Why is it called “wasting”? Because after you pay rent….that money is gone. No equity, no tax benefits, nothing. While home prices have increased for 72 straight months of year-over-year gains (according to the National Association of Realtor’s Existing Home Sales Report), millennials that pay rent have missed out on that appreciation.
According to a new study by Rent Cafe, the average millennial spends nearly $100,000 on rent by the time they turn 30 which is around 45% of their income.
Other key findings in their report:
– Millennials pay a whopping $92,600 in total rent by the time they turn 30. Although they earn more compared to previous generations, they also have to spend more on rent.
Millennials paid much more in rent than what their Baby Boomer parents paid by the time they hit the same age. It seems that Millennials do put a massive amount of money into renting, but the numbers also show that their total median income is the highest among generations, earning about $206,600 in 8 years.
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.00 MBS) gained +22 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move basically move sideways for the week, in some cases you may have seen a very slight improvement.
Overview: We had a holiday-shortened week with the bond market closing early on Thursday and closed for Good Friday. MBS reached their best levels of the week on Thursday as traders rushed to park their money in the safety of bonds over the long holiday weekend which caused a temporary increase in demand. For the week, there was actually some very strong economic reports (GDP 2.9%, very high Consumer Confidence and Consumer Sentiment readings and an uptick in the Fed’s key inflationary reading) but this was offset with uncertainty and concern over a looming trade with China as well other key trading partners.
Inflation Nation: The Fed’s key measure of inflation inched up as the Headline PCE YOY reading hit 1.8% vs est of 1.7%. The Core YOY number inched up from 1.5% to 1.6% which was expected. Both readings are still below their target rate of 2.00% but starting to trend upward. Personal Income saw another monthly gain, this time 0.4% which was expected. Personal Spending gained 0.2% vs est of 0.2%.
Manufacturing: The bell-weather Chicago PMI was much lower than expected (57.4 vs est of 62.0) and is one of the lowest readings in the last 12 months. However, ANY reading above 50.0 is expansionary and reading in the upper 50’s is very, very strong.
Consumer Sentiment: The University of Michigan’s Survey was revised from the mid-month prelim reading of 102.00 to the final monthly reading of 101.4 which is the highest level since 2004.
Consumer Confidence: The March reading continues a trend of very high levels. It was just off its record setting pace in February (127.7 vs 103.8)
Gross Domestic Product: We got our 3rd look at the 4th QTR GDP and its second and final revision. It was revised upward to 2.9% from 2.5%. The market was expecting something in the 2.6% to 2.7% range, so this was stronger than expected. PCE QoQ remained at 1.9%.
What to Watch Out For This Week: