The Two Things You Should NOT Purchase Right Now, Ep #47

<p>What two things should you avoid purchasing in the near future? Why should you wait? In this episode of Retirement Made Easy, I talk about real estate, annuities, and CDs. Why do they all make poor purchases right now? Listen to this episode to learn more!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[2:58] Thing #1: Avoid buying real estate</li> <li>[4:48] Why home prices have skyrocketed</li> <li>[8:09] Thing #2: Avoid purchasing CDs and Annuities</li> <li>[11:48] Annuities: the good, the bad, and the ugly</li> </ul> <h2>Thing #1: Avoid buying real estate</h2> <p>There is a real shortage of supply of housing. The competition is so ridiculous that it’s driving the prices of homes up 10–30% more than the asking price. People are even paying 10–30% more than what homes are appraising for. It’s a bad idea to pay 10–30% more than the house is <em>worth</em>. Lenders are pointing out that people are going to regret making these large purchases as the inventory of homes rises in the next 12–24 months. Home prices will start to level out again.</p> <h2>Why are real estate prices skyrocketing?</h2> <p>What can the current real estate market be attributed to? </p> <p><em>The supply shortage</em>. Lumber manufacturers were shut down for months because of COVID, the cost of lumber skyrocketed, and building a new home became ridiculously expensive. This places all of the demand on the used home market, and the supply just can’t keep up with the demand. Not only that, but some people aren’t putting their homes up for sale because they’re worried they’ll have nowhere to go when it sells. </p> <p>The other factor is that interest rates are low. Many people are getting approved for a home loan they wouldn’t otherwise be approved for. You’re better off waiting so you don’t have to pay 30% than the appraised price on a home. It doesn’t financially make any sense. Wait until the inventory of homes increases and the price of lumber decreases. The Fed plans to keep interest rates low for th