Wednesday, April 03, 2019 / by June Quilantang
Time and again, the truth is often compromised for the sake of selling. Overextending headlines are one of the most common examples of this. People are smarter and there are less and less who will fall victim to false claims. Nevertheless, here are two recent headlines that are deviated from facts that you should know about.
Actual Headline #1: Cash-out refis are back - will homes become ATMs again?
The real story: The headline is accurate - to a point. It is true that the percentage of refinances in which the homeowner received cash at the closing has increased to levels that existed in 2006. However, the actual amount of equity homeowners "cashed-out" compared to a decade ago isn’t close. The dollar amount cashed-out last year was $63 billion.
That seems like a really large number until we compare it to 2006, when homeowners cashed-out $321 billion. That is more than five times the current amount. In 2006, people did use their homes as ATMs. They purchased new cars, boats, and lavish vacations.
Today, the cashed-out equity is being used to consolidate debt, as seed capital for a new business, or to help a child with their college tuition.
Actual Headline #2: Consumer Debt hits $4 Trillion. Americans are diving deeper and deeper into debt.
The real story:The first sentence of the headline is accurate. The second sentence couldn't be further from the truth. Total consumer debt is the highest it has ever been. That's because the population continues to grow, and so does the economy (prices and wages).
The important number is how that total debt ranks as a percentage of disposable personal income. That percentage is the lowest ever recorded!! People are not "diving deeper and deeper into debt". The exact opposite is true. They have less debt now than ever before.
If you are thinking about buying or selling a home, it is important that you have a true professional handling your real estate needs. Someone who knows the truth about the current economy and its potential impact on the housing market.
Reblogged from: http://bit.ly/2VivaEp