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Real Estate Big Data

What your occupation says about your divorce probability

(BIG DATA) Recently, a statistician decided to crunch and compile numbers to see where exactly which profession and income fell along the divorce rate curve.

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first time home buyer young couple renting divorce

The divorce rate in this country is absurd. While it is a widely disputed topic, most people quote the rate at somewhere around 40-50%. Whoa.

Recently, one study dove into if there was any correlation between occupation and divorce rate and it was equally predictable and fascinating.

Before the study began, there was a note made that different groups of people have different divorce rates. Generally speaking, the unemployed have a higher rate than the employed, Asians tend to have a lower rate than other races, and education level tends to play a pretty big part in divorce rates as well.

The study, though, focused on specific occupation and not general background data. Statistician Nathan Yau took data from the Census Bureau’s 5-Year American Community Survey from 2015 to do the calculations.

As it turns out, actuaries have the lowest rates. At 17%, it seems pretty fitting seeing as actuaries are the assessors of risk and uncertainty so it makes sense that would apply that assessment to their life and future spouse.

Actuaries were followed by miscellaneous scientists, engineers and architects, technology workers and other medical professionals. Those all were located near the 20% rate.

The Median Divorce Rate quoted on this study was at 36% ish and hovering around there were service industry workers, nurses, construction workers and a handful of other blue collar workers.

Just higher than median at roughly 37% were those who were in sales — I’m lookin’ at you travel agents, real estate brokers, and car salesmen.

At the high side were people who, I’m going to take a guess, are either thanked too much or not enough. At the top of the chart we found people like entertainers, athletes and celebrities (those thanked too much) as well as personal care workers, millwrights and telemarketers (those not thanked enough).

At the very tippy top of the list were flight attendants at 51%, bartenders at 52%, and gaming managers at 53%.

Upon seeing trends in occupation, a correlation was drawn to income and divorce as well.

It was concluded that people with higher salaried occupations tend to have a lower divorce rate — ie physicians/surgeons (~$160k, 21%), podiatrists (~$100k, 22%), and actuaries (~$98k, 17%) — while occupations with lower incomes had higher rates — ie flight attendants (~$40k, 51%), bartenders (~$19k, 52%), and gaming managers (~$41k, 53%).

It is worth mentioning that correlation is not causation (my high school economics teacher would be so proud) and that divorce rates are not an absolute science. I’m sure there are physicians on their fifth spouse and bartenders well into a decade of marriage.

As a child of divorce I have a morbid interest in studies like this and in the interest of not being a statistic myself (a kid from a divorce that gets divorced) I have one very important question: Anyone know where to meet an actuary?

Kiri Isaac is the Web Producer at The American Genius and studied communications at Texas A&M. She is fluent in sarcasm and movie quotes and her love language is tacos.

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Real Estate Big Data

Housing prices rise, outpacing wage increases

(REAL ESTATE NEWS) A new joint report from NAR and realtor.com reveal that affordability conditions are eroding and there are very few cures to this problem.

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housing sales

Good ol’ economics – housing demand continues to outpace supply, and bidding wars are now common in many cities. On a national scale, affordability is increasingly threatening many peoples’ ability to buy, based on their income.

The realtor.com and National Association of Realtors joint report, the Realtors Affordability Distribution Curve and Score, examines affordability conditions compared to income levels for active inventory in local markets. Higher scores suggest a particular market has more affordable homes in proportion to local income levels.

It’s no surprise that in March, the report indicates the least affordable (in proportion to income) is Hawaii, California, Oregon, the District of Columbia, Montana, and Rhode Island. In these states, households at the median income level can only afford 19 to 23 percent of the active housing inventory.

In contrast, the most affordable states are Ohio, Indiana, Kansas, Iowa, and West Virginia, where a a typical household can afford 54 to 62 percent of all active inventory.

The report also indicates that more local markets are seeing worse affordability conditions compared to last year, with L.A., San Diego, San Jose, Ventura, and San Francisco leading the pack. In these markets, the typical household can only afford 3.0 to 11 percent of homes available for sale in their markets.

The typical household can afford nearly 75 percent of homes for sale in Dayton, OH, Toledo, OH, and Scranton, PA.

NAR’s Chief Economist, Dr. Lawrence Yun stated, “The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers – especially those at the lower end of the market, where demand is the strongest.”

The report makes even more apparent why first-time buyers “struggle finding affordable properties to buy and are making up less than a third of home sales so far this year,” said Dr. Yun.

Although wages are on the rise, housing prices are outpacing these increases, and Dr. Yun points to the solution being “more homeowners selling, investors releasing their portfolio of single-family homes back onto the market and more single-family housing construction.”

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NAR Reports

Home sales on the rise – don’t call it a comeback (okay, do)

(REAL ESTATE) Inventory levels continue to fall as prices rise, making for a competitive market. After a tough winter, February saw considerable gains in home sales.

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housing sales

For years, inventory levels have been sinking, and prices have been growing, making the home buying process increasingly complex and sometimes discouraging. But after two consecutive months of declining sales, existing-home sales made a comeback in February, rising 3.0 percent, according to the National Association of Realtors (NAR). Sales are now 1.1 percent higher than February of last year. #GoodNews

Although home sales in the Midwest and Northeast saw a dip in this period, the South and West regions skyrocketed, boosting the national numbers.

Dr. Lawrence Yun, NAR’s Chief Economist noted that “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”

Added Yun, “The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”

Click to enlarge.

In February, the median home price rose to $241,700, a 5.9 percent increase from February 2017, and the 72nd straight month of annual gains. The average days on market fell to 37, down from 41 in January, and 45 last February. That’s what we call a competitive market.

NAR President Elizabeth Mendenhall comments on the difficulty first-time buyers are seeing in this competitive market. “Realtors® in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year. Prospective buyers should start conversations with a Realtor® now on what they want in a new home. Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes.”

Regional performance varied, with sales in the West outperforming all other regions. While sales fell in the Northeast by 12.3 percent, and dropped 2.4 percent in the Midwest, they skyrocketed 11.4 percent in the West, and 6.6 percent in the South.

february existing home sales

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Economics

Why it’s about to get more expensive to get a mortgage

(FINANCE) Borrowing money is getting more expensive, especially for those looking to get a mortgage. But why?

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bonds and mortgages

Although there have been some blips, bonds have grown substantially in value since the 1980s. They’ve performed extremely well for a number of reasons, not least of which is the big slowdown in inflation over that time period.

The result, for investors, has been that anything “bond-lik,e” i.e. capable of paying a regular income – like a high-dividend stock or even a property like your home – has shot up in value. A reversal of bond prices would mean less support for such investments.

That’s what the economy is currently experiencing. According to Financial Times, American worker wage growth is hastening the sell-off of bonds by the US government, which is decreasing the overall price of bonds. As bond prices go down, the interest rates that they offer new investors go up. That rate jumped to 2.85 percent last Friday, the highest level since 2014.

Since the rates at which banks lend their money are largely based on the interest rates offered by bonds, regular folks looking to take out a mortgage or a loan are facing higher costs.

How does this work?

If we’re talkin’ bond prices, we’re talkin’ yield. When the price of a bond goes up, the yield of that bond goes down! Let’s say you’re getting paid $5 each year. If you pay $50 for that right, then you’re making a 10% “yield” (5/50 = 10%). But if you pay $100 for that right, then you’re making a 5% “yield” (5/100 = 5%).

It’s the same thing with the price of a bond because the amount a bond investor gets paid (usually) is fixed. And so, when the bond goes up in value, the “yield” goes down – and vice versa.

For realtors, its important to help clients shop for the best rates to improve their confidence in this market. Leveraging the right online and local financing resources can help potential buyers get the best deal. Explaining broader market context is also critical. Historically, a three percent interest rate is still very low.

According to Investopedia, mortgage rates averaged 7.81% in 1996 and 10.19% in 1986. Instilling confidence with information will put buyers and sellers in the right place to make moves.

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