I heard an interesting analogy this week from Eldon Ploetz, an AZ RE instructor and a former bank executive.
If we were to stack $1 bills on top of each other at the rate of 1 per second and worked at it 24 hours per day, it would take us 11.57 days to stack $1 million.
How long would it take to stack a One Billion dollars? 11,574 days or 31.71 YEARS.
How long would it take to stack a Trillion Dollars? 31,710 years.
And,the National Deficit is reported to be 14.5 trillion dollars. That would mean we would need to stack $1 bill, 24 hours per day for 459,795 YEARS. That is a VERY long time. Obviously, our descendants will be dealing with this debt for years.
Friday, August 19, 2011
Tuesday, August 9, 2011
How the S&P Ratings Affect the Housing Market
Per the Wall Street Journal, "When all is said and done, borrower psychology—and not mortgage rates—could face the bulk of any housing-market damage that stems from the Standard & Poor’s rating downgrades.
S&P downgraded the credit ratings of Fannie Mae and Freddie Mac on Monday morning to AA+ from AAA. That, of course, followed Friday’s rating cut for the United States.
The downgrades by themselves don’t appear to have done much to roil mortgage markets. The 10-year Treasury note, to which mortgage rates are closely tied, has fallen to a record low, which is good for mortgage rates."
Lawrence Yun, the chief economist for the National Association of Realtors says, “Even if [mortgage] rates were to rise because of the downgrade, this fact is less important in light of the current overly stringent underwriting standards and the general lack of consumer confidence about the economy. A 30-year fixed rate rising from 4.3% to 4.6% will not change the housing game that much, but a return to normal underwriting standards and a boost to consumer confidence will be the true game changer.”
What does this mean for you? Mortgage rates are Low, Low, Low so a house purchased now will have a low monthly payment. While others are crying over their stock values, take advantage and purchase a home at the lowest historical mortgage rate. Be the new Warren Buffett and buy when terms are favorable. You will have outsmarted most of your neighbors!
S&P downgraded the credit ratings of Fannie Mae and Freddie Mac on Monday morning to AA+ from AAA. That, of course, followed Friday’s rating cut for the United States.
The downgrades by themselves don’t appear to have done much to roil mortgage markets. The 10-year Treasury note, to which mortgage rates are closely tied, has fallen to a record low, which is good for mortgage rates."
Lawrence Yun, the chief economist for the National Association of Realtors says, “Even if [mortgage] rates were to rise because of the downgrade, this fact is less important in light of the current overly stringent underwriting standards and the general lack of consumer confidence about the economy. A 30-year fixed rate rising from 4.3% to 4.6% will not change the housing game that much, but a return to normal underwriting standards and a boost to consumer confidence will be the true game changer.”
What does this mean for you? Mortgage rates are Low, Low, Low so a house purchased now will have a low monthly payment. While others are crying over their stock values, take advantage and purchase a home at the lowest historical mortgage rate. Be the new Warren Buffett and buy when terms are favorable. You will have outsmarted most of your neighbors!
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