March 8th, 2021 4:23 PM by Richard Sardella MLO.100007700/NMLS 233568
Relocation for millions of retirement-aged Americans
Carpe diem. Seize the day. It seems because of life-changing phenomena like the pandemic that caused layoffs, lockdowns, and a real estate market that favors selling, the stars seem to be aligned for retirement for a huge number of Americans.
According to Realtor’s Erica Sweeney, more people in the U.S. retired than ever before in the past year. Citing a Pew Research Center report, she says, “Roughly 28.6 million baby boomers left their work life behind in the third quarter of 2020 alone—about 3.2 million more than over the same period in 2019.” She reasons that some may have lost their jobs as casualties of COVID-19 and don’t want to find another during a public health crisis, others simply jumped the gun on the retirement date they had in mind, and yet others may have simply felt like a pandemic was as good a time as any to live in the moment and begin enjoying their so-called golden years.
Of course, selling a home right now (and for more money than in past decades) makes their decision to retire and/or relocate a whole lot easier. “With home prices climbing, selling their homes for a big payout and moving to a more affordable destination also just makes financial sense for many baby boomers,” says Sweeney, who adds that wherever these large groups of retirees go, they’ll have a significant impact on a region’s economy, influencing what kinds of homes are built. They’ll play a large part in real estate prices, and even what kinds of jobs are available, because baby boomers make up a huge generation — larger than the one that came before it and the Generation Xers that followed.
“Whatever they do has long-lasting ripple effects,” says Sweeney. She reports that last year Census Bureau estimates say 313,000 people over age 65 moved to a new state. What makes a place attractive to them? For one, locales that blend urban and suburban environments. Think lower taxes and cost of living, access to top-notch health care, walking trails, parks, and plenty of restaurants and cultural attractions, and you’ve got a recipe for an influx of boomers. But that’s not all. Wherever adult kids and grandchildren are located is a huge draw as well.
Source: Realtor | TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market worsened by -20bps. This was enough to move rates slightly higher last week. We saw high rate volatility through most of the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to move rate markets this week. 1) Stimulus, 2) Central Bank, and 3) Treasury Dump
1) Stimulus: The Senate has completed their work and has gotten the budget (which includes the $1.9T Stimulus) to the House. The House will have a procedural vote tonight and then can vote on it on Tuesday. However, there are still some hurdles. The Senate version does not include the minimum wage provision and limits eligibility for the $1,400 checks, and dilutes some other pork in the overall budget. This will not sit well with some progressive voters in the House. The House has a slim majority, and if a block of a few Dems votes against it, it means more committee work and more time in the reconciliation process. The timing of all this will have an impact on pricing.
2) Central Bank: We get key interest rate decisions and policy statements from the Bank of Canada and the European Central Bank. The key for the ECB is how they handle the recent rise in bond yields in their policy.
3) Treasury Dump: We get two very key Treasury auctions this week. Typically, the 10-year auction has little impact on mortgage rates, but it could have a significant impact for this week. Of course, so can the 30-year bond auction. Here is this week's schedule:
This Week's Potential Volatility: High
Once again this week, we expect rate market volatility to remain elevated. Rate markets will be paying close attention to the pushing through of the "stimulus" deal. The one piece of economic data that can move rates this week is the consumer price index (inflation measure) on Wednesday.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.