U.S. Housing Market | The Priority of Giving

U.S. Housing Market: The U.S. gross domestic product (GDP) is made up of several different factors. The housing market contributes approximately 15-18%, which includes residential investment (construction of new homes, remodeling, broker’s fees, etc.) and housing services (rent and utilities). All that to say, the housing market is always an interesting aspect of the economy to follow because it can help drive growth (jobs, increased property tax revenue). A recent report from Apollo Chief Economist shared 10 facts about the U.S. housing market:

• U.S. homes are getting smaller: The size of new homes being built has declined by 12% since 2016.
• The median age of all homebuyers is now 49 years old, up from 31 in 1981.
• Our home price model predicts that house prices will increase 10.8% over the coming year.
• 40% of U.S. homes don’t have a mortgage.

• The average number of homes sold per real estate agent yearly is 21, down from 54 in 2004.
• Households’ equity in real estate is at a record-high 73% of housing values.
• A record-high 36% of Americans say they would rent if they were going to move.

• More than half of all mortgages outstanding have an interest rate below 4%.

• 95% of mortgages outstanding are 30-year fixed rate.
• 63% of all mortgages outstanding were issued after 2018.

Currently, with mortgage rates as is, monthly payments on a new mortgage average $2900.

All this while inventory remains a bit low:

Cyber Monday: For Cyber Monday, a few thoughts about what our most content clients have in common:

• They prioritize having over getting.
• They prioritize maintenance over replacement.
• They give consistently.

Every ad you see is compelling you towards getting, not having. But getting happens once. It’s a peaked moment of reward, followed by diminishing returns.

Think of what you, your kids, or your grandkids have gotten over the last few holidays. Which ones were flops? Which ones did you/do you use all the time?

Giving and receiving are clearly distinct from one another in so many ways; perhaps most significant is that one seems to be regularly more enjoyable than the other. That’s been our experience with clients and our own families. We’d welcome your take on the matter as we always try to understand this important dynamic better.

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov. Past performance is not a guarantee of future results.