Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.
The numbers: Mortgage applications increased 25.5% in the week ending Oct. 2 from the prior week, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey released Oct. 7. Purchase applications rose 27% and refinance applications rose 24% from the previous week.
What counts: This was a huge jump in mortgage applications. Two factors to note:
- Rates: Mortgage rates fell to below 4% – their lowest level since last spring, according to the report. Rates had risen for several weeks on expectations the Federal Reserve would start raising rates in September. Mixed economic signs lately mean the outlook for a Fed rate hike is somewhat unclear. So homeowners considering refinancing may still have time to take advantage of relatively low rates. Potential homebuyers may be able to relax and not feel they need to rush to get a mortgage before rates start climbing.
- New disclosures: The Mortgage Bankers Association pointed out that the jump in mortgage applications was due in part to a rush to submit applications prior to mortgage disclosures changes that took effect Oct. 3. As we’ve written about recently on our blog, these improved disclosures may cause some delays in loan applications in the early going as lenders, real estate agents, and consumers become familiar with the new forms and the procedures for processing the forms. The new disclosures make it easier for consumers to compare mortgage loan offers from various lenders and provide clearer details around all the costs of a mortgage.
Planning for an active retirement involves many factors, but did you ever think it might be worth setting aside a small budget to actually help your planning?
According to a recent study on retirement planning from AARP, more than 70% of workers say they plan to work in retirement. Of those, 29% say they will work part-time for enjoyment, 13% plan to start their own businesses, and 23% say they will continue to work for the income. Given the likelihood that you may someday fall into one of those groups, it’s a good idea to plan ahead for how you will approach this phase of your life. And that planning may require some funds — an “exploration budget.”
Give yourself time
You may need to dream, ask questions, and think about how you would like to structure your retirement career. Your first step may be to consult with a financial advisor who can help you to understand if there are any gaps in your retirement safety net that your second career might need to fill. Many future retirees have neglected to plan for the high costs of health care, for example, so one requirement for your future career plan might be affordable coverage. Even a few years of additional coverage can help.
You can also use this time to pull back from work, which your exploration budget may allow. You may consider asking about reduced schedules or fewer responsibilities so you have the bandwidth to search for inspiration without the distraction of a high-pressure career.
Don’t neglect research and education
During this period, you may explore ideas that excite you. Try working as a volunteer or pursue part-time internships in organizations or fields of interest. Take courses that may help prepare you for the new role. It’s easy enough to take courses at local schools or colleges, or you can take them online — even at some of the most prestigious universities in the country. You may join relevant professional organizations and start networking so you have a group you can turn to for advice or introductions later. If your future plans require buying equipment or inventory, you may want to start now.
Most of these steps require funds, and you don’t want to be drawing down your crucial retirement accounts for current living expenses or research. It’s better to have funds set aside and earmarked for this specific purpose. Your exploration budget may help you spend what you need to without feeling guilty or risking your future.
Test your residency plans
Travel expenses may also be part of your budget. Oftentimes people consider moving to a new location when they retire. Make sure your choice is compatible with your future career plans. For example, many retirement communities or “over 55” condos have rules prohibiting home-based businesses. You may not run afoul of the rules if you are simply writing a blog, but if you have customers or clients coming to your home, you very well may have a problem.
While you’re considering a certain geographic area, consider whether it has the infrastructure and the demographics you need to make your new business a success. Whatever your dream is, be sure the area has ample opportunities to support your plan.
You may find it jarring to go from your current “full-steam ahead” job into an entirely different line of work. Start small with part-time jobs or consulting roles for a few months or even years to ease the transition. Recent research from Kelly Services reports that nearly 30% of U.S. workers are “free agents” — consultants, moonlighters, or deliberate part-timers — and nearly 49% of the working baby boomer generation describe themselves this way.
The financial cushion from your exploration budget may help you be creative and focus on transitioning to your new role without being distracted by financial concerns.
Everybody deserves a retirement that keeps them happy, active, and fulfilled; but it takes planning — and perhaps some dedicated funds — to support it. As Nancy Collamer, author of “Second-Act Careers,” says, “The notion of a strictly leisure-focused retirement is outdated. With more people living past 90, you can enjoy a whole ‘bonus’ life after you retire.”