Rocket Fuel Newsletter – 02/05/22
What would you do with Ten Trillion Dollars?
That’s how much equity is in the U.S. housing market waiting to be tapped.
This week has Wordle, the Metaverse and a whole lotta homeowner equity.
Fuel Up! 🚀
Biz Buzz
- The New York Times Buys Wordle – Rocket Fuel Launches Pro Puzzles
Stewards of the classic crossword, the New York Times does not want to be left behind the times, so they are staying fresh and buying up the competition (right out of the Facebook playbook).
See if you can name the five-letter word at the bottom of today’s Rocket Fuel using the clues in each section, Wordle style.
- #TankForTua
As the NFL, Dolphins, Broncos and Giants are being sued by Coach Brian Flores for alleged racism embedded in hiring practices, more light is being shed on teams giving up games to get draft picks.
This is a good reminder that people respond to incentives and that every system is perfectly designed to get the results it gets.
- Time Is Tik-ing In The METAverse – SNAP Snaps Back
Last fall, prior to the Meta rebrand, Facebook was worth $1 trillion.
It’s been reduced to $600 billion in a few short months, dropping 20%+ this week.
Why?
TikTok.
Short-form, low-production video is the new social media.
It’s to the point. It’s authentic. And people are addicted to it.
Are you using TikTok in your business? Send us your clips!
Need ideas? Check out this realtor in Baltimore who jumped on the bandwagon.
Speaking of “the metaverse,” TerraZero Technologies just closed the first metaverse mortgage in Decentraland.
Caffeinated Trends With Ryan Schoen, Senior Analyst – Rocket Mortgage®
The U.S. housing market hit $36.8 trillion in the third quarter.
Notice how much faster equity (green at $25.3T) has grown relative to mortgage debt (yellow at $11.5T).
The ~$5T of homeowner equity created since the pandemic is equal to the total annual output of the world’s third largest economy – Japan.
Not all $5T can be converted to cash.
Once we back out the portion of equity above 80% combined loan-to-value (the standard maximum borrowing limit for conforming first lien cash-out mortgages), the true “pie” is somewhere around $9.85T.
That’s a 2.6 trillion dollar jump in cash to take out!
Yet with all this equity out there, American consumers have more credit card debt than in 2019.
Rates may have gone up, but the spread between a mortgage and a credit card is still over 10 points!
Debt consolidation is a no-brainer.
Just as Rick from Sage Mortgage pointed out last week, refi is not dead.
- Pro Performance – Debt Consolidation Training
- 20 BPS Credit – Cash-Out Special
- Capital Markets Zone
In-The-Weeds Reads
On The Road Again
Fawaz and Austin hung out with Lynn Meng and the team at Morgan Real Estate & Financial in San Jose this week celebrating their success in 2021.
The Market
Market Movers
Jobs Friday:
This week’s non-farm payroll report beat expectations with the previous reports being revised upward
This signals to the market that the Fed will have no trouble justifying more rate hikes as strong job growth and labor force participation support the move higher in rates with inflation as the higher risk.
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The answer is:
