Debts aside, low rates, younger buyers will keep housing demand strong
Despite the Fed’s rush to cut interest rates by 50 basis points on Tuesday, amid growing Coronavirus (COVID-19) pandemic fears, concerned stock market investors jumped on a sell-off spree. There’s better news, though, at least for lenders and consumers. Macroeconomic data is suggesting the US housing market is in good shape.
Lower rates combined with new construction and improved affordability as wages rise faster than home prices, will fuel the housing market as a whole and foster an already strong housing demand despite consumer rising debt. The overall US household debt totaled $14.2 trillion in the fourth quarter of 2019, up $601 billion from the same quarter of 2018, “marking the largest annual increase since 2007,” according to a report published by the Board of Governors of the Federal Reserve System. It found, in large part the increase is due to very low mortgage and refinancing rates that helped bring home purchase loans for 18- to 29-year-olds to the highest level since 2007. Data show it is a good market for younger homebuyers, especially Millennials.
An important take away from the Fed’s February report, according to a Bloomberg analyst is that in the fourth quarter of 2019, less than 5% of outstanding debt was delinquent and 3.1% over 90 days delinquent, which is slightly higher than in the years prior to the Great Recession. In the fourth quarter of 2009, 11.9% of debt was delinquent, and 8.6% seriously delinquent.
The Fed data also show US households are in much better shape because the ratio of net worth to disposable income is near its post-World War II high, as the personal savings rate stands at 7.6%, compared to its low of 2.2% in July 2005.
Cybersecurity talent shortage looms ahead
There is a new hurdle in the race to build secure vital digital business infrastructure across industries, and financial markets including mortgage lending: a significant shortage of talent on the cybersecurity side.
By 2021, up to 3.5 million cybersecurity jobs will be open but there are not enough cybersecurity professionals available to fill them, according to Cybersecurity Ventures.
Traditionally, the federal government trained cybersecurity experts for the government, but many of those professionals eventually would wind up in the private sector, hired by businesses looking for protection against sensitive data breaches or fraud that lead to financial, reputational, or regulatory compliance losses.
Industry experts, such as Jay Kaplan, CEO of Synack, a company he co-founded with a NSA and US Department of Defense technical security colleague, use alternative solutions to bridge the talent gap. Synack’s crowdsourced security platform helps detect online business security flaws, he explained in an interview, and evades the persisting shortage of digital security professionals. Synack may invite hundreds of top hackers from around the world to test system security vulnerabilities in a private setting or anonymously, he said.
It’s Women’s History Month!
Let’s celebrate all the inspiring, brilliant, accomplished, hardworking women in mortgage lending who continue to break down barriers and influence a male-dominated industry.
Follow amazing leadership stories about women on social media with #WomensHistoryMonth. Celebrate mentors, mentees, professional role models, peers and influencers!
Statistics show women have achieved remarkable progress in education levels, business ownership, wealth creation that leads to social mobility.
So, how’d they do it? It doesn’t hurt to put your brand at the nexus of strategic partnerships, stellar recruitment and brilliant tech investment.
First let’s look at tech. Sotheby’s International Realty was the first real estate brand to launch and implement mixed reality into its reality app, which merges the real world with virtual home staging, allowing for digital property visits. The company also offers a marketing suite of technology tools consisting of best-in-class and exclusive apps, to its agent network.
As for partnerships, the brand entered into an affiliation with Bloomberg.com as the exclusive launch sponsor for a new luxury properties marketplace. Last year, the Realty integrated its affiliate network and company-owned brokerage into one global organization, and 50 new Sotheby’s International Realty offices were opened. That brings the brand’s presence to 1,000 offices in 70 countries and territories and more than 23,000 affiliated sales associates worldwide.
“This year observed significant growth for the brand’s existing affiliate companies in the United States through recruitment efforts and strategic mergers and acquisitions,” the company said in a statement. “Most notably, the brand increased its market presence in Brooklyn, New York; the Greater Boston area, Massachusetts; and Indiana.”
- In 2019, roughly 6.6% of Fortune 500 CEOs and 12% of CFOs were women
- Women own close to 10million businesses and represent the majority in the US workforce
- Women are the primary or only earners in up to 40% of U.S. households
- Today single women own about 1.5 million more homes than single men (LendingTree)
- More women are graduating from college than men
Despite progress, American women still face a gender gap. For example, single women made up 17% of all homebuyers in 2019, compared 9% share for single men. At the same time, a study from Yale found single women are buying homes for an average of 2% more than single men.