Tag Archives: alternative investments

Monthly Mortgage Payments Versus Monthly Rent
Not so long ago, the housing market ballooned so high that monthly mortgage prices were much higher than monthly rental prices. This disparity hasn’t been seen since the early 80s. Typically, as mortgage rates rise, rent prices also rise along a normal rate of disparity. These rates allow buyers or renters to decide whether they can afford the monthly mortgage rate, or would be better off with just renting a home. Usually, the mortgage rate will be higher than the rental rate. However, after the housing market crashed, mortgage rates fell so sharply that they were actually lower than the average rental rate. With so many calamities in the housing marketing, especially the high rate of foreclosures, many potential buyers opted to pay higher rents. The scary prospect of trying to own a home, alongside the risk of foreclosure, forced people to become or stay renters. However, the...
Housing Market Hopes on the Rise
Last summer existing home sales reached a peak of 5.38 million, but according to the seasonally adjusted rate basis (SAAR) reported in January, they have since declined to 4.62 million.  This 14% decline has left the market feeling a bit weak, but there is some good news on the horizon, as many experts predict this weakness to be only temporary. What is causing the Weakness? There are several factors causing the ups and downs of the housing market. From increased mortgage rates and prices, to a decrease in available distressed sales and investor buying. Another theory being discussed among those is real estate, is the influence of the Polar Vortex, which has gripped most of the country this winter. With so many people not really being able to go outside because of bitter cold temperatures, it makes searching for a new home less of a priority. There may not...
Foreclosure Rates Still High in Some Florida Cities
The real estate market might be on the rebound for most of the United States, but in some cities foreclosure rates are still on the rise. According to the January 2014 U.S. Foreclosure Market Report™ recently released by RealtyTrac®, default notices, scheduled auctions and bank repossessions were up by 8 percent. While this is an increase from December 2013, it is still lower than it was in January 2013. It is no surprise that foreclosure activity would rebound in January, since things tend to become quiet over the holidays. However, RealtyTrac reported that the 8 percent increase seen in January is the largest since May 2012. Even with this increase, the foreclosure rates for the entire country is still on the decline and has been for the past 40 months. Florida One of Top States for Foreclosures While the population in Florida may be growing, so are its...
As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
Why Self-Storage is Good for the Community
The Wall Street Journal reports that there are currently 2.3 billion square feet of self-storage space in the U.S., which equates to approximately 7 square feet for each person in the United States. This includes the 8.9 million square feet added in 2012 and 16.5 million square feet expected to be available by the end of 2013. The downturn in the U.S. economy created a growth spurt within the self-storage industry among college students, densely populated city dwellers, shortage in demand, and households making do with the space they have instead of adding-on to their existing residences. According to documents filed with the United States Securities and Exchange Commission (SEC), Public Storage, the nation’s largest self-storage company, had 2,078 facilities in 38 states within the U.S. and 189 storage facilities in 7 western European nations. Not only is Public Storage large, but also profitable and growing....
Alternatives to the Stock Market Bubble
On Friday, November 8, all 3 of the major U.S. stock indices, the Dow Jones Industrial Average, NASDAQ, and the S&P 500, all closed at all-time record highs. As a whole, the U.S. stock market has been soaring recently, bringing untold ‘paper profits’ to millions of investors. However, there are people associated with the market that believe it to be significantly overvalued. Fund manager John Hussman points to the following measures in his weekly Hussman Funds Newsletter during the first week of November:
  • Cyclically adjusted price-earnings ratio (current P/E is 25X vs. 15X average)
  • Market cap to revenue (current ratio of 1.6 vs. 1.0 average)
  • Market cap to GDP (double the pre-1990s norm)
These are not just slightly overvalued indicators, they are grossly overvalued indicators. In his same newsletter, Hussman provides commentary that supports his claim that the stock market crash that is forthcoming will be extreme, somewhere in...
Rolling Over Your 401K
One of our primary services at EquiAlt is handling rollover 401K accounts. The pension funds of your grandparents have given way to a newer type of workplace retirement account which is called a 401K. More formally, this is a defined-contribution pension account named after subsection 401K of the Internal Revenue Service Tax Code which establishes the tax rules on this type of accounts. Many employers offer a 401K retirement account. In most cases, you defer a portion of your current earnings until retirement and in return, your employer matches some portion of your contribution. Each year, a greater percentage of your retirement account becomes vested. This means that even if you separate from your employer, your contribution plus the vested amount of the employer’s contribution is yours to keep. You are allowed to move your account to another investment advisor, which is referred to as...
Looking for a Leader When it Come to Mortgages?
Taking a broad view of mortgage interest rates, one could easily argue that compared to interest rates of the past several decades, today’s rates are comparatively low. However, no one has the opportunity to finance a home with comparison rates from yesteryear. The reality is we are at the mercy of the interest rate markets at the time we are looking to finance a property.  The leading 30-year, fixed rate mortgage in September ascended to 4.53% from 3.35% last spring. That small 1.2% change in interest rates may not seem like much on the surface, but as we drill down, it plays a much larger role in easing pace of the U.S. economy. In late October, Bankrate.com reported that households earning the median income in only 8 of 25 major U.S. metropolitan areas could afford the median priced home in the same metro area. That is...
Back Again: Bubble-Like Markets
A lot of people are worried that stocks are headed for another crash. Stocks have been rising almost daily, but the missing component is the expected backtracking that comes along with health ascents. And so the questions loom, when is the crash going to occur? Why is this happening is and what can we do to prevent it? Larry D. Fink, whose company, BlackRock Inc., is the world’s largest money manager ($4.1 trillion in assets), has recently stated that the Federal Reserve Policy is contributing the “bubble-like markets”. Fink is quoted as saying, in October 2013, that “We’ve seen real bubble-like markets again. We’ve had a huge increase in the equity market. We’ve seen corporate-debt spreads narrow dramatically”. The most apparent danger for stocks is, in essence, the Federal Reserve; and, because of the contributing factors, it is now imperative that the Fed starts to reduce their heavy...
You Don’t Need to be a Weather Man to Know It’s Warm Outside
To simply make the declaration that “it is warm outside” can be a reckless statement, depending on your audience. A person from Orlando, FL will likely have a different definition of ‘warm’ than someone from Juneau, Alaska. You need more facts than just the air temperature to best assess the situation and make a comment that fits the scenario. Recently, RealtyTrac LLC. released its recap of U.S. foreclosures for the United States, during the 3rd quarter of 2013. The report found there were 131,232 properties indicating a default notice, scheduled auction, or bank repossession during September. On the surface, this may appear like a lot of properties, or referring back to our weather analogy, “warm”. In actuality, we need to view it in context of where the U.S. real estate and mortgage industries have been over the past few years. This number actually represents a...