Autumn leaves

It’s Just The Facts: November 2019

  1. OWNERS AND RENTERS – The 111.2 million households that existed in the United States on 9/30/09 were split 68/32 between 75.2 million owners and 36.0 million renters. The 122.7 million households in the United States on 9/30/19 were split 65/35 between 79.5 million owners and 43.2 million renters (source: Census Bureau).
  2. PROCRASTINATE – 37% of 2,003 Americans surveyed in the 1st quarter 2019 had less than $5,000 accumulated in pre-tax retirement accounts (source: Northwestern Mutual Planning & Progress Study).
  3. THREE IN-A-ROW – The Fed lowered short-term interest rates last Wednesday (10/30/19), its 3rd consecutive meeting that has resulted in a rate cut. That’s the first time the Fed has reduced rates over 3 straight meetings since 12/16/08 or nearly 11 years ago (source: Federal Reserve).
  4. BONDS, NOT STOCKS – 72% of the investment portfolios of US life and health insurance companies at the end of 2018 were invested in bonds while just 2% of their assets were invested in stocks (source: NAIC).
  5. THEY PAID MORE THAN HALF – The top 3% of US taxpayers in tax year 2017 (the latest year that tax data has been released), paid 52% of the $1.6 trillion paid in federal income tax for that year, i.e., in a random sample of 100 taxpayers, the top 3 individuals based upon adjusted gross income paid more federal income taxes than the other 97 taxpayers (source: Internal Revenue Service).
  6. OLD AND STILL OWING MONEY – In 2016, 46% of American homeowners ages 65-79 had outstanding mortgage debt on their primary residence, almost double from the 24% of this age bracket that had mortgage debt 30 years earlier (source: Joint Center for Housing Studies of Harvard University).
  7. BUYING HOUSES AGAIN – Over the decade from 9/30/06 to 9/30/16, the number of homeowners in the United States declined by 0.2 million from 75.6 million to 75.4 million. Over the last 3 years from 9/30/16 to 9/30/19, the number of homeowners in the United States increased by +4.1 million from 75.4 million to 79.5 million (source: Census Bureau).
  8. EVERY DAY – An estimated 10,800 Americans will turn 65 years old each day next year (2020), i.e., 1 every 8 seconds. This group represents the 10th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).
  9. POWER OF THE PEOPLE – Consumer spending by Americans makes up an estimated 70% of our $21.5 trillion economy. Consumer spending by Chinese citizens makes up an estimated 40% of their $14.2 trillion economy (source: Department of Commerce).
  10. NOT LIKELY – The probability of a Fed rate cut following its 2-day meeting on December 10-11 is just 1% as of last Friday (11/15/19) after reaching a high of 66% in August 2019 (source: CME Group).
  11. WAY BEHIND – After adjusting for the impact of inflation, an average millennial in 2019 has a net worth 41% less than the net worth of a similarly aged adult 30 years earlier in 1989. Millennials were born between 1981-97 and are age 22-38 in 2019 (source: Federal Reserve Bank of St. Louis).
  12. HOUSEHOLDS – Of the 123 million households in the United States as of 9/30/19, an estimated 30 million are homeowners with no mortgage, 50 million are homeowners with a mortgage and 43 million are renters (source: Census Bureau).
  13. SMALL GROUP, BIG NUMBER – Just 6% of the 45 million Americans that have student loans hold 33% of the nation’s $1.50 trillion of outstanding student loans. This group is comprised of borrowers with at least $100,000 of outstanding student loan debt (source: Brookings Institute).
  14. NOT IN NORTH DAKOTA – 23.5% of the homeless population in the United States live in California (source: U.S. Department of Housing and Urban Development).
  15. START SAVING NOW – A child born in 2019 that begins kindergarten in the fall of 2024 would attend college between the years of 2037 and 2041. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges that have occurred over the last 30 years (+5.3% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would be $238,989 or $59,747 per year (source: College Board).
  16. THEY HAVE NO CHOICE – 46% of working Americans surveyed expect to remain in the workforce beyond age 65. Of the 46% of Americans continuing to work after age 65, 47% of them (i.e., 47% of the 46% or 22% of all working Americans surveyed) will continue to work only because they haven’t accumulated sufficient assets to retire (source: Northwestern Mutual 2019 Planning & Progress Study).
  17. CITIES – California and Texas each have 3 of the 10 largest cities in the USA, including Los Angeles, San Diego and San Jose in California and Houston, San Antonio and Dallas in Texas (source: World Population Review).

Courtesy of Mortgage Market Guide