Are you thinking about buying a house? Well, let me tell you, it’s a wild ride out there in the housing market and something has to give. The Mortgage Number Index is like the Richter scale for earthquakes, except instead of measuring seismic activity, it measures your financial stability. And let me tell you, things can get pretty shaky.
Mortgage Number Dial
Let’s say you’re making a cool $114,000 a year and you’re eyeing a $500,000 home with a 20% down payment of $100,000. That leaves you with a loan of $400,000, with a credit score between 680-719. Sounds doable, right? Well, it all depends on the interest rates.
Today’s Housing Market: Past, Present, Future
November of 2021, interest rates were 3.25% for a 30-year fixed mortgage, resulting in a Mortgage Number of 1000, which is the highest possible outcome. But fast-forward to today, and the interest rates have jumped up to 6.00%. That puts your Mortgage Number at 876, which means your debt-to-income ratio is now 37.9% instead of the previous 28.8%.
What does that mean for you? It means you’ll be paying $2,399 a month instead of $1,529 or $870 more per month. And that’s not even factoring in the cost of avocado toast.
But hey, there’s always hope, right in the housing market? Maybe interest rates will magically go down. Or maybe housing prices will drop. Or maybe aliens will come down and give us all free houses. Who knows? In the meantime, potential homebuyers need to be cautious and really think about their financial situation. Sure, it’s tempting to buy that dream house, but you don’t want to end up living in a cardboard box under a bridge because you couldn’t afford your mortgage.
And let’s not forget about black swan events. What’s a black swan event, you ask? It’s an unpredictable event that has a huge impact on the economy. Think a global pandemic, a war with Russia, or Justin Bieber announcing he’s running for president. Who knows what could happen?
Unlock your Potential in the Housing Market
All joking aside, the housing market is no laughing matter. It’s a complex system with a lot of moving parts. So, if you’re thinking about buying a house, do your research in the housing market, and crunch the numbers, Mortgage Number is the perfect tool to Co-Pilot this endeavor, so don’t be afraid to ask for help. https://mortgagenumber.com. And if all else fails, just remember: You can try and time the market, renting isn’t so bad. At least you don’t have to mow the lawn.
Capital Gains
The US economy is driven by consumer spending, and housing plays a vital role in capital gains. Currently, the capital gains threshold for real estate is $250,000 for a single household and $500,000 for a married household. These numbers have remained the same for the past 30 years. Doubling them to $500,000 for single households and $1,000,000 for married couples would have a significant impact on our economy.
By increasing these thresholds, we would see a surge in the completion of housing projects. This results in more inventory and a flow of money that our economy thrives on. More people would be incentivized to sell their homes! This led to an increase in real estate transactions and subsequently, an increase in consumer spending. The additional capital gains would kick in after the new thresholds would generate additional revenue for the government. This could be invested in public infrastructure and other initiatives.
Stimulating the real estate market is crucial for the overall growth of our economy. As consumer spending is 70% of the US economy. Housing is the threshold to all spending, a boost in this sector would have a ripple effect on the economy as a whole. It would lead to increased employment opportunities, generate more revenue for businesses, and ultimately, result in an increase in consumer spending, can you say more tax revenue?
In conclusion, doubling the capital gains threshold for real estate would be a game-changer for the US economy. By doing so, we can jumpstart the real estate market. Generating more revenue for the government, and creating a positive economic impact that would be felt for years to come.
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