Most borrowers who had a mortgage forbearance in March 2021, including disproportionately impacted borrowers of color, were either current or closed as of March 2023. This is according to data released this week by the Consumer Financial Protection Bureau (CFPB) Office of Research.
In the immediate aftermath of the COVID-19 coronavirus pandemic’s onset, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 allowed millions of U.S. mortgage borrowers to enter public or private forbearance programs, which temporarily paused their mortgage payments.
Recent data from the national mortgage database compares the performance of mortgage borrowers in March 2023 to borrowers in March 2021 who had COVID-related forbearance, were delinquent but not in forbearance, and those considered current on their payments. Over the past two years, the CFPB has been vocal about its concerns regarding forbearance recovery, but the data shows generally positive outcomes.
“While we expressed concern in both 2021 and 2022 about borrowers’ ability to recover from periods of forbearance, our most recent analysis shows that the majority of borrowers in forbearance in 2021 – including Black and Hispanic borrowers – were largely able to become current on their payments by March 2023,” the report said.
In 2021, CFPB found that mortgage delinquencies were most common among Black or Hispanic borrowers; loans with a loan-to-value ratio of 60% or higher; borrowers living in majority-minority census tracts; and borrowers living in census tracts with lower relative incomes.
“[M]ortgages that were in forbearance in March 2021 are performing much better than loans that were 60 days or more delinquent in March 2021,” the CFPB found. “They’re performing, however, slightly worse than loans that were current in March 2021. Loans in forbearance in March 2021 were also less likely to be closed by March 2023 versus loans that were delinquent or current in March 2021.”
Among loans in forbearance in March 2021, more than 52% were current as of March 2023, a larger share than the 26% of loans that were 60 days or more delinquent two years prior. Generally, the positive outcomes are clear, the Bureau said.
“[T]he majority of borrowers, including Black and Hispanic borrowers, who had a mortgage forbearance in March 2021 were current as of March 2023,” the data said. “We also showed that borrowers in forbearance in March 2021 had a much lower likelihood of being delinquent or in foreclosure compared to borrowers who were 60 days or more delinquent in March 2021.”
Related research on CARES Act forbearances has illustrated that most borrowers became current either by self-curing or curing with assistance, including entering into a repayment plan, deferral or loan modification.
“The CFPB will continue to monitor how mortgage borrowers are faring as the economic recovery from the COVID-19 pandemic moves forward,” the report said.
The total value of every home in the U.S. is $33.6 trillion, nearly as much as the GDP of the two largest global economies combined – the U.S. ($20.5 trillion) and China ($13.6 trillion) – according to a new Zillow analysis.
Since
2010, when the market was battling to regain its footing in the wake
of one of the largest housing downturns on record, the national
housing market added $11.3 trillion in value, which is a more than
50% increase. About 14% of that gain was from new stock entering the
market, with the remainder from increased values of the existing
stock, underlining just how much home values rose during last
decade’s recovery and then explosion.
California
lives up to its Golden State nickname, making up a whopping 21.2% of
the nation’s housing value with 12% of the population. To put that
into context, the next most populous state, Texas, makes up 8.8% of
the U.S. population, but only 5.9% of the country’s housing value. To
exceed the $7.1 trillion worth of homes in California, you’d need to
combine the next four states on the list – New York ($2.7 trillion),
Florida ($2 trillion), Texas ($2 trillion) and Washington ($1.1
trillion).
With
$66 billion each, North Dakota and Wyoming have the smallest shares
of the U.S. housing market.
At
a more local level, three metros are beyond the trillion-dollar
barrier – New York ($3.2 trillion) Los Angeles ($2.5 trillion) and
San Francisco ($1.6 trillion). Los Angeles was the only market to add
more than a trillion dollars of housing during the 2010s, adding $1.1
trillion. Three of the five metros that gained the most value were in
California, as San Francisco ($827 billion), New York ($657 billion),
San Jose ($360 billion) and Seattle ($356 billion) followed Los
Angeles at the top.
While
California cast the biggest shadow in the nation’s housing growth for
most of the decade, more recent trends paint a different picture. The
typical home value in California was growing at more than 20%
annually for a period between the end of 2013 and early 2014, an
incredibly rapid pace, but one that is also unsustainable. By the end
of the decade, annual appreciation in California had slowed to less
than 2%, allowing Texas to surpass it as the top contributor to the
growth in value of the U.S. housing stock – total housing in Texas
grew $89 billion over 2019, compared to $77 billion in California.
At
the metro level, Washington, D.C. ($38 billion), Phoenix ($30
billion) and Seattle ($30 billion) have added the most value since
the end of 2018. Two large metros lost value over this period – San
Jose, down $49 billion, and New York, down $46 billion.
“In
2010, Americans were grappling with falling home values, unsold
subdivisions, and sky-high foreclosure rates, while policymakers were
working to stimulate demand,” said Zillow Economist Jeff Tucker.
“A decade later, we’re facing a very different set of
challenges, as a persistent shortage of new homes and starter homes
has kept home prices rising out of reach for many would-be first-time
home buyers. More and more of the nation’s wealth is now tied up in
our homes, as workers in some of the world’s most economically
productive cities, such as San Francisco, San Jose and Seattle, have
raced to get a foothold in homeownership there, driving up prices
with their fierce competition. Most of this growth has come from
rising prices for the same homes, not from actually building more
homes, a troubling trend when it comes to affordability.”
In
the vast majority of the country, home value appreciation accounted
for most of the growth in the total value of the housing stock last
decade, including 86% of the growth nationally. However, two
fast-growing markets, Charlotte and Austin, saw a greater share of
growth come from new homes. That’s not to say that home value growth
was slow in these markets – home values have outpaced the national
average in both Charlotte and Austin since 2010 – but the rate of new
construction has been so great as to exceed that growth.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
In an effort to get a pulse on the industry and learn more about the tools available to help real estate agents grow their businesses, I sat down with Robert (Bob) Burns, Real Estate Coach, Trainer and Consultant with Leader’s Edge Training, to discuss the resources they offer for real estate professionals.
While there’s no shortage of training available in the marketplace for agents, I quickly learned that for those real estate agents who want to take their career to the next level there is a vacuum in the real estate training space that few – besides Leader’s Edge – are addressing.
In our discussion, Bob shared the fact that “there’s a whole other side of this conversation [i.e. agent training] that’s not talked about nearly enough, and that’s management…the management side of the real estate business. There’s little to no training available.”
Why is this important?
As an agent, maybe you’re thinking that’s no big deal…I’m great at selling, how hard can it be to manage a brokerage?
Ask anyone who’s done it though, and you’ll quickly realize that it’s a lot tougher. For example, how do you know if your commission plan is truly competitive in the marketplace?
Or if you have the right financial reports with the key information you need to manage the brokerage well? Are things slipping through the cracks, or are you on top of every little thing that needs done?
Maybe you were in management before you got into real estate. That’s great, but were you managing employees or independent contractors?
It’s different, you know…the dynamics are definitely not the same.
For example, if you were a sales manager in the retail industry the methods and processes you used to manage employees will not be the same as the ones you need as the manager of a brokerage firm.
“It becomes not about telling people what to do and having, you know, all of that discipline and structure,” said Bob, “it really is an exercise in leadership in generating followership, and building relationships and trust so that these independent contractors that are like, herding cats, will actually follow you to where you want to bring your organization. And that’s a whole other skillset for most people to develop.
“So I love working with managers to help them with their leadership skills, to build followership and also with the nuts and bolts of actually managing their service delivery, their financials, their process…all the stuff that’s required as kind of foundational to their business so they can do the fun leadership stuff and getting people to follow them and recruit agents to their firm and retain them so they stay and help their agents build their business.”
Interested in learning what makes him tick, I asked Bob about how he got into the business.
“I have basically only ever worked in the real estate business. I came out of college with an education background that I didn’t want to use. I found out that education wasn’t for me and I went in an interview with a local real estate company in South Minneapolis – Coldwell Banker Burnett.
“They walked me through the process to get licensed. I became licensed and started my career as a 20 year old kid trying to live in an apartment, trying to help people with their most valuable asset – their home – so I had to learn fast.
“What I love the most about it [real estate] is that your output is pretty much in proportion to the input. In other words, the more you put into it, the more you get out of it. The harder you work, the more you earn and the better you do.”
[PULL QUOTE HERE] “It’s really a meritocracy, and I love that about real estate.”
“Anyone with the right drive, and the right work ethic can come into real estate and make a respectable living for themselves and their family.”
But what should real estate agents expect from the training offered by Leader’s Edge Training?
There are four components to the training; learning, practice, implementation and accountability.
“With adult learners,” said Bob, “especially in a professional environment, we’ll tend not to just learn something for the sake of learning…it needs to be applicable.”
Agents who enroll in the training offered by Leader’s Edge will not only learn something new, they’ll have the opportunity to learn in a very specific way that will help them really retain what they learn.
They’ll learn through implementation and practice, in an environment where it’s safe to practice the skill before the stakes get high.
Also, agents will experience accountability.
Unlike other training programs there’s no “here’s what you need to know, go do it and have a nice day,” agents receive true accountability that will help them implement what they’ve learned in a practical way.
Their coach will question them…“did you do what you said you would? How did it go? What worked? What didn’t work?”, etc.
Bob noted that continuing education for most agents is thought of as “more of a passive, ‘getting my hours in’ type of learning.” Highlighting what makes him different, he notes that, “The training that I provide is more about making a behavioral change in your business, so you can run a more successful practice.”
If you’re an agent who wants to “create change and growth in your business, that leads to making more money and helping more people,” you’re just the kind of agent who would benefit from Leader’s Edge Training.
“The core program that I deliver with Leader’s Edge Training is a “six week, one day a week in-person course,” said Bob. “It’s an advanced course in real estate; everything you need to know and then some to run a successful business. We do before and after measurements; we’re very big on measurement.
“The average participant increases their business 217% versus what they were doing before they took the class,” continued Bob.
“The other component to it, is that while they’re with me during that six week period of high accountability, high motivation – and this really positive environment – the average participant in the class that I deliver will close six transactions that can be traced back to the activities they did with me in the course. It’s very, very measurable.”
In addition to the training, Leader’s Edge offers agents two other resources that can help them grow their business; an app and a podcast.
“The ‘Agent Success’ app that we developed allows you to put in your business goals as a real estate agent,” said Bob. “And it breaks those goals down into quarterly, monthly and weekly activities that you need to complete on a regular basis to reach those goals.
“So if you want to make a certain amount of money in real estate, you put in those goals; you put in how many weeks a year you want to work, and then every day when you wake up the app tells you exactly what to do, how many calls you need to make, how many mailers you need to do, how many doors you need to knock on, how many social media posts you need to make…it spells it all out for you.
“And you can keep track of your activities as you do them, much like a fitness app such as My Fitness Pal or Fitbit or whatever…you can track your activities. And it will kind of assign you points based on the activities that you’ve done. And if you do those activities, you’ll reach your goals and the app help you get to where you want to go.
“It’s available in the iTunes Store and in the Android Google Play Store. We’ve opened it up to everybody; it’s not just Leader’s Edge clients…we want to contribute to the growth of the real estate industry as a whole.
“We’ve made it available for free to all real estate professionals… they can go out and download it and start using it today.”
Without question, in my experience most real estate professionals love to help others achieve success. One such way they can do that is by sharing their knowledge through podcasts.
Bob’s podcast is called “How They Won” and is available on a number of platforms.
“Every week I interview top real estate professionals, mostly real estate agents,” said Bob, “but also people connected to the real estate industry…and they share the secrets of their success.
“The interviews are typically around 30 minutes, and while some episodes have gone as long as 60 minutes I try to keep it 30 to 40 minutes so you can listen as you walk around your commute or on the treadmill or the elliptical at the gym.
“There’s been a tremendous response…real estate agents like to learn from each other.
“And the other thing about about “How They Won”… as I was doing my market research, I noted that there are a handful of real estate podcasts that are out there.
“I’m a big podcast fan…I love podcasts…but the real estate podcasts that are out there, in general, with the exception of a very, very small few, from a quality and organization standpoint, I just find very difficult to listen to.
“So my goal with “How They Won” was to launch something that was of a very high, professional, listenable quality,” continued Bob, “and that was organized and succinct in a way that listeners could actually implement in a short period of time.
“For their time investment, I wanted them to be able to actually implement some of the things that they learned in the podcast.”
At the time of this writing we’re facing a moratorium on physical gatherings, so I asked Bob how he was adapting to the changes brought by the Coronavirus epidemic.
“What I’m doing right now, is a lot of what’s called mindset and motivational work. It’s very hard in this environment for people to do the right things; to hold themselves to a certain standard. They lose track of the discipline of running their business. You’re not going to close as many real estate transactions in this kind of environment.
“So the focus has shifted from a lot of action-based tasks (e.g. make these contacts, knock on these doors, or send out this mailer,) to more of a ‘where are you’, ‘where’s your head at today’. As a real estate agent what are you thinking about? How can we implement some structure in your day so that when we do wake up to a sunrise in the first day of a post COVID-19 real estate market you’re ready…you won’t miss a beat when the light turns green again.”
Taking the cue, I asked a question that I’m sure is on a lot of peoples’ minds; especially those of us in the real estate industry.
“What do you think the real estate industry as a whole is going to look like…at least for the United States after we get the ‘all clear’ so to speak?”
“It’s really hard to say,” said Bob. “I think it comes down to some basic economic factors. The biggest driver historically of real estate, contrary to what almost every written article wants you to believe, is not interest rates.
“Interest rates are not the biggest driver of the real estate market…it’s employment.
“Just like, you know, the old adage in real estate is ‘location, location, location’… the economics of this industry is ‘employment, employment employment’.
“So depending on how quickly we can get home buyers and home sellers back to work is going to shape whether this is a V shaped recovery or a U shaped recovery.
“For example, if you want to buy a house, typically you’re going to need a mortgage to buy it. Mortgage Lenders aren’t going to lend you money if you don’t have a job.
“So these four levels that we’re seeing in these layoffs; if we’re able to kind of sustain those small, medium and large businesses through however long this is, whether it’s weeks or months, if we’re able to keep those businesses open and they’re able to bring their workforce back to work, then I think this whole thing will have a very little impact on the real estate business as a whole.
“It’ll be a setback, but we have a whole bunch of built-up demand happening behind this dam. And when we’re back open for business, all of that pent-up demand is going to be satisfied. And we’re going to see a fast and full recovery.
“If on the other hand, we’re not able to keep these small, medium, large businesses to the point where they’re able to bring their workforce back in, and these unemployment claims that we’re seeing are permanent rather than temporary, I think it’s going to be a much slower recovery as new businesses have to become established to take the place of businesses that didn’t survive.
“And those business have to grow organically, and eventually get back to the point where they can have a payroll where we did pre COVID-19, then I think you’re looking at a much more protracted recovery or a much, much longer recovery if that happens.”
So what should agents be doing now, as we’re in a state of flux?
Unfortunately, we’re in uncharted territory right now, but one things that is vital for every agent to consider is to take the time to work on their mindset.
Social distancing, and in some cases, stay-at-home orders can wreak havoc on your mindset if you let it.
Pay attention to what you read, and what you listen to. Take care of yourself, your family, and your business and when possible, take advantage of this time to expand your knowledge so that you can hit the ground running when the time is right.
Anita Clark is a Warner Robins Real Estate Agent helping buyers and sellers in middle Georgia with all of their home buying or selling needs.Whether she is selling new construction homes, assisting first-time buyers, or helping military relocating to Houston County, she always puts her customers needs first.
The average 30-year-fixed rate mortgage remained flat for the third consecutive week at 3.55% for the week ending Feb. 3, reflecting the impacts of the Omicron variant in the economy, according to the latest Freddie Mac PMMS Mortgage Survey.
A year ago, the 30-year fixed-rate mortgage averaged 2.73%. The PMMS report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
“This stagnation reflects the economic impact of the Omicron variant of COVID-19, which we believe will subside in the coming months,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Mortgage rates usually moves in concert with the 10-year Treasury yield, which reached 1.78% yesterday, compared to 1.85% on the previous Wednesday. The 15-year-fixed-rate mortgage averaged 2.77% last week, down from 2.80% the week prior. A year ago at this time, it averaged 2.21%.
Even though rates remained unchanged this week, most economists believe they will climb in the months ahead – but will still be close to record-low levels. The MBA forecasts that 30-year mortgage rates will reach 4% by the end of 2022.
“As economic recovery continues going into the spring and summer, mortgage rates are expected to resume their upward trajectory. In the meantime, recent data suggests that homebuyer demand continues to be elevated as supply remains low, driving higher home prices,” Khater said.
The originations landscape is shifting – is your business ready?
HousingWire recently spoke with Jon Gerretsen, SitusAMC Managing Director of Residential New Originations and Fulfillment Services, about the home buying boom and how lenders can gain market share and drive profitability in a white-hot purchase mortgage market.
Presented by: SitusAMC
The expectation of higher mortgage rates is based on the fact that the Federal Reserve will raise interest rates. The central bank said it will happen “soon,” though an exact timetable has not yet been disclosed. “With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Federal Open Markets Committee said in a statement.
So far, borrowers are trying to secure a refinance before rates go even higher, increasing mortgage applications. The Mortgage Bankers Association (MBA) showed on Tuesday that mortgage applications grew 12% for the week ending Jan. 28. The increase was buoyed by the trade group’s seasonally adjusted refinance index, which rose 18.4%. On the purchase front, the index was up 4% from the previous week.
Everyone agrees that the COVID-19 outbreak is set to have a long lasting impact on the U.S. economy, and the housing market is no exception.
In a new report this week, Apartment List has outlined some of the long-term changes it thinks will affect real estate.
1.
Reduced mobility
The
report notes that people’s mobility will be much lower than it was
previously, before spiking.
“Geographic
mobility generally declines during downturns, when a lack of job
opportunities catalyze fewer long-distance moves across market or
housing upgrades,” the report said.
A
moratorium on evictions and foreclosures will also help to reduce
mobility, but analysts say they predict a spike in people moving home
once the outbreak ends.
“Many
upgrade and downgrade moves will be postponed rather than canceled,
creating a reshuffling of households throughout the recovery,” the
researchers note.
There
will also likely be a future wave of movement as people relocate
following the outbreak in search of jobs, or to be closer to their
family. Young people are also likely to want to flee the next to form
their own households.
2.
Less affordable homes on the market
Experts
say affordable rentals and homes for sale are likely to be impacted.
Both were in short supply even before the pandemic, and the situation
will get worse, they say.
“Fewer
people moving means fewer homes available,” the report noted. “With
both pandemic and policy keeping people in place, affordable units
will become even more rare through the 2020 peak season.”
Luxury
apartment inventory, on the other hand, may be abundant.
3.
Housing inequality will increase
Those in the higher-earner wage bracket will likely take advantage of lower borrowing costs and refinance in order to reduce their mortgage payments. But lower-income households will struggle with the sluggish economic and rising competition for the remaining low-cost homes available.
“As
shelter-in-place orders cover a growing share of the nation, those
who are able to work remotely are at a distinct economic advantage,”
the report said. “Unfortunately, a correlation between income and
the ability to work from home reveals that the lowest earners will be
hit hardest by these measures. Fifty-two percent of full-time workers
who earn more than $100,000 annually say they can work from home. But
only 15% of workers who earn less than $25,000 are able to work from
home.”
4. Sight-unseen purchases will grow
Experts
say they’re also expecting an increase in the number of people who
buy a new home sight-unseen.
“Many
apartment communities are already enabling virtual tours in response
to the pandemic, and many renters and owners alike may soon be
evaluating their next home through a tablet screen,” the report
found. “Mainstream adoption of sight-unseen moves will bring both
opportunities and challenges for the housing market.”
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
During this epic recovery, which started on April 7, 2020, I was very adamant on Twitter that job openings would hit 10 million soon. Today, job openings are now trending near 11 million. As you see from the chart below, the labor market dynamics from the end of the great financial crisis, where job openings were just a tad over 2 million, is much different today. People forget that we had near 7 million job openings before COVID-19 hit us. The trend was always your friend with this data line that many people often ignore.
Jobless claims data looks solid. As the baby boomers retire, we need labor to replace them and grow jobs.
Luckily for the United States of America, our demographics are solid going out into this century compared to other countries. I have always stressed our American muscle is not just having king dollar but our demographics. This is why I use the term replacement buyers for housing, and it applies to workers too.
After I retired the America is back recovery model on Dec. 9, 2020, I knew the jobs recovery would lag all the other economic data for multiple reasons. However, we are getting closer to that September 2022 milestone. So, let’s look at the numbers today with seven months left until the September report:
—Feb 2020: 152,553,000 jobs —Today: 150,390,000 jobs
That leaves us with 2,163,000 jobs left to make up with seven months to go, which means we need to average adding 309,000 jobs per month. The unemployment rate currently stands at 3.8%.
Take a look at the jobs data and which sector added jobs in February: Construction jobs came in big again, and we didn’t have any negative sectors the last month.
Job openings for construction workers are still historically high today as the need for labor in America is very high. So much for the premise that robots and immigrants would take all the jobs in America.
Looking at jobs data is always about prime-age employment data for ages 25-54. The employment-to-population percentage for the prime-age labor force is 1% away from being back to February 2020 levels. The jobs recovery in this new expansion has been much better than we saw during the recovery phase after the great financial crisis.
Education and employment
Most Americans have always been working, even if they’re not college-educated. The labor force with the least educational attainment tends to have a higher unemployment rate. I started the hashtag A Tighter Labor Market Is A Good Thing to remind everyone that the economy runs hot when we have a tighter labor market. We want to see the kind of unemployment rates that college-educated people have spread to everyone because we have tons of jobs that don’t need a college education.
Here is a breakdown of the unemployment rate and educational attainment for those 25 years and older:
—Less than a high school diploma: 4.3%. —High school graduate and no college: 4.5%. —Some college or associate degree: 3.8% —Bachelor’s degree and higher: 2.2%.
The 10-year yield and mortgage rates
My 2022 forecast said: For 2022, my range for the 10-year yield is 0.62%-1.94%, similar to 2021. Accordingly, my upper end range in mortgage rates is 3.375%-3.625% and the lower end range is 2.375%-2.50%. This is very similar to what I have done in the past, paying my respects to the downtrend in bond yields since 1981.
We had a few times in the previous cycle where the 10-year yield was below 1.60% and above 3%. Regarding 4% plus mortgage rates, I can make a case for higher yields, but this would require the world economies functioning all together in a world with no pandemic. For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.
The 10-year yield has made a great attempt to break over 1.94% this year, as Germany and Japan’s bond yields rose noticeably in mid January. While our 10-year yield didn’t rise as much, once Japan and Germany broke out, our yields did get above 1.94% for the first time since 2019 for a few days. However, they haven’t been able to hold their increases.
As I am writing this, our 10-year yield is at 1.71%. I have stressed that it’s going to be very hard for the 10-year yield to break over 1.94% and have a higher duration, even with the hot economic growth with extremely hot inflation data. The trend in the 10-year yield, which has been going lower for decades, is simply too powerful. The 10-year yield didn’t collapse lower when we had deflationary pressures in 2009. Currently, the 10-year yield is not heading much higher as we see much higher year-over-year growth in inflation.
We have seen mortgage rates fall recently with the moves lower in the 10-year yield. If economic growth gets weaker toward the second half of 2022, it will be tough to have the 10-year yield getting above 1.94% and staying above that level. As you can see now, global yields need to rise for this to happen.
Economic cycle update
Now for an economic update. Some of the economic data has been cooling off as expected, but staying firm. We can’t replicate the same economic growth coming out of COVID-19. Eventually, we get back to our normal slow but steady economic growth patterns. Economics is demographics and productivity, and population growth is slowing here in the U.S., and productivity growth hasn’t been strong for a while now. We have limits to what we can do here in the U.S.
The St. Louis Financial Stress Index, a crucial variable in the AB recovery model, shows life lately at -0.5427%. The stock market has been more active lately, and the Russian Invasion has now put in a shock factor that has simply too many variables to account for. If things get better on that front, the markets will act better. However, we can see more stress in this index if things get worse. The oil and wheat shock in prices will impact global economies.
The leading economic index has had an epic recovery from the lows of April. However, last month it didn’t show any growth. When this data line falls four to six months, a recession red flag is raised. We aren’t there yet, but I am keeping an eye on this.
Retail sales have held up much better than I could have imagined; Americans are spending and even adjusting to inflation and retail sales are booming. However, the growth rate is getting back to normal after the crazy growth in 2021. The moderation in the data that I had expected is finally here but it has still been an impressive run for retail sales.
Americans’ personal savings rate and disposable income are healthy enough to keep the expansion going! Even though the disaster relief has faded from the economic discussion, both these levels are good to go as employment has picked up a lot from the COVID-19 lows with wage growth. We have to remember, households have more cash, more net wealth, and have refinanced their mortgages to have lower payments.
This is a big reason why households’ cash flow is much better now, and employment has been up a lot since the lows of COVID-19.
However, just like I had an America is Back recovery model on April 7, 2020, I have recession models and raise recession red flags as the expansion matures. I raised my first red flag recently when the unemployment rate got to 4%, and the 2-year yield got above 0.56%.
Once the Fed raises rates, the second recession red flag will be presented. This will most likely happen this month.
The third recession red flag is getting very close; the 2/10s are getting very close to inverting. I have been on an inverted yield curve watch since Thanksgiving 2021, and now it’s almost here. Typically we see an inverted curve before every recession. This red flag is very complicated, and once it is raised, I will go into more detail on how I look at this.
My job is to show you the progress of the economic expansion into the next recession and out — over and over again. Each economic expansion is unique, and with the Russian Invasion and massive price increases on oil and wheat, I have incorporated those factors into the equation. We have to take this one day at a time because the news can get better or worse with each passing day.
I’m back! After ten days boating through southeast Alaska (and two days of recovery), I’m ready to think about personal finance once again. Actually, it’ll probably come as no surprise that I never stopped thinking about personal finance. Even while we were skirting among ice floes, pulling up prawns, and admiring whales, my mind never strayed far from the topic of money. (I’m not saying this is a good thing, but it’s the truth.)
It’d be all too easy for me to share another sermon about the perils of Stuff — when you spend ten days on a 38-foot boat, living out of a single carry-on bag, you come to realize how little you actually need in life — but I feel like I’ve beaten that topic into the ground over the past few months. I’m working to cut down my dependence on things, and I know that many of you are, too; let’s save further discussion for another day.
Today, I want to talk about the value of social capital.
Though I don’t mention it often around GRS, the idea of social capital is constantly lurking behind the scenes. It’s a notion that can be hard to define. In fact, rather than try to do so from scratch, I’m going to quote myself. The next section is an excerpt from my book, Your Money: The Missing Manual.
What is social capital? You create social capital — mutual goodwill — when you volunteer at a soup kitchen, help your neighbor move a piano, have your Sunday School class over for a barbeque, or join a softball league. Any time you participate in your community, you’re generating social capital, both for yourself and for the other people involved. People with lots of social capital can find help when they need it; those with little social capital can spend a lot of time frustrated and alone.
The classic Christmas film It’s a Wonderful Life is a great illustration of social capital. Jimmy Stewart plays George Bailey, a man who repeatedly forgoes his own interests to help his friends and neighbors. It costs him — financially and mentally. When disaster strikes, Bailey decides he’s worth more dead than alive, and plans to commit suicide so that the proceeds from his life-insurance policy can set things right.
In the end, Bailey is saved when all the folks he’s made sacrifices for over the years come to his aid. Sure, it’s a schmaltzy, feel-good moment, but it’s a fine example of social capital in action. When Bailey’s brother declares that George is “the richest man in town”, he’s not joking: Bailey may no have much financial capital, but he’s flush with social capital.
You don’t have to sacrifice your own interests to create social capital. You can often create win-win situations where everyone profits. But the best way to build social capital is to help others without expecting anything in return.
There’s more to wealth than just money. Social capital is just as real as financial capital — and often more valuable.
Note: For an in-depth look at social capital, pick up a copy of Bowling Alone by Robert Putnam. But be warned: It’s a dry read.
The extraordinary power of compound kindness Social capital comes from building a broad network of relationships, a network that you can draw upon to help yourself and help others. This isn’t networking in the smarmy, slimy sense, but in the authentic “I’m your neighbor and your friend” sense. A complex network of people will have thousands (millions!) of connections, creating a powerful web of support. (You can see great examples of this in Ben Franklin’s autobiography and in Keith Ferrazzi’s Never Eat Alone.)
These networks are usually built through everyday kindnesses. These actions compound (just like compound interest) to yield larger returns in the future. From my trip to Alaska, here are some examples of the sorts of small actions that help create community and help build social capital:
Southeast Alaska is peppered with small villages separated by large expanses of water. Boaters (and not just my skipper John) stop to check on each other, and on the people they know in out-of-the-way spots.
Another way to cope with this isolation is book exchanges. Many of the small airports and harbors contain bookshelves where folks can discard the books they’ve finished and pick up new ones. This is a brilliant idea!
We had miserable luck crabbing and fishing during the first part of our trip. One night, a small charter boat invited us over to share in the halibut they’d caught earlier in the day. Later, after we finally caught and filleted our first salmon, we handed off some of the meat to a passing boat.
Some of the summer boaters actually live in southeast Alaska. These folks have vehicles in their home towns, and they share them with other boaters they know well. When we docked in Sitka, for example, we were able to borrow a truck from Sailboat Bob so that we could run our errands and drive to dinner.
Every morning at 6:30, John gets on his ham radio to check in with the Great Northern Boaters Net, where dozens of different boats check in throughout the week, giving updates on their progress. This allows folks to keep tabs on each other, to ask for and receive advice.
These are just a few of the ways I saw social capital in action during my trip; there were many other examples, both large and small. Taken together, the community spirit I saw was amazing.
Social capital in real life Social capital plays an active role in your life, too. The broader your circle of friends, the bigger your family, the better you know your neighbors, and the more involved you are in your community, the more social capital you have. (And the more social capital you contribute to others — it’s a reciprocal thing!)
The Dark Side of Social Capital. As great as social capital is, it’s not without its downsides. Though they’re built on the same stuff I’m talking about here, Good Ol’ Boys networks can make it difficult for outsiders to become part of a group. Some people contribute only with the expectation of return. This sort of manipulative behavior leads to minor versions of Don Corleone from The Godfather: They’ll do you a favor, but only because they want you to owe them. For social capital to be productive, it has to promote the welfare of the community.
Here are some everyday examples of how you and I generate social capital:
When I loan my rototiller to a friend, that builds social capital. When I then crash my bike and have to ride to his house for first aid (yes, this really happened), that generates social capital.
When your community comes together to clean up a run-down park, that generates social capital.
You create social capital when you join a bowling league, a knitting circle, or a book group. You create social capital when you go to church or join a social club.
When you stop to help a stranded motorist, you’re creating social capital.
Social capital grows when you share the surplus from your vegetable garden with your neighbors and co-workers.
As you can see, social capital is most often generated by doing things that help other individuals — or your community. It exists everywhere, but some places have more of it than others.
I’m not sure why I was so struck by the community ties I saw in Alaska. Are these ties really stronger than elsewhere? Were they just more obvious because they took different forms than I’m used to? How can I learn to see (and contribute) to the social capital here in Oak Grove, Oregon?
I don’t have the answers to these questions, but I’ll certainly be thinking about them a great deal during the coming weeks. As I say, social capital is always lurking in the background here at Get Rich Slowly. There’s more to being rich than just having a lot of money; there’s real wealth in having a large network of friends, too.
Also don’t forget to follow Get Rich Slowly on Facebook and Twitter.
Forget “love.” Today data hurts. Durable Goods fired a warning shot at 8:30am. Consumer Confidence and New Home Sales finished the job at 10am. With that, a modestly stronger start gave way to a logical sell-off of moderate proportions. By 11:30am, the losses had run their course and bonds drifted sideways for the rest of the session–perfectly inside the prevailing range.
Durable Goods
1.7 vs -1.0 f’cast, 1.1 prev
Durables, nondefense, excluding aircraft
0.7 vs 0.0 f’cast
New Home Sales
763k vs 675k f’cast, 683k prev
Consumer Confidence
109.7 vs 104.0 f’cast, 102.5 prev
09:24 AM
Decent recovery after initial morning weakness. 10yr down half a bp at 3.717. MBS up 1 tick (.03)
10:07 AM
Weaker after New Home Sales data and consumer confidence. 10yr up 2.2bps at 3.745. MBS down nearly an eighth.
02:48 PM
Flat all afternoon after AM losses. 10yr up 4.5bps at 3.768. MBS down just over an eighth.
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Most mornings after Stephen Garten wakes up at his home in Austin, Texas, he goes into his backyard and starts pacing, preparing himself for what’s next. “It’s brutal,” says Garten, 37, the founder and CEO of social impact company Charity Charge. “It’s a real challenge every day.”
He’s talking about lowering himself into a 66-inch-long and 24-inch-wide stainless steel tub clad in customized zebrawood and submerging himself up to his neck in water that he sets at 39 degrees Fahrenheit, with water circulating at 1,400 gallons a minute. “It’s like being in a river,” he says of the flow rate produced by this particular vessel, a Blue Cube cold plunge.
It’s an experience that Garten typically tolerates for less than two minutes at a time, once or twice a day. And it comes at a price of $19,000. Blue Cube, based in Redmond, Ore., makes cold plunge units that cost between around $18,000 and $29,000.
“Cold plunging has made a profound difference in my life,” Garten says. He says it has brought him health benefits including stress management.
Previously the domain of athletes, bathing in cold water or ice has become a mainstream wellness trend across the U.S. The practice goes by many terms, like cold plunging, ice bathing and cold-immersion therapy. Water temperature below 59 degrees Fahrenheit is generally considered cold immersion. People who swear by it say they have experienced wide-ranging health benefits, like reduced anxiety, alleviated joint and muscle pain and boosted energy and focus.
But while many people are experimenting with do-it-yourself methods—like taking cold showers or filling kiddie pools, horse troughs and unplugged chest freezers with cold water or ice—some enthusiasts have leveled-up their at-home cold plunging setups with sophisticated receptacles priced at tens of thousands of dollars and up.
Developers, meanwhile, are adding cold plunges to amenity-rich luxury complexes like 53 West 53 in New York and Cipriani Residences Miami, betting that cold immersion is here to stay.
“Ice bathing seems like a trend, but people have been doing this for thousands of years,” says Jonathan Coon, co-founder of Austin Capital Partners, which is the developer of Four Seasons Private Residences Lake Austin, 20 minutes from downtown Austin, slated to open in 2026.
In addition to 188 residential units starting at $4.1 million, the Lake Austin property on 145 acres will have 76,000 square feet of indoor wellness and sports facilities, including a 12,000-square-foot orangery, 82-foot swimming pool, sauna, steam room and, of course, cold and hot thermal baths.
Amenities covering 100,000 square feet is a key reason that Onyx W.D. Johnson and Cristian Santangelo bought a $2.2 million two-bedroom, 1,123-square-foot apartment in New York’s One Manhattan Square, an 80-story building located on the Lower East Side. Facilities include a spa with a tranquility garden, 75-foot saltwater swimming pool, hot tub, sauna, steam room and hammam with a cold plunge set between 55 and 58 degrees Fahrenheit. The couple moved into the apartment in May 2021.
Johnson and Santangelo quivered at the idea of cold plunging until they started seeing other people dipping and discussing the health benefits. “We decided to give it a try,” Johnson says.
Now cold plunging is part of their wellness regimen. Johnson, 50, who runs a management consulting firm, uses the hot pool, steam room and sauna, and then cold plunges for 45 seconds to a minute. He says this routine speeds up his training recovery time, helps him think clearer and improves his alertness and mood. Santangelo, 45, who is a management consultant, says the ritual helps him calm down and fight anxiety and stress.
Diamond Spas & Pools, based in Frederick, Colo., is a custom manufacturer of luxury pools, spas and soaking tubs for homeowners globally. The company added cold plunges to its portfolio in 2015 and saw one or two orders annually until 2019, when it experienced a sales surge. “Our cold plunge projects have increased 10 times since then,” says Mitch Martinek, the company’s design manager.
Martinek attributes the uptick to several factors. Today’s homeowners want gym and spa amenities at home and on-demand, cold therapy health benefits are better known now, and there are lingering pandemic concerns over public wellness facilities.
The company’s cold plunges, which chill water to between 40 and 55 degrees Fahrenheit, are made from stainless steel or copper and can be camouflaged in tile, stone or wood. The pools can go indoors or outdoors, come in any size and can work with home automation systems. The average cold plunge costs about $45,000, with elaborate projects running closer to about $65,000.
One of the company’s more unique cold plunges had an acrylic bottom and was in a high-rise building. “It was on a deck with a fire pit below,” Martinek says. “The homeowner wanted to be able to look up through the cold plunge.”
John Thorbahn bought a four-bedroom, 5,500-square-foot single-family home in Hingham, Mass., south of Boston, in March 2020 for $1.6 million. He owns a cold plunge from Phoenix-based company Morozko Forge, founded in 2018. Morozko Forge’s entry-level unit costs $12,850; its upgraded version costs $19,900.
Morozko Forge’s ice baths make ice. While the stainless steel tub is filled with cold water, an ice slab starts building at the tank’s bottom. At about 1-inch thick, the ice detaches and floats to the water’s surface. The ice can be broken up with an implement like a rubber mallet if needed.
Thorbahn, 63, who is the managing director at consulting company NFP, ice bathes most days for two to three minutes at 33 to 34 degrees Fahrenheit. His wife, Jana Thorbahn, 59, ice bathes, too. “The older you get, the more you want to live longer,” says Thorbahn, whose home also has a gym, sauna, red light therapy room and hot tub. “You start investing in protocols to help you be healthy.”
While many cold plungers have developed their own ice bathing rituals, choosing everything from their preferred water temperatures to time limits, Dr. Susanna Søberg, a Danish Ph.D. metabolic scientist and founder of the Soeberg Institute, is one of the world’s experts on the health benefits of cold immersion, which she has been studying for nine years.
In 2021, Søberg published research on cold exposure and hot exposure, which is called “contrast therapy” if the cold and hot exposures are performed in succession. Studying Danish winter swimmers, Søberg identified that a short plunge in cold, moving water combined with sauna use shifts the body’s nervous system and creates physiological changes, like boosting metabolism, lowering inflammation and releasing neurotransmitters that improve cognitive performance and mental health. “You are activating your whole body system,” Søberg says.
In a field that hasn’t been widely studied by the medical community, Søberg has developed what she says is the only scientifically backed cold immersion protocol for reducing stress using contrast therapy and breathing: 11 total minutes of cold immersion combined with 57 total minutes of heat, across two to three days a week. The goal of her method is to expose the body to the smallest amount of healthy stress needed to reap health benefits. “Staying in cold water or heat longer may not be beneficial or necessary,” she says.
Søberg says cold immersion carries the rare risk of cold water shock that can cause confusion or fainting, but the risk increases if a person does hyperventilating breathwork before or during cold water immersion. She also says cold plunging might not be good for people with heart disease or high blood pressure. Søberg advocates for cold plunging with others, and practicing slow, nasal breathing in the water.
Contrast therapy is why Sausalito, Calif.-based company Yardzen says most of its cold plunge projects involve saunas. Yardzen is an online landscape and home-exterior design company that works with homeowners across the U.S. The company’s co-founder and CEO Allison Messner says wellness yards—encompassing everything from cold plunges to saunas to meditation spaces to forest bathing—is one of Yardzen’s top 2023 trends.
“Peak luxury is having both a cold plunge and a sauna in your yard so you can experience cold and hot therapy,” Messner says.
Tobias Lawry, 51, and his wife, Christine Lawry, 50, live in a three-bedroom 1963 Midcentury Modern house in Dana Point, Calif. They purchased it in October 2018. Between July 2021 and October 2022, they worked with architect Chris Light, designer Frank Berry and builder Crawford Custom Homes to renovate their 3,000-square-foot house to honor its original period intention while modernizing it. This included turning a bedroom into a wellness room, which opens into a backyard with a pool, sauna and Blue Cube cold plunge.
The Lawrys, who run an estate-management and concierge services company called LPM, keep their Blue Cube at 47 degrees Fahrenheit. They typically cold plunge in the evening and on weekend mornings.
Stephen Garten in Austin also has a tricked-out wellness yard: In addition to his Blue Cube, he has a barrel sauna from Almost Heaven Saunas, which are manufactured in West Virginia and start around $7,500. He also has a stock tank pool from Cowboy Pools, an Austin-based company that has pool packages starting around $2,000.
He was inspired to create a backyard oasis where he and his fiancée, Katie Snyder, can have friends over. “It’s wellness,” Garten says, “but it’s entertainment too.”
Major players in the household lending market are Bank of America Corporation, JPMorgan Chase and Co., Pentagon Federal Credit Union, Discover Bank, Member FDIC, LoanDepot, Spring EQ, A and A Dukaan Financial Services Private Limited, ABC Finance Limited, Australia and New Zealand Banking Group Limited, Barclays PLC.
New York, June 28, 2023 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Household Lending Global Market Report 2023” – https://www.reportlinker.com/p04590164/?utm_source=GNW , Citizens Commerce Bancshares Inc., Commonwealth Bank of Australia, Flagstar Bancorp Inc., HSBC Holdings PLC., Morgan Stanley, Navy Federal Credit Union, Roostify, and Royal Bank of Canada.
The global household lending market is expected to grow from $4,048.14 billion in 2022 to $4,520.83 billion in 2023 at a compound annual growth rate (CAGR) of 11.7%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The household lending market is expected to reach $6,798.66 billion in 2027 at a CAGR of 10.7%.
The household lending market includes revenues earned by entities by providing conventional loans, secured and unsecured loans, and open-end and closed-end loans to borrowers for household lending.The market value includes the value of related goods sold by the service provider or included within the service offering.
Only goods and services traded between entities or sold to end consumers are included.
Household lending refers the act of loaning money to purchase a home or household.The debtor pays back the borrowed funds and interest according to the loan repayment plan.
Household lending can aid in raising the budget for a home purchase using the loan amount provided.
North America was the largest region in the household lending market in 2022. The regions covered in the household lending market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The main types of household lending are fixed-rate loans and home equity lines of credit, which are provided by banks, online lenders, credit unions, and others.A fixed-rate loan is one in which the interest rate is fixed throughout the loan or only a portion of it.
Various sources included are mortgage and credit unions, commercial banks, and others. The main types of interest rate are fixed-rate mortgage loans and adjustable-rate mortgage loans.
The huge spike in housing costs is expected to propel the growth of the household lending market in the coming future.Housing costs is rent and mortgage costs (principal repayment and mortgage interest); or a measure that is more inclusive and takes into account the costs of obligatory services and charges, routine maintenance and repairs, taxes, and utility bills.
The increased housing costs limit an individual’s capacity to buy a house by full cash payment and motivate them to apply for a loan.So, the increasing housing costs is boosting the household lending market.
For instance, in November 2022, according to the Federal Housing Finance Agency, a US-based autonomous federal body established as the Federal Housing Finance Board’s regulatory substitute, in the United States between the third quarters of 2021 and 2022, the price of homes increased by 12.4%. In contrast to the second quarter of 2022, home prices increased by 0.1 percent. Therefore, the huge spike in housing costs is driving the household lending market.
Technological advancements are the key trends gaining popularity in the household lending market.Major companies operating in the household lending market are focused on developing innovative technologies to strengthen their position in the market.
For instance, in October 2021, Roostify, a US-based developer of a digital lending platform for home loans, launched the ’first of many’ APIs (application programming interface) on its existing lending platform developed to automate data extraction from documents and document validation in the financing process.Roostify Document Intelligence (RDI) Service, the company’s newest technology, will employ AI (artificial intelligence) to identify, validate, and extract data from documents connected to mortgages.
Users can receive automatic feedback from the technology when they upload documents that are wrong or ineligible, and errors can be flagged before it cause a data input problem. As an API, this one may be integrated into any step of the lending process and serve a wide range of use cases that can take advantage of the automated identification and extraction of data from the mortgage document collection.
In March 2023, Barclays PLC, a UK-based multinational bank, acquired Kensington Mortgage Company Limited for an undisclosed amount.Through the acquisition, Barclays enhanced its current mortgage product portfolio by integrating a better-specialized mortgage lender with a solid reputation in the UK market, further strengthening its product capabilities, and aligning with Barclays’ strategic aim of delivering next-generation, digital consumer financial services.
Kensington Mortgage Company Limited is a UK-based mortgage lender for first-time purchasers, self-employed people, contractors, and others.
The countries covered in the household lending market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
The household lending market research report is one of a series of new reports that provides household lending market statistics, including household lending industry global market size, regional shares, competitors with a household lending market share, detailed household lending market segments, market trends and opportunities, and any further data you may need to thrive in the household lending industry. This household lending market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry. Read the full report: https://www.reportlinker.com/p04590164/?utm_source=GNW
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