It’s Just The Facts: September 2021

  1. IN THE MIDDLE – After adjusting numerical data from the past for the impact of inflation, the US median household income reached an all-time high for 4 consecutive years (2016-2019), peaking at $69,560 in 2019.  That streak ended in 2020 when median household income dropped to $67,521.  Before 2016, the peak for median household income was $63,423 from 1999 (source: Federal Reserve Bank of St. Louis).
  2. HOW ABOUT YOUR FAMILY? – 63% of American households surveyed in August 2021 made a “large purchase” in the previous 4 months, including large household outlays for essential activities (e.g., housing related) and large expenses for non-essential activities (e.g., vacations) (source: Federal Reserve Bank of New York).
  3. MORE THAN JUST WAGES – For every $1 spent for wages and salaries in the private sector as of June 2021, employers spend an additional 45 cents on benefits, including paid leave, insurance, retirement plans and legally required benefits.  Average private sector compensation is $29.48 per hour while the cost of benefits averages an additional $13.12 per hour (source: Bureau of Labor Statistics).
  4. BORDERING STATES – The 2 fastest growing states in the last decade are Utah, up +18.4% in its total population, and Idaho, up +17.3% (source: 2020 Census).
  5. HOMES – As of 6/30/21, US home prices rose by an average of +17.4% over the last year, by +8.1% per year over the last 5 years, and by +6.5% per year over the last 10 years (source: Federal Housing Finance Agency).
  6. FACING EVICTION – When the Supreme Court ruled on 8/26/21 that the CDC had no legal authority to issue an eviction moratorium, just 6% of 43.6 million US renters were behind on their rent (source: Goldman Sachs).
  7. BUYERS ARE LOOKING FOR A PERFECT HOME – Real estate investors were involved in 17% of the home purchases (1 out of every 6 sales) during the 2nd quarter of 2021.  The investors have taken advantage of historically low interest rates to finance upgrades on their purchases, and then realize a profit by reselling to a pandemic-weary buyer who is looking for specific features in his/her new home (source: Redfin).
  8. WORKER SHORTAGE – An estimated 20% of workers in the hotel and restaurant business globally have permanently exited the industry during the pandemic, electing instead to seek employment within industries that may provide greater job stability going forward (source: Tony Capuano, Marriott CEO).
  9. HIT THE ROAD – Average occupancy at US hotels fell to a pandemic-low of 22% on 3/28/20.  Average hotel occupancy bounced back during the 2021 summer months, peaking at 71% as of 7/24/21 (source: STR).
  10. NATIONWIDE AVERAGE – The value of a single-family home in the United States increased by an average of +17.4% over the 12 months from 6/30/20 to 6/30/21 (source: Federal Housing Finance Agency).
  11. CHEAP MONEY – The yield on the 10-year Treasury note closed at 1.303% on 8/31/21, up from 0.913% as of 12/31/20.  The all-time low close for the 10-year note is 0.501% set on 3/09/20 (source: Treasury Department).
  12. LENDERS WANT TO LEND – 29% of “large” US banks have loosened the lending requirements they utilize to approve loans to corporations and to individuals during the 2nd Q of 2021.  “Large” banks are defined as having total domestic assets of at least $50 billion (source: Federal Reserve Opinion Survey on Bank Lending Practices).

Courtesy of Mortgage Market Guide