Proprietary Data Insights
Top Financial Pro Real Estate ETF Searches This Month
These Super Lucky Homeowners Are In The Best, Most Enviable Possible Positions
In Monday’s Juice, our Trackstar top five looked at the top searched real estate ETFs among retail investors. Today, we filtered the same search down to financial professionals.
The big difference—there’s relatively robust interest in these ETFs from the retail side, but virtually none among the pros. As we continue our October housing is haunted series, we’ll consider why. Starting tomorrow, when we look at the actual stocks that comprise the most popular real estate ETF portfolios. Could it be that financial advisors and such simply don’t want anything to do with housing given the present current environment?
Yesterday, we covered the bad news. The crisis side of this housing market:
As of the third week of September, the median sale price of a home in the United States was $372,500. That’s actually up 3.1% year over year.
With the interest rate on a 30-year mortgage hovering around 7.5% lately and a 10% down payment ($37,250), the monthly payment on the typical home comes to $2,344. That’s 8.6% higher than our January 2023 calculation. Both numbers are before factoring in the additional expenses.
Add in those additional expenses and the monthly payment at the median in America comes in a few bucks under $3,000.
Today, we look at the biggest silver linings. And they’re actually pretty big bright spots given their magnitude.
No doubt—if you’re walking into this housing market as a first-time buyer or an existing homeowner in an unfavorable spot, you’re pretty much screwed one way or the other. However, if you’re one of the millions of people in solid housing situations, things have never been better. There’s a good chance you have free cash flow coming in, more cash in your pocket or, at the very least, myriad attractive options.
If we stop right there, we have a silver lining.
A low rate likely means a relatively lower monthly payment than what you’d face if you bought today.
No mortgage likely means one of two things: The cash you earn that normally would have gone towards housing stays in your pocket or gets spent elsewhere or you can make the choice to work/earn less and not feel as much financial stress. Of course, other possibilities exist—such as baby boomers using this excess cash to help out their kids—but we think it’s safe to say quite a few are sitting pretty.
But let’s not stop right there. Let’s consider some other data to put together closely-related silver lining number two—
So, you see what’s happening here. The numbers are clear.
But the real silver lining is that these boomers—thanks to the massive price appreciation they have experienced, particularly in the nation’s traditionally hottest markets—can sell their existing home, pay cash for a downsized property and still have money left over to save, spend or, yeah, help their kids.
Among the older folks who sold and moved, younger boomers (58-to-67) moved the furthest away (a median of 90 miles), older boomers (68-to-76) at 60 miles and the older silent generation at 50 miles.
Silver linings. Absolutely. But only if you’re lucky enough to have been born and to have become a homeowner at the right time. The days of striving to duplicate the success of the generations that came before you could very well be gone.
At least on housing. As with so much that has to do with money, it all depends on your experience and place in life. One person’s silver lining is another’s dark cloud on the horizon.
The Bottom Line: From this perspective, housing feels a lot like the rest of our economy. That’s the story we’ve been telling of the haves and have nots, on everything from saving to spending to managing debt.
That said, there’s almost always a silver lining for investors. Because when you invest there’s almost always an opportunity somewhere. In tomorrow’s Juice, we look at inside real estate ETFs to kick off a discussion on whether or not you should consider investing in the sector, as we continue our housing is haunted series.
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