It’s Just The Facts: October 2019

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  1. IS THAT ENOUGH? – 58% of 1,015 Americans surveyed in August 2019 believe that a retiree who has accumulated $1 million in pre-tax investment accounts will be able to enjoy a “comfortable” lifestyle in retirement (source: TD Ameritrade).
  2. A TRILLION PER YEAR – The national debt as of 9/30/19 (i.e., the end of fiscal year 2019) was $22.7 trillion, up $1.2 trillion in the last year, up $4.9 trillion in the last 5 years, and finally up $10.8 trillion in the last 10 years (source: Treasury Department).
  3. MOST EVER – 8,567 American retail stores have closed YTD through 9/27/19, exceeding the all-time record of 8,139 store closures from 2017 (source: Coresight Research).
  4. WILL YOU BE FINANCIALLY READY? – 49% of 5,923 workers surveyed in the 4th quarter 2018 believe they will live to at least age 80, i.e., 1 out of every 2 workers. 14% of the workers surveyed believe they will live to at least age 100, i.e., 1 out of every 7 workers (source: Transamerica Center for Retirement Studies).
  5. WE THE PEOPLE – As of the end of September 2019, 158 million Americans had full-time jobs and 6 million Americans were out-of-work, a total of 164 million Americans who were either working or looking for work. Another 166 million Americans are either too young to have a job or they have retired from the workforce. Adding both groups together makes up our nation’s population of 330 million (source: Department of Labor).
  6. EQUITY – The average loan-to-value ratio in the US housing market as of 6/30/08 was 55%, i.e., the average homeowner had home equity of 45%. The average loan-to-value ratio in the US housing market as of 6/30/19 was 36%, i.e., the average homeowner had home equity of 64% (source: Federal Reserve).
  7. WHERE DO YOU RANK? – It takes adjusted gross income (AGI) of $2.37 million to rank in the top one-tenth of 1% of US taxpayers. It takes AGI of $515,371 to rank in the top 1% of taxpayers. It takes AGI of $208,053 to rank in the top 5% of taxpayers.  It takes AGI of $145,135 to rank in the top 10% of taxpayers.  This data, covering tax year 2017, was released last week (source: Internal Revenue Service).
  8. MOST CUT RATES – 24 out of 41 central banks of the world’s major economies (59%) reduced their key benchmark interest rate during the 3rd quarter 2019, including the Federal Reserve of the USA. Just 3 of the 41 central banks (7%) raised interest rates last quarter (source: Financial Times).
  9. THEY’LL BE RUNNING THE SHOW – By the year 2025, more than 50% of the US workforce will be “millennials” or younger. Millennials were born between 1981-97 and will be ages 28-44 in 2025 (source: Inc. Magazine).
  10. EXPENSIVE TO LIVE – 10% of American homeowners spend at least 50% of their pre-tax income on their housing costs. 25% of American renters spend at least 50% of their pre-tax income on their housing costs (source: Joint Center for Housing Studies at Harvard University).
  11. LIVE WITHIN YOUR MEANS – 41% of American households make less than $50,000 of adjusted gross income (AGI) per year. Only 8% of American households make at least $200,000 of AGI (source: Census Bureau).
  12. DEPENDS ON WHERE – The median sales price of the 5.4 million existing homes sold in the United States during September 2019 was $272,100. The median sales price of existing homes sold in the “West” was +48% greater than the national average ($403,600) while the median price of existing homes sold in the “Midwest” was 22% less than the national average ($213,500) (source: National Association of Realtors).
  13. UNAFFORDABLE FOR MANY – The median home price in June 2019 in San Francisco ($1,466,900) was more than 5 times the median home price in Phoenix ($280,000), i.e., by moving 754 miles southeast from the northern California coast to the Arizona desert, the median home price drops by 81% (source: Redfin).
  14. CUT IN HALF – US homebuilders started construction on 13.773 million single-family homes over the 10 years of 1998-2007, an average of 1.38 million new homes per year. Homebuilders started construction on 6.990 million single-family homes over the 11 years 2008-2018, an average of 635,500 per year (source: Census Bureau).
  15. I DID IT MYSELF – A survey of 4,000 American millionaires concluded that the millionaires who created their own personal wealth were “moderately happier” than the millionaires who inherited their wealth (source: Harvard Business School, 2018).

16. ROTTEN KIDS – A study involving 2,500 wealthy families over decades of wealth transfers across generations found that on average only 30% of the original family fortune remained at the end of the 2nd generation, and only 10% remained at the end of the 3rd generation (source: Williams Group).

Courtesy of Mortgage Market Guide

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