A mom, dad, and their daughter standing outside with their arms around each other and looking at their new home.

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Mortgage rates have been remarkably low since the summer, and for that reason alone, many prospective buyers have clamored to purchase homes. They’re being tripped up, however, by soaring prices.

Home prices increased 5.9% nationally in August 2020, according to the CoreLogic Home Price Index, compared to a year prior. We have limited inventory to thank for that. The supply of available homes in August decreased by 17% from the previous year, leading to an uptick in demand and creating a housing market loaded with bidding wars as eager buyers compete to win contracts on the limited inventory.

The result? Many buyers are struggling to find homes, so they may not get to take advantage of the phenomenally low mortgage rates.

Is it worth it to buy a home today?

Locking in a mortgage at a low rate could result in a world of savings — but that assumes you don’t grossly overpay for a home. While home prices climbed 5.9% in August on average, in some parts of the country, there’s an even higher level of inflation in play. So what you save on mortgage interest by snagging a low rate, you’ll pay for with a higher purchase price.

That said, depending on your local housing market, there may, in fact, be some deals. If you find a home with a listing price that’s only slightly elevated, it could be worth it to buy.

Imagine you’re looking at paying an extra $5,000 for a home now (compared to what prices looked like last year). That additional $5,000 only adds $21 a month in principal and interest on your mortgage payment if you snag a 30-year fixed loan at 3%. And given that the 30-year mortgage has been trending even lower than that, it could be

When house hunting, the price of homeowners insurance probably isn’t top of mind. But homes with hidden risks can make getting coverage difficult, expensive or both. Learning how to identify them could save a homeowner a bundle.

This could be a particularly important concern for first-time homebuyers and those moving from cities to suburban or rural areas who may not be aware of common hazards, says Jennifer Naughton, risk consulting officer for North America for Chubb, an insurance company.

Three out of 10 city dwellers told a Chubb survey in early August that they were considering moving out of the city because of the novel coronavirus outbreak. Meanwhile, the number of first-time homebuyers in the first half of 2020 rose 4% compared to a year earlier as lower interest rates made mortgages more affordable, according to Genworth Mortgage Insurance.

A homeowners insurance premium can depend in part on distance to the nearest fire hydrant and fire station, Naughton says. Homes that are on narrow roads or otherwise difficult for fire trucks to access also could be more expensive to insure.

Three out of 10 city dwellers told a Chubb survey that they were considering moving out of the city because of the coronavirus outbreak.

“If they have to cross over a bridge, it’s not only a consideration of can a car go over that bridge, but also can a fire engine,” she says.

Some homes are at such high risk of wildfires and severe weather — hurricanes, tornadoes, windstorms and hail —that private companies won’t insure them. Without insurance, buyers can’t get a mortgage, so they need to turn to state-run risk pools such as Beach and Windstorm Plans or Fair Access to Insurance Requirements Plans, better known as FAIR. These policies typically cost more and cover less than regular

(Bloomberg) —

Saudi Arabia added new incentives to keep its mortgage boom going by scrapping a 15% value-added tax on property sales and offering other relief for home buyers amid a push by the Arab world’s largest economy to expand residential ownership.

Property transactions will instead be subject to a new 5% real estate sales tax, according to state-run news agency SPA. The government will also shoulder the cost of taxes for first-time home buyers of properties worth up to 1 million riyals ($267,000), according to a royal order published on Friday.

The threshold for the tax exemption was increased from 850,000 riyals previously for citizens buying their first homes.

chart, bar chart: Mortgage Boost

© Bloomberg
Mortgage Boost

Saudi Arabia’s mortgage market has emerged as a bright spot at a time the economy is reeling from the global pandemic and lower oil prices, with citizen unemployment hitting its highest level on record in the second quarter. But the kingdom has still had to resort to austerity measures to stabilize public finances, including a tripling of VAT — which was introduced for the first time in 2018 — to 15% in July.


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“They’ve essentially revoked the tax increase on property purchases and that’s going to help maintain the momentum in the mortgage market,” CI Capital senior analyst Sara Boutros said by phone. “The bulk of the home-demand by Saudi middle-class buyers is within the 1 million-riyals range, which means those purchases will be tax-free.”

The world’s biggest oil exporter has taken a number of steps to boost home construction and lending. Home ownership among citizens reached 62% in March, according to the country’s housing minister, and the kingdom is now targeting a rate of 70% by 2030, as part of Crown Prince Mohammed bin Salman’s economic transformation plan.

The increase in mortgages has

Gold mining exchange-traded funds (ETFs) continued their recent move higher from chart support Tuesday after Wells Fargo made bullish remarks about the yellow metal. The bank’s head of real asset strategy John LaForge told investors that gold prices remain backed by favorable fundamentals, such as accommodative monetary policy and a softer U.S. dollar. 

“The fundamental backdrop looks good. Interest rates remain low, money supplies excessive (quantitative easing), and we are doubtful that the U.S. dollar’s September rally has long legs,” LaForge wrote, per precious metals site Kitco.

Key Takeaways

  • Gold prices remain supported by favorable fundamentals, such as accommodative monetary policy and a softer U.S. dollar.
  • The Direxion Daily Gold Miners Index Bull 2X Shares (NUGT) found buying interest near the May swing high.
  • Traders re-entered the Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG) after its price stabilized in a zone of support between $110 and $117.

The analyst said that the commodity’s retracement over the past two months was to be expected in light of its impressive run between January and early August. “Only five times since 1980 has gold seen 37%+ rallies in such a short amount of time. These types of rallies are hard to hold onto, and gold was due to cool off some,” LaForge noted.

Below, we review two of the largest leveraged gold mining ETFs and use technical analysis to identify actionable trading levels.

Direxion Daily Gold Miners Index Bull 2X Shares (NUGT)

Created a decade ago, the Direxion Daily Gold Miners Index Bull 2X Shares aims to return twice the daily performance of the NYSE Arca Gold Miners Index – a market-cap-weighted benchmark comprising global gold and silver mining companies. The fund, which is designed for short-term tactical trading, turns over 3.5 million shares per day on an average 0.06%