It’s Just The Facts: June 2019

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  1. TEN YEARS – June 2019 is the 120th consecutive month of an economic expansion for the United States, tying the record set between March 1991 and March 2001. The nation has maintained records on the country’s business cycles, i.e., expansions and contractions, since 1854 (source: National Bureau of Economic Research).
  2. THIS IS THE MONTH – The month of June has had the greatest number of existing homes sold during each of the last 5 calendar years (2014-2018). 570,000 existing homes were sold in June 2018, an average of 19,000 a day nationwide (source: National Association of Realtors).
  3. DEBT-FREE – 40% of US homeowners own their home free and clear of any mortgage debt or home equity loan. Of the 60% of homeowners with an outstanding debt balance, the median debt total is $126,000 (source: American Housing Survey).
  4. REALLY BIG COUNTRY – The United States covers 1.997 billion acres in the 48 contiguous states, including state and federally owned land. There are 122.3 million households in the country, including homeowners and renters. If divided equally, each household would own 16.3 acres of land (source: BTN Research).
  5. CHANGED THEIR MIND – There have been 4 rate-hike cycles initiated by the Fed over the last 25 years, including the most recent cycle that has included 9 rate-hikes from 12/16/15 to 12/19/18, i.e., the “last rate hike” took place 6 months ago. The 3 previous Fed rate-hike cycles flipped from its “last rate hike” to its “first rate cut” after 5 months (July 1995), 7.5 months (January 2001) and 15 months (Sept. 2007) (source: Federal Reserve).
  6. MONEY – The top 10% of taxpayers received 47% of the $10.2 trillion of adjusted gross income (AGI) earned nationwide in tax year 2016. The bottom 90% of taxpayers received the other 53% of AGI (source: IRS).
  7. TEN YEARS AFTER THE BOTTOM – The 18-month recession that the United States experienced between December 2007 and June 2009 wiped out more than $7 trillion of real estate assets and stock portfolios. At the low point, the collective net worth of Americans fell to $50.4 trillion as of 3/31/09. 10 years later, the balance sheets of Americans have gained +115% from that 2009 bottom to reach a record level of $108.6 trillion as of 3/31/19 (source: Federal Reserve).
  8. JOBLESS RATE – The last recession in the USA began at the end of December 2007 and lasted 18 months through June 2009. The nation’s unemployment rate as of 12/31/07 was 5.0%, climbing to 9.5% as of 6/30/09 (source: National Bureau of Economic Research, Department of Labor).
  9. LATER THIS YEAR? – The probability of a Fed rate cut as of the end of last week (Friday 6/14/19) at its meeting scheduled for 6/19/19 was 23%. The probability of a Fed rate cut at its 7/31/19 meeting was 87%. The probability of a Fed rate cut at its 9/18/19 meeting was 97% (source: CME Group).
  10. TAKING THE KEYS – Banks repossessed 10,634 homes nationwide in May 2019. Banks repossessed 93,777 homes in May 2010, the 2nd worst month ever in American history (source: ATTOM Data Solutions).
  11. MAYBE NEXT TIME – The Fed’s 4th meeting of 2019 ended last Wednesday with no change in short-term interest rates. The Fed last cut interest rates on 12/16/08 or 10.5 years ago (source: Federal Reserve).
  12. HOME BUYERS – The average nationwide interest rate on a 30-year fixed rate mortgage was 3.84% last week, just over half of 1% above its all-time low of 3.31% achieved at Thanksgiving 2012 (source: Freddie Mac).
  13. AT RISK OF A TUMBLE? – The 4 most overvalued housing markets in the world today are Hong Kong, Munich, Toronto and Vancouver (source: UBS Global Real Estate Bubble Index).
  14. NOT SAVING ENOUGH – The average 65-year old American male has accumulated retirement savings that will sustain him in retirement for 9.7 years, i.e., to just short of his 75th birthday. The problem: the average 65-year old American male has a life expectancy to 83 years, or 8.3 years beyond the point when his savings run out. This study assumed that male retirees would need retirement income of 70% of the individual’s pre-retirement pay (source: World Economic Forum).

Courtesy of Mortgage Market Guide

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