So the stock market is breaking new highs. One would think that the result should be happier home life as family portfolios start to bulge faster than Chris Christie’s waist line, but the fact of the matter is that recent U. S. Census Bureau data shows that the divorce rate in the United States is skyrocketing. This revelation means one thing, instead of allowing money to assuage all wounds, couples are taking the opportunity to cash out when the going is good. And, because there’s money in the coffers, there is money for the spouse who is leaving the marital residence to purchase a new house.
In a recent article written by Cassandra Guerrier for “MSN Living” entitled “Divorce rate rises as economy gets better. The author states that according to findings from the National Center for Family Research marriage rates are decreasing while divorce rates are increasing. She goes on to say that there is a major silver lining in that “the Census Bureau has found a correlation between the rise of divorce rates and the sudden boost in the economy-particularly with regard to housing.” The Bureau concluded that “the immediate need for separate housing arrangements generates finance that benefit the overall economy.” From a practical standpoint, I would say that this proposition could be correct.
Recently, I have found that about 75% of my divorced clients end up purchasing new homes. Prior to the Bull Market, I would say about 40%-50% would buy new; however, with the increase in the stock market and stabilization of relatively low interest rates, the opportunity for new purchases for divorces have never been better.
Although the Census may attribute the rise in economy to more divorces, I would also argue the it is the bull economy that has driven up divorces. Quite simply, spouses are getting out when the going is good. Relatively speaking, I am sure that Pennsylvania equitable distribution awards are at all time highs. Family saving and brokerage accounts are probably double of what they were just 5 years ago. In this economy, divorcing spouses are taking the money and running, instead of taking the risk that the stock market will fall as they try to reconcile.