As February ~ the month of love~ comes to a close, the AARC wants you to know that we lovehaving you at the heartof our organization. Whether you’re a current or future member, annual conference attendee, or just plain friend, you are vital to our success.
Mark your calendars for our upcoming webinar on March 27. Margaret Wylde, CEO of ProMatura Group, LLC, will present “Attributes of Places the 55+ Would Love to Live.” The webinar will identify the most important tangible and intangible attributes most likely to attract people to move to your community. Sign Up Here Today!
In the next few weeks, we’ll spring forward and celebrate the first day of Spring. The flowers and trees have begun to bloom and just like tending the garden, we want you to help us continue to grow!
Again, thank you for choosing the AARC as part of your business!
Rachel Baker Chair, The AARC
Americans Continue To Flee To Low-Tax States
Ryan McMaken, The Mises Institute/ZeroHedge.com | February 14, 2019
According to the most recent Census Bureau data on state-to-state migration flows, 523,000 people moved to California from other states. But at the same time, more than 661,000 Californians moved to other states.
That is, on net, nearly 138,000 more people left California than moved into it from elsewhere in the US.
Yet, California isn’t the worst in this regard.
Both Illinois and New York lost even more residents to other states with net losses to other states totaling 144,000 and 167,000, respectively.
These numbers reinforce what has become a well-entrenched trend of US residents moving from high-tax states to low tax states.
In fact, among the top-ten states that the largest number of Americans have fled, seven of the ten are states which rank among the top 15 states for the worst tax burdens – according to the Tax Foundation’s most recent report on state and local taxation. New York is ranked worst in the nation, while California is ranked at number four.
At the other end of the spectrum are states with far more modest tax burdens. Florida, which tops the list with a net 118,000 new residents from other states, is ranked by the Tax Foundation as having the 31st highest tax burden. Arizona, at number two, with 98,000 new residents from other states, is ranked at an even better number 34. Texas is near dead last (in a good way) at number 47. Even Washington State, which gained nearly 62,000 new residents from other states, is ranked in the middle at number 27. (Oregon is an exception, as it is ranked as having the 16th worst tax burden in the nation.)
Some of the states on the losing end have certainly noticed. Last November, the Sacramento Bee reported “More people left California in 2017 than moved here.” The news is nuanced, though. The Bee also noticed that the people moving in to California tended to be more educated and higher-income than the people moving out. That may be good for tax revenue, although it will likely also increase income inequality (which Californian politicians claim to hate) while potentially pushing up housing prices in the more in-demand areas even more.
More recently, New York state officials blamed a budget shortfall on an exodus of taxpayers, and “cited anecdotal reports of New Yorkers leaving the state or changing their primary residence.” Basically, too many New Yorkers are moving to Florida.
So far, we’ve only been looking at migrant flows from state to state, however. If we include in-migration from foreign countries and natural growth from births, California’s comparative population loss disappears, although Illinois and New York still remain in negative territory.
On Tuesday, for example, Jonathan Williams at The Hill opined that “Americans continue their march to low-tax states.”
Using overall population changes from (all sources) from 2017 to 2018, he notes
- Once again, Texas and Florida were the big winners in overall population gains, with the Lone Star State gaining more than 379,000 residents from 2017-18 and the Sunshine State posting a gain of more than 322,000.
- The big net losers from the report were New York, which lost a total of 48,510 residents, and Illinois, which lost 45,116.
Williams doesn’t provide any details or visuals beyond a handful of states, so I’ve done it for you, using the same data Williams uses:
California fares better by these measures, but so do Florida and Texas, both of which also receive large numbers of migrants from abroad.
So, even if we add in foreign migration, low and moderate tax states still tend to rise to the top of list.
There is no doubt that migration from other countries is helping keep population growth positive in a number of high-tax states.
If we exclude natural growth from births, and look at just people who have moved in from elsewhere (including abroad), we find that high-tax states California, Massachusetts, Minnesota, and New Jersey all move from negative territory into positive:
Certainly, taxation is not the the only factor people consider when moving. Climate and proximity to family are common considerations, and it’s likely not a coincidence that most of the states in the top ten are states with large cities and numerous jobs for skilled workers. The cost of living is a big factor as well, and this has been especially problematic for California which contains many of the most notoriously unaffordable cities in America. This helps explain why lower-income residents flee California while wealthier residents move in. Living in California has become a luxury available primarily to wealthy tech workers and government employees with plentiful taxpayer-funded benefits and pensions.
Mortgage Rates Fall to One-Year Low, Setting the Stage for a Sunny Spring Selling Season
Andrea Riquer, Realtor.com | February 21, 2019
Rates for home loans fell to the lowest in over a year as investors remained concerned about economic headwinds, setting up the housing market for a strong spring season.
The 30-year fixed-rate mortgage averaged 4.35% in the February 21 week, mortgage guarantor Freddie Mac said Thursday. That was down from 4.37% in the prior week and the lowest since early February 2018. The popular product has eked out a weekly increase only once in 2019.
The 15-year adjustable-rate mortgage averaged 3.78%, down three basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.88%, down from 3.84%.
Those rates don’t include fees associated with obtaining mortgage loans.
Mortgage rates move in near lockstep with the 10-year U.S. Treasury note although sometimes it takes the mortgage market a few days to catch up to the bond market.
Bond yields, which decline as prices rise, have been caught in “cross-currents,” in the words of Federal Reserve Chairman Jerome Powell. The dragged-out U.S.-China trade talks have helped boost the attractiveness of assets considered safe havens. And more recently, yields have declined as Federal Reserve officials increasingly speak out in favor of moderating the pace of reducing the bonds they hold on their balance sheet.
Still, investors are keeping a watchful eye on the supply of new Treasury bonds hitting the market. The massive deficits created by the 2017 tax cuts and spending increases are being financed by more bond issuance, and excess supply could erode demand—and pricing power.
For now, though, there’s more buying than selling of Treasurys—good news for borrowers. (Here’s a look at how mortgage applications increase as rates decline, from last month.)
Even if mortgage rates behave, there are plenty of headwinds arrayed against would-be home buyers. Debt consolidator Freedom Financial’s Freedom Debt Relief subsidiary recently conducted a survey of consumer attitudes toward debt and the economy.
Survey respondents said that their combined debts—student loans, credit card balances, medical debt, and more—were among the big factors keeping them from buying a house. That was true for 26% of members of Generation X, 36% of Millennials, and 35% of Gen Y-ers, those born from 1995 on.
In a reminder of the economic forces stacked against consumers, survey respondents of all ages said affordable health care was their biggest priority, followed by wage growth. Respondents listed affordable housing third, after those two considerations.