2021 Contribution Limits, Appreciation Strong

The IRS increased contribution limits for SEP IRA & Solo 401K contributors by $1,000. They did not increase the limit for traditional and Roth IRA’s and slightly increased the HSA contribution limit. All of these accounts enjoy tax advantaged growth.

IRS 2021 Retirement Contribution Limits

Rates – experienced nominal fluctuation this week. The 10 Year US Treasury note continues its upward trajectory. Rates are down approximately 1% from this time last year.

Jobs – the number of people filing for unemployment for the first time decreased marginally this week but remains near 4 times pre-covid levels. The number of people filing for claims on a continuing basis decreased by 0.7M to 7.6M but the number of people filing for Pandemic Emergency Unemployment compensation increased by 0.5M (this is accessible after unemployment assistance runs out).

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Home Values – nationwide increased 5.7% between Aug 2019 and Aug 2020. This increased over 1% from the previous month’s reading and means if you purchased a home in Aug. 2019 for $400,000 it would be worth over $422,800.

GDP – after dropping 31% in Q2, Q3’s initial GDP look shows an increase of 33%. As a reminder, when you fall by 31%, an imporovement of equal amount does not negate the loss as it is percent increase from a reduced value. To get back to the previous GDP levels we would need to see a 46% gain to recoup the 31% loss.

Forbearance 5.90% of mortgage loans are now in forbearance, a nominal decrease from last week.

Mortgage Applications – are up 1.7% from last week. On a year over year basis purchases are up 24% and refinances are up 80%.

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