Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by John Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Thank you for having me Brandy.
Brandy Auterson-Hurst:
So we have talked a lot about higher mortgage rates and their impact on housing. What else have these higher rates impacted?
John Nelson:
Yeah, we’ve certainly seen a lot of slowing down in terms of activity in the mortgage arena, going from 3% mortgages to seven, seven and a half percent. And what I’ve got with me today is a chart that illustrates some differences that we’ve seen. This chart is showing mortgage-free homes here in the United States, and we’ve seen quite an increase over the last 10 years in a little over 5%. So we’re nearing almost 40% of all homes now being mortgage free just from that standpoint and we’ve seen it firsthand, cash buyers and those who are just not interested in the seven, seven and half percent rates that we’re kind of seeing at this point.
Brandy Auterson-Hurst:
Yeah. So what do you think this means for the economy in general?
John Nelson:
Yeah, so I think it’s mixed. Whenever looking at any of this type of economic data, the good news is for those who don’t have a mortgage and don’t have that interest payment, that frees up money that could be spent in other areas in the economy. So that’s certainly a benefit. Though we are looking at a lot of those mortgage free homes being older individuals. So that’s a dynamic that we’re looking at very closely like many economists, where home builders, consumer discretion type areas within the economy, do they continue to perform well or do we see broader slowdowns in many areas just due to this dynamic?
Brandy Auterson-Hurst:
All right, John. As always, thanks for joining us.
John Nelson:
Thank you, Brandy. Happy to be here.
Brandy Auterson-Hurst:
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