7 Sep 2021

It’s Just The Facts: August 2021

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  1. THEY MAY NEVER STOP – The Federal Reserve has been buying $120 billion of federal debt per month since mid-March 2020, resulting in our nation’s central bank buying 76% of all the federal debt that has been issued during the pandemic (source: Federal Reserve).
  2. BEING CAUTIOUS – The personal savings rate in the US was a record 33.8% in April 2020 as Americans reacted to the COVID-19 pandemic outbreak.  The personal savings rate in the US was 9.4% in June 2021.  Before the pandemic, the personal savings rate was above 10% during just 1 month since 1993.  The personal savings rate is defined as “savings” (i.e., after-tax income less consumption spending) divided by after-tax income (source: Department of Commerce).
  3. HOTELS AND RESTAURANTS – The number of American workers in “leisure and hospitality” was 16.3 million as of 2/29/20, dropped to 8.6 million as of 4/30/20, and now has rebounded to 15.8 million as of 7/31/21 (source: Department of Labor).
  4. NEED HELP – 43% of Americans under age 35 receive financial help from their parents or other family members when they purchase a home, e.g., money used for a down payment (source: Legal & General).
  5. HOME BUILDING – 563,400 single family homes began construction during the first half of 2021, the largest “January-to-June” total in the US since the first half of 2007 or 14 years earlier (source: Census Bureau).
  6. BIGGEST PIECE – 70% of total household debt nationwide is mortgage debt as of 6/30/21, i.e., $10.44 trillion of mortgage debt out of $14.96 trillion of total household debt (source: Federal Reserve Bank of New York).
  7. PARTLY EXTENDED – The first eviction moratorium due to the pandemic was issued by the Department of Housing and Urban Development on 3/18/20 for 60 days, i.e., to 5/17/20.  Believing that renters needed additional financial help, the original moratorium was extended 7 times, ultimately pushing the deadline to 7/31/21.  An 11th hour effort by the White House on Tuesday 8/03/21 extended the deadline an 8th time (to 10/03/21), however the extension is limited to just those areas in the US where COVID infections have continued to rise (source: HUD).
  8. WILL IT BE ABOVE AVERAGE? – The average change that American homeowners are anticipating in the value of their primary residences over the upcoming 12-months is a gain of +5.1%, more than the actual gain of +4.1% per year that has been achieved over the last 20-years through 4/30/21 (source: July 2021 Survey of Consumer Expectations Housing Survey, Federal Housing Finance Agency).
  9. EXPENSIVE STATES – The top 3 US states for “total debt balance per capita,” i.e., per person, as of 6/30/21 were California, New Jersey and Arizona (source: New York Fed Consumer Credit Panel).
  10.  CALM BEFORE THE STORM? Banks repossessed 230,305 homes in calendar year 2018.  Banks repossessed 143,955 homes in calendar year 2019.  Banks repossessed 50,238 homes in calendar year 2020.  Through 7/31/21, banks had repossessed just 12,148 homes YTD (source: Attom Data Solutions).
  11. MOVE HERE – 44 US cities are currently offering cash incentives to attract workers to move to their cities, including Augusta, ME ($15,660), Stillwater, OK ($7,500) and French Lick, IN ($5,000) (source: MakeMyMove.com).
  12. BOOM TOWN – Phoenix was the 99th largest US city in 1950 (106,818 people).  Phoenix is the 5th largest US city today (1.61 million people), per the 2020 US census (source: Census Bureau).
  13. JUST SPEND THE MONEY – The Treasury Department distributed $15 billion in July 2021 and has distributed another $15 billion this month (through Friday 8/13/21) per the expanded Child Tax Credit (CTC) that was part of the “American Rescue Plan Act” that was signed into law by President Joe Biden on 3/11/21.  The payments are currently scheduled to continue through the end of 2021 (source: American Rescue Plan Act).
  14. AVERAGE PER MONTH – The average Social Security retirement benefit is $1,503 per month.  The average “food stamp” benefit (SNAP) is $157 per month per person (source: BTN Research).
  15. BRAND NEW HOMES – The median sales price of a new home sold in the USA in June 2021 was $390,500, an all-time record high both on a nominal basis and on an inflation-adjusted basis.  The old nominal record was $374,400 in April 2021.  The old inflation-adjusted record was $345,800 in May 2017, equal to $383,898 in today’s dollars (source: Census Bureau).
  16. GOOD LUCK – A renter household that qualifies for rental aid assistance (see prior bullet) receives 12 months of rent and utility assistance, extended to 18 months for the most vulnerable households (source: ERAP).

Courtesy of Mortgage Market Guide 

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