Will we ever be normal again? COVID has brought significant changes to our lives, and many will be permanent. Right now, many homeowners are in the money, and they’re dipping into it as residential real estate values skyrocket and cash-out refinancing balloons.
Due to strained housing supply and increased demand driven by extremely low mortgage rates, the average 30-year fixed-rate mortgage dropped to 2.71% this week. Some 16.7 million residential properties were considered equity-rich in the third quarter of 2020—about one out of every four homes, according to ATTOM Data Solutions. Owners of homes that fit this definition hold 50% or more equity in their properties. Cash-out refinancing has boomed as borrowers homeowners took out $39 billion of equity without selling their homes.
As homeowners spend more time in their houses because of COVID, there’s an increased demand for space and comfort. In-home classrooms and offices are on the rise, and so is the desire for more usable outdoor space. Rather than sell their home and jump into an overheated market searching for a bigger and better place, some homeowners are transforming their existing homes with their home equity money.
Now, Harvard researchers predict that the annual growth in renovation and repair spending will rise to 4.1% by the first quarter of 2021, which would mean a jump in spending from $332 billion currently to $337 billion by the end of 2021.
The Omaha World-Herald examines this question. “For some, retirement arrives not by choice but by circumstance. Unemployment, family, or health issues may make it necessary to leave the workforce before you’re ready, which can affect every aspect of your plans.” They say there are five things you should do ASAP if you’ve had to leave the workforce ahead of schedule.
1. Get a clear picture of your financial reality by listing all your assets and sources of future income
2. Decide if you’ll claim Social Security right away or delay.
3. Decide on a safe withdrawal rate from savings if you can’t live on Social Security
4. Make a budget
5. Make any necessary lifestyle changes ASAP
Can you afford your current lifestyle? If not, act quickly to make spending cuts to preserve your nest egg.
Sometimes, this means making significant lifestyle changes such as downsizing, getting rid of one of your vehicles, or relocating to an area where your money will go further due to a lower cost of living. If you have to make these changes, do it ASAP.
Styl knows from experience that financial distress can lead to foreclosure and downsizing. Styl Properties, Inc. is here to help homeowners out of any distressed situation.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.