many ways. Employers have been steadily adding jobs since early 2010, the stock market is booming and home prices have reached new all-time highs.  But in…

Could Capital Gains Tax Reform Reduce Housing Supply?

Posted on December 06, 2017 by Laura Lam

While tax reform will impact everyone who works in mortgage finance to some degree, it may also affect potential homeowners and home sellers via reform to the capital gains tax.  Capital gains is a tax that may be levied when an investor sells an asset at a notable profit — selling a home may be an example of this type of taxable transaction. Data and analytics firm Black Knight did a deep dig into the tax reform.  One clear finding from Black Knight is that proposed changes to the capital gains exemption on profits from the sale of a home…

Millennials are saving more for retirement

Posted on November 10, 2017 by Laura Lam

In the race to save for retirement, one group is doing surprisingly well: millennial parents.  That’s according to a new NerdWallet survey, which found that 38% of millennial parents (ages 18-34) save more than 15% of their income for retirement. All told, millennial parents reported a median retirement savings rate of 10% of income, compared with 8% for Generation X parents (ages 35-54) and just 5% for baby boomer parents (ages 55+). Given the picture typically painted of this age group, you might be shouting “fake news” right now. There’s one caveat: The results include only those currently saving for…

Boomers Struggle to Pay Off Mortgages Before Retirement

Posted on October 17, 2017 by Laura Lam

While outright homeownership increased among Baby Boomers after the last recession, they still lag previous generations, and may never catch up, according to the Fannie Mae Economic and Strategic Research Group’s latest Housing Insight Series.  Older generations such as Baby Boomers have criticized Millennials for waiting longer than their generation to buy a home, however even Boomers are failing to keep up with the pace set by the generation before them. Baby Boomers are much less likely to own their home outright than the generations before them and may struggle to catch up before reaching retirement age.  According to the report, “The leading…

Consumer Delinquencies Improve in 2Q

Posted on October 16, 2017 by Laura Lam

Delinquencies in closed-end loans held steady in the second quarter as bank card delinquencies fell and home-related categories continued their return to normal levels, according to results from the American Bankers Association’s Consumer Credit Delinquency Bulletin. Overall, delinquencies fell in 8 of the 11 individual consumer loan categories.  The composite ratio, which tracks delinquencies in 8 closed-end installment loan categories, remained at 1.56% of all accounts – well below the 15-year average of 2.16%. “Delinquencies remain below historical levels as consumers continue to show great command of their finances,” said James Chessen, ABA’s chief economist. “The outlook remains very positive,…

Millennials Over-Extended and Frustrated with Home-Buying Process

Posted on October 04, 2017 by Laura Lam

Millennials poured some $514 billion into the U.S. housing market over the last year as the largest generation of home buyers, Zillow reported.  But new survey data shows their home-ownership aspirations are stymied by affordability issues, frustration with the buying and selling process, and a cutthroat housing market. More than half of young buyers (53%) make multiple offers to buy their first home, and only 2 in 5 millennials (39%) are able to make the recommended 20% or more down payment.  The results of the Zillow Group Report on Consumer Housing Trends 2017 show how the nation’s highly competitive housing…

Homeowners Continue to Regain Equity

Posted on September 27, 2017 by Laura Lam

Homeowners with mortgages saw an overall gain of $766 billion in their home equity during the second quarter from the year-ago period, or an increase of 10.6%, according to the second-quarter home equity analysis released by CoreLogic.  On average, the year-over-year gain is $12,987 for each homeowner. The biggest increases were seen in Western states as higher home prices drove equity gains. Homeowners in Washington saw average home equity gains of about $40,000, while California homeowners gained an average of $30,000 in home equity. The quarter also posted a year-over-year decrease in the number of homes with negative equity. During the period, 2.8 million homes – representing…

New Jersey Ranks Worst in Nation for Finances

Posted on September 25, 2017 by Laura Lam

New Jersey is nearly $209 billion in debt and has the worst finances of any state in the nation, according to a recent report.  Truth in Accounting, a think tank that analyzes government finances, ranked all 50 states based on their debt per taxpayer. The group’s latest report said New Jersey taxpayers carry $67,200 each in debt, a burden has almost doubled since 2013, when it was $36,000 per taxpayer. New Jersey’s massive debt load largely stems from pension and retiree health care costs for state workers. The report said the state has $118.8 billion in unfunded pension benefits and…

Hurricanes Weigh on Consumer Confidence

Posted on September 19, 2017 by Laura Lam

Americans became less confident in the economy after Hurricane Harvey and Hurricane Irma swept across Florida and South Texas, according to the Survey of Consumers conducted by the University of Michigan.  The Index of Consumer Sentiment decreased to 95.3 in the first part of September. This is down 1.5% from 96.8 in August, but still up 4.5% from 91.2 in September last year. “Consumer confidence edged downward in early September due to concerns over the outlook for the national economy,” said Survey of Consumers Chief Economist Richard Curtin.  “Consumers’ assessments of current economic conditions improved, however, with the Current Conditions…

Auto and Mortgage Loan Defaults at Lowest Level in Decade

Posted on August 29, 2017 by Laura Lam

Despite a slight increase in July, the default rate for first mortgage loans still sits at its lowest point in the last 10 years, according to the latest S&P/Experian Consumer Credit Default Indices.  In fact, the mortgage default rate for first and second mortgages aren’t too far off from their July 2016 level, as homebuyers get better at paying their mortgage on time. The indices represent a comprehensive measure of changes in consumer credit defaults and include bank card and auto loan default rates. As seen in the chart on the left, the first mortgage default rate increased two basis…