Mortgage Market News

After last week's decline, U.S. Stock markets kicked off the new week on a positive note. The recent push lower in the equity markets were touched off by fears of a hike in the Federal Reserve's short-term Fed Funds Rate. The Fed Funds Rate is the rate in which depository institutions lend balances held at the central bank to other depository lenders on an overnight basis. The Dow Jones Industrial Average fell 394 points, or 2.1% on Friday, the worst day since it fell 611 points after the Br exit vote on June 24.
Target announced it will be hiring 70,000 seasonal workers for the upcoming holiday shopping season. That's about the same number that it hired last year. Target will hold the seasonal hiring events at each of its 1,800 stores on October 14 and 15, while candidates can also apply online. Target has forecasted that holiday sales could fall as much as 2% this compared to last season. Like most retailers, Target gets 30% of their annual sales and profits during the holiday shopping season.
National average gas prices edged higher in the latest week after an uptick in oil prices, but still remain near the low end of the range. The national average price for a regular gallon of gasoline rose $0.06 in the latest week to $2.18. That is below the $2.35 average price seen last year at this time. The highest price recorded was $4.11 back on July 17, 2008. With the busy summer driving season now behind us, combined with the changeover to cheaper-to-produce winter blend gasoline, it is likely that mean prices will move lower over the next several months.
Comments

Mortgage Market News

The holiday shortened week kicked off today as summer trading patterns take hold of the market. This week, economic reports are on the light side, but the closely watched June Jobs Report will be released on Friday. It is expected that U.S. employers added 175,000 new workers last month. The report will be scrutinized by both investors here in the States and abroad as well as the Federal Reserve members when considering future monetary policy.
Small business hiring picked up in June, reaching the highest level it's been in a year. The Paychex IHS Small Business Jobs Index increased 0.21% to 100.81 in June from May, which was the best reading this year. A number above 100 indicates growth. The index is now higher by 0.18% year-over-year after flat to negative readings in the 18 months. With small businesses representing nearly 95% of all employers in the U.S., the Paychex | IHS Small Business Jobs Index serves as an indicator of the overall economy, providing a monthly, up-to-date measure of change in small business employment.
Home prices continue to produce solid gains as evidenced by the positive report from CoreLogic, a leading provider of consumer, financial and property information. CoreLogic reported that home prices, including distressed sales, rose 5.9% from May 2015 to May 2016. Home prices also rose 1.3% from April to May. The housing sector will likely remain a bright spot in the economy with rates at historic lows. CoreLogic forecasts that home prices will rise 5.3% year-over-year in May 2017.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Tuesday that mortgage applications to purchase new homes fell 6% from April, but remain 8% higher than last year this time. The MBA said that despite new home purchase applications being down in May, it expects modest growth in housing starts to be reported later this week as the spring building season continues. The MBA's Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country.
After a slowdown in the beginning of the year, the consumer spending was alive and kicking in April and May for the second straight month of gains. Retail Sales rose 0.5% in May, above the 0.3% expected. Sales at clothing stores, online retailers, restaurants and bars all grew solidly. Retail Sales were up 2.5% from a year ago. Retail Sales measure the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation.
The U.S. Stock markets are on the decline today and have closed lower for three straight trading sessions. Concerns of global instability, the Brexit fears and slowing job growth here in the U.S. are some of the key factors causing the recent sell-off. In addition, the monetary policy statement from this week's Federal Open Market Committee meeting is sending jitters through U.S. markets. The closely watched S&P 500 has decreased 2.2% in the past four trading days. Brexit refers to the possibility that Britain will withdraw from the European Union with a vote on the issue coming on June 3.
Comments

Mortgage Market News

Signed contracts to purchase existing homes soared in April from March, as the housing sector continues to field positive news. April Pending Home Sales jumped 5.1% from the previous month hitting the highest level in 10 years. Estimates were calling for a meager 0.6% gain. The index is up 4.6% from April of 2015. "The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets," said Lawrence Yun, the National Association of REALTOR'S® chief economist in a release.
Orders placed for goods lasting more than three years, such as washers and dryers, surged in April, reported the Commerce Department on Thursday. The Durable Goods Orders Index rose 3.4% from March to April, well above the 0.6% rise expected. The big driver in the index was a near 65% increase in civilian-aircraft orders. This increase of 3.4% is up three of the last four months, following a 1.9% March increase.
Mortgage rates edged higher this week, though still remain just above the all-time lows. Last week, the Federal Reserve Bank of the U.S. painted a more hawkish picture for future interest rates, meaning that they could move higher sooner, rather than later. Freddie Mac reported that the 30-year fixed conventional mortgage rate ($417,000 or less) rose.
Comments

Mortgage Market News

U.S. Stock markets are plunging today after weak economic data abroad signals that the global economic slowdown has resurfaced. News from China showed a slowdown in its manufacturing sector, while Australia unexpectedly lowered its benchmark interest rate, signaling that the country may be in worse economic shape than expected. In addition, a downgrade to the euro-zone's inflation and Gross Domestic Product by the European Commission are weighing on global equities.
CoreLogic reports that home prices, including distressed sales, rose 6.7% from March 2015 to March 2016, with a 2.1% gain from February to March. Looking ahead, CoreLogic forecasts a 5.3% rise in prices over the next year. CoreLogic's chief economist, Frank Nothaft said, "Low interest rates and increased home building suggest that housing will continue to be a growth driver."
Government-sponsored-entity Freddie Mac reported a net loss of $354 million in the first quarter of 2016 due to lower interest rates and a $600 million loss from widening credit spreads. A credit spread is the difference in yield between two bonds of similar maturity but different credit quality. It was only the second quarterly loss in the past four years, though the losses have come in the past three quarters. And though the company didn't need a capital infusion from the government, it will not make a dividend payment to the Treasury. Freddie Mac and sister Fannie Mae don't make mortgage loans. They buy them from lenders, then package and sell them into securities and sell them to investors.
Comments

Mortgage Market News

A sharp decline in the West sent New Home Sales lower in March. Across the country, sales in the East were unchanged, while sales rose in the Midwest and the South. The Commerce Department reported that March New Home sales fell 1.5% from February to an annual rate of 511,000, below the 521,000 expected. Sales were up 5.4% from March 2015 to March 2016. The New Home Sales report shows the number of newly constructed homes with a committed sale during the month.
The Federal Open Market Committee (FOMC) meeting will take place this week on Tuesday and will end on Wednesday with the 2:00 p.m. ET release of its monetary policy statement. The Fed members will discuss the U.S. economic landscape as well as the economic woes that continue to plague global economies. The highly anticipated meeting will garner much of the attention this week as global investors look to the Federal Reserve for any clues as to when the central bank may raise rates again. There is a near zero percent chance of an interest rate hike at this week's meeting.
Freddie Mac reported on Friday that housing in 2016 is expected to maintain its momentum throughout the year and it expects housing to be an engine of growth. Freddie Mac said construction activity will pick up as we enter the spring and summer months, and rising home values will bolster consumer confidence and help support renewed confidence in the remaining months of this year. In addition, continued prolonged low mortgage rates will also support both the housing and mortgage markets in 2016.
Comments

Mortgage Market News

U.S. investors withdrew $4.5 billion from U.S.-based Stock funds in the latest week, despite the 1% gain in market value over that time period, reports mutual and hedge fund data company Lipper, Inc. So far in 2016, investors have withdrawn $51 billion with just three weeks this year during which funds attracted more than investors withdrew.
Mortgage delinquency rates continue to improve across the U.S. since the housing bubble burst back in early 2008. Black Knight Financial Services reports that in March, the rate of 30-day delinquencies was the lowest since just before 2000 at 1.95% when Black Knight started compiling the data. In addition, the overall home loan delinquency rate, which tracks loans which are 30 or more days past due but not yet in foreclosure, fell to 4.08% in March, the lowest since March 2007.
The regularly scheduled two-day Federal Open Market Committee meeting will kick-off next week on Tuesday with the monetary policy statement being released on Wednesday at 2:00 p.m. ET. There will be no post-statement news conference by Fed Chair Yellen, nor will there be any forecasts associated with the release. Currently Fed Fund Futures show almost a zero percent chance of a hike at the meeting, while June shows just a 21% chance of a hike. Fed Fund Futures now show a 63% chance of a Fed move by December, up from about 50% forecasted at the end of last week.
Comments

Mortgage Market News

The only economic data point released this morning was the better-than-expected Empire Manufacturing Index rising to 9.6 in April, well above the 2.6 expected and above the 0.6 recorded in March. It was a 15-month high for the index, while the March reading was the first positive reading since last July. The report comes after the March Philadelphia Fed Index on manufacturing came in at 12.4, after the -2.8 reading in February. The manufacturing sector, which has been devastated by the strong dollar and the resulting sharp drop in commodity prices and weak exports, is showing signs of a rebound.
Americans attitudes regarding current economic conditions declined in early April as future job prospects weighed, while wage growth has been dismal. The Consumer Sentiment Index fell to 89.7 from the 91 recorded at the end of March and below the 92.0 expected. It was the fourth consecutive monthly decline. "Consumers reported a slowdown in expected wage gains, weakening inflation-adjusted income expectations, and growing concerns that slowing economic growth would reduce the pace of job creation," said Richard Curtin, the chief economist of the survey.
The Federal Housing Finance Agency (FHFA) announced a plan this week for limited reduction of mortgage principal for certain seriously delinquent, underwater borrowers who are still struggling after the housing collapse, to help them avoid foreclosure and stay in their homes. The rollout will help only about 33,000 people with mortgages held by Freddie Mac and Fannie Mae. The FHFA states that the modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016. In addition, mortgages must have an outstanding unpaid principal balance of $250,000 or less, and the value of the home must be at least 15% less than what is owed on the loan.
Comments

Mortgage Market News

Americans filing for first-time unemployment benefits dropped to the lowest levels since 1973 as the sector continues to improve ... albeit with slow wage growth. Weekly Initial Jobless Claims declined 13,000 in the latest week to 253,000, below the 268,000 expected. The four-week moving average, which irons out seasonal abnormalities, decreased to 265,000 last week from 266,500. The report measures the number of people who are filing or have filed to receive first-time unemployment insurance benefits, as reported weekly by the U.S. Department of Labor.
Consumer inflation was tame in March after an increase in February, despite the uptick in gas prices at the pumps.The March Consumer Price Index (CPI) rose 0.1%, below the 0.3% expected. The Core rate, which strips out volatile food and energy, also rose by 0.1%, below the 0.2% estimated. Gas prices were higher last month, offset by lower costs for clothing, furniture and used cars, while the cost for housing, medical care and cigarettes edged higher. On an annual basis, the headline CPI rose 0.9%, while Core was up 2.2%. Estimates called for CPI to rise 1%, Core 2.3%. CPI measures the average price level paid by urban consumers (80% of population) for a fixed basket of goods and services.
In corporate earnings, Bank of America reported that profits fell 13% in the first quarter, though earnings per share beat estimates, $0.21 versus the $0.20 expected. Revenues were lower than expected. Wells Fargo also reported that profits declined in the first quarter, but the bank saw earnings per share of $0.99 versus the $0.97 expected, while revenues were also higher than expected. Banks are saying that the consumer is healthy, though the banking business is tough.
Comments

Mortgage Marketing News

A recent report by Black Knight Financial Services showed that rising home prices lifted 1.5 million borrowers from negative to positive equity in 2015. However, there are still nearly 3.2 million homeowners across the nation that still owe more money on their current mortgage than what their homes are currently worth. The average negative equity rate is 6.5%, well improved from the worst levels during the housing market crash.
The Institute for Supply Management (ISM) reported on Tuesday that its ISM Service Index, rose to 54.5 in March, above the 53.5 recorded in February. The service sector has now grown for 74 consecutive months. Both the new orders and employment components saw gains last month. The data is signaling that business conditions are improving, just not at a robust pace that would be normal after a recession. A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction.
In a slight blow to the job market, the Labor Department reported that job openings fell by 159,000 at the end of February from the end January. There were 5.445 million openings at the end of February compared to 5.604 million at the end of January. The numbers come from the Job Openings and Labor Turnover Survey (JOLTS). The report is produced monthly by the Labor Department, is closely watched by Fed Chair Yellen and is a key barometer for monetary policy.
Comments

Mortgage Market News

Freddie Mac reported on Thursday that mortgage rates were unchanged this week and remain just above all-time lows. Earlier in the week, Fed Chair Janet Yellen indicated that the central bank should move cautiously in raising the short-term Fed Funds Rate.
Americans filing for first-time unemployment benefits rose this week, but still remain below the 300,000 mark for the longest stretch not seen the early 1970s. Weekly Initial Jobless Claims rose 11,000 in the latest week to 276,000, above the 265,000 expected. The labor market continues to strengthen, easing fears of the U.S. heading into a recession, though wage gains have been dismal. The four-week moving average of claims, which irons out seasonal abnormalities, rose 3,500 to 263,250.
The closely watched Jobs Report for March will be released by the Bureau of Labor Statistics on Friday morning and will be scrutinized by traders and investors around the globe. It is expected that employers added 200,000 new workers in March, which would be below the 242,000 created in February. Within the report it should show that the Unemployment Rate held steady at 4.9%, the lowest level since late 2008.
Comments

Mortgage Market News

Federal Reserve Chair Janet Yellen spoke at the Economic Club of New York yesterday regarding on monetary policy here in the U.S. Ms. Yellen said that given the weak global economy and low inflation in the U.S., the Fed will take a cautious approach to raising interest rates in 2016. Ms. Yellen did say that if economic activity strengthens, the central bank "could readily raise rates to stabilize the economy." Her remarks sparked a rally in global Stock markets which has continued here in the U.S. on Wednesday.
In the first of two job related reports this week, ADP reported that private payrolls in March rose 200,000, just above the 196,000 expected. February was revised lower to 205,000 from 214,000. The data comes ahead of Friday's government Jobs Report for March. Despite a weak global economy, U.S. job creation continues to add jobs at a robust pace. ADP said, small businesses added 86,000 jobs; midsize ones, 75,000, and large companies, 39,000.
The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of total mortgage loan application volume, fell 1% in the latest week. The data comes despite low mortgage rates and an uptick in eligible borrowers. The refinance index decreased 3% from the previous week and now makes up 52.4% of total applications.
Comments

Mortgage Market News

The January Case-Shiller 20-city Home Price Index rose 5.7% year-over-year, in line with estimates and matching December's 5.7% gain. Prices were up 0.8% month-over-month. The low inventory of homes available for sale has been the key reason for price growth, while low mortgage rates and a steady labor market are fueling demand. San Francisco, Seattle and Portland registered the largest gains year-over-year.
In central bank news, yesterday, the Atlanta Federal Reserve Bank reported that its forecast for Q1 2016 Gross Domestic Product will be a meager 0.6% and comes after yesterday's disappointing Personal Income and Spending data. The dismal 0.6% growth forecast is down from the faster pace of 2.3% originally projected. On the flip side, San Francisco Fed President John Williams says the U.S. economy remains on track for gradual rate increases, and fears over the impact of a slowing global economy are overdone.
The Conference Board reported on Tuesday that March Consumer Confidence rose to 96.2 from the 94.0 recorded in February. The uptick was due to consumers feeling more optimistic as a result of the stabilization in the U.S. Stock markets. The survey went on to say that consumers do not see any big improvements in the economy, but also don't see it getting any worse. In addition, consumers' outlooks for the labor market were more favorable.
Comments

Mortgage Market Newsx

Inflation pressures remained tepid in February as measured by the Core Personal Consumption Expenditures (PCE). The Core PCE rose just 0.1% month-over-month in February, below the 0.2% expected and down from the 0.3% recorded in January. The Core PCE, which excludes food and energy, measures prices paid by consumers for goods and services to reveal underlying inflation trends. The Core PCE year-over-year, which is the Fed's favored inflation gauge, rose 1.7%, which is below the 2% targeted by the Federal Reserve.
The Commerce Department also reported today that Personal Incomes rose 0.2% in February, reflecting a 0.1% decline in wages and salaries. Personal Spending rose slightly by 0.1% as consumers cut back on purchases in February. Consumer spending makes up about two-thirds of U.S. economic activity. Due to spending easing behind an uptick in income growth, the savings rate rose to its highest level in more than three years.
Over in the housing sector, February Pending Homes Sales surged 3.5% from January to its highest level in seven months, after a 3% decline in January. A spokesperson from the National Association of REALTORS® , which reports the data, said, "After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year1 and a modest, seasonal uptick in inventory."
Comments

Mortgage Market News

The U.S. Federal Reserve left its benchmark short-term Fed Funds Rate unchanged yesterday at the 0.375% level, which was expected. The Fed did say that it now feels that there will be two interest rate hikes in 2016, down from the four originally projected. In addition, the Fed went on to say that it lowered its numbers for Gross Domestic Product to 2.2% in 2016 from the 2.4% originally projected. The statement also read that global economic and financial developments continue to pose risks.
Manufacturing data this week has been encouraging for the beaten down sector. Earlier in the week the Empire Manufacturing Index turned positive for the first time since last July, while the Philadelphia region also reported a positive reading today. A stronger dollar coupled with lower commodity prices have been a few reasons behind the decline. The Philly Fed Index rose to 12.4 in March, well above the -1.4 expected and up from the -2.8 in February. Any reading above zero indicates improving conditions.
Americans filing for first-time unemployment benefits rose this week, but still remain below the 300,000 mark for the longest stretch not seen the the early 1970s. Weekly Initial Jobless Claims rose 7,000 in the latest week to 265,000, near inline with estimates. The labor market continues to strengthen easing fears of a U.S. is heading into a recession. A Labor Department analyst said there were no special factors influencing last week's claims data and no states had been estimated.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported this week that new home purchases soared 24% in February from January, as would be buyers got a jump on the spring buying season. To break it down, conventional loans composed 67.7% of loan applications, FHA loans composed 18.7%, RHS/USDA loans composed 0.8% and VA loans composed 12.8%. An MBA spokesperson said low interest rates and fairly mild weather in February were key ingredients to kicking off the spring buying season.
The Wall Street Journal recently surveyed business, financial and academic economists on the subject of the odds of a recession. The survey found that the odds of a recession in the next 12 months fell slightly, to 20% in this month’s survey from 21% last month. But the 20% is double from what they were last summer. One of those surveyed put the chances of a recession at 50% due to tightening financial conditions. On the other end of the aisle, another participant sees a zero percent chance of the U.S. falling into a recession.
The unofficial beginning of spring will take place this weekend when Americans "spring forward" at 2:00 a.m. Sunday morning. Spring officially arrives on March 20. Nowadays, most of our devices, including computers, smartphones, tablets and the like, will automatically adjust the time for us. However, remember to change the time on your stoves, microwaves and old school-clocks. In addition, it's a good time to change the batteries in your smoke and carbon monoxide detectors. Due to the time change, your commute to work may be darkerr, but your return home will be in daylight.
Comments

Mortgage Market News

The National Association of REALTORS® (NAR) reported on Monday that Pending Home Sales in January fell 2.5% from December. The NAR said that winter storms in parts of the country coupled with overheated home prices were the reasons for the unexpected declines. Pending Home Sales, an indicator of future closed sales, are just 1.4% higher than January of 2015.
"While January's blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers," said Lawrence Yun, chief economist for the NAR.
Business activity in the Chicago region fell into contraction territory in February. Chicago PMI fell to 47.6 this month, below the 55.6 in January and below the 52.0 expected. Within the report it showed that new orders and production rates also declined. A reading below 50 signals contraction. When asked what impacts lower oil prices had on activity, 48% of the respondents said that lower prices were boosting business due to lower freight and transportation costs.
Gas prices at the pumps remained low over the weekend with the national average price at $1.74 for regular, up nearly 4 cents in the last week. A petroleum analyst said that the eight-month decline at the pump looks like it's coming to an end. The highest price seen was $4.11 back in July of 2008. The drop in prices has come as oil prices have plunged due to a big surge in supplies of crude oil.
Comments

Mortgage Market News

The National Association of REALTORS ® reported on Tuesday that January Existing Homes Sales edged up 0.4% from December to an annual rate of 5.47 million units, above the 5.30 million expected: this was the highest level since July. In the past year, sales are up 11%, the largest year-over-year gain since the 16.3% annual rise in July 2013. Existing Home Sales is a measure of the selling rate of pre-owned single-family homes.
The Case Shiller 20-city Home Price Index rose 5.7% from the same period last year, inline with expectations. A spokesperson said that while home prices continue to rise, the pace is slowing a bit. From November to January, prices were up 0.8%. The big gains were seen in Portland, San Francisco and Denver. The ongoing positive signs from the labor markets are one of the reasons for making home affordability attractive to consumers, which is gradually pushing prices higher.
The Conference Board reported on Tuesday that Consumer Confidence hit a a seven-month low in February as the recent Stock market losses early in the year continues to weigh on the minds of Americans. Consumer Confidence fell to 92.2 this month, Below the 97.3 expected and down from the 97.8 recorded in January. “Consumers’ short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labor market prospects,” said Lynn Franco, director of economic indicators at the board.
Comments

Mortagge Market News

The Commerce Department reported that January Housing Starts fell 3.8% from December to an annual rate of 1.099 million units versus the 1.171 million expected, a three-month low. All four major regions across the country saw declines in starts, while a big East Coast snowstorm caused a halt in some late month construction in that area. January Building Permits, a sign of future construction, fell 0.2% from December to 1.202 million units, just above the 1.200 million expected, while December was revised lower to 1.204 million from 1.232 million.
Wholesale inflation, as measured by the Producer Price Index (PPI), rose 0.1% in January, above the -0.2% expected and above the -0.2% recorded in December. On an annual basis, PPI decreased 0.2% after declining 1.0% in December. However, Core PPI, which strips out volatile food and energy, surged 0.4%, well above the 0.0% expected and up 0.8% annually. The one month jump in Core prices does not constitute a pattern and the Fed will more closely watch the Consumer Price Index releasing on Friday. Inflation overall remains tepid with no threat of gathering speed at this time.
Economic growth appears to have slowed in late 2015 and at the start of 2016, perhaps foreshadowing another year of potentially unspectacular economic growth, according to Fannie Mae’s Economic & Strategic Research Group’s February 2016 Economic and Housing Outlook. On the housing front, home price gains are likely to outpace household income growth as the year continues. However, the rise in home prices should help lift underwater mortgages and create a healthier housing market.
Comments

Mortgage Market News

Global Stock markets melted down overnight and the carnage is spilling over here in the U.S. markets. Economic weakness in both Europe and China coupled with big share price losses in European bank shares are a few of the reasons behind the recent decline. Yesterday, Federal Reserve Chair Janet Yellen said that the global economic malaise could be hit by the current turmoil, which added fuel to the decline in the major U.S. Stock indexes.
A recent report from the National Association of REALTORS® (NAR) found that receding housing inventories are constraining the housing market, causing potential buyers to remain on the sidelines. And the NAR said the problem is not going to end anytime soon. Tighter inventories coupled with an uptick in buyers have pushed home prices higher. “Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead,” said Lawrence Yun, NAR chief economist.
Comments

Mortgage Market News

The first of two key labor market reports was released today showing that private employment slowed a bit in January from December, but the final number was better than expectations. ADP reported that private employment grew by 205,000 in January, below the 267,000 recorded in December, which was revised higher from 257,000. Solid growth was seen in service providers, which added 192,000 to the total. The 205,000 jobs created was above the 190,000 expected.
Over in the service sector, the Institute for Supply Management (ISM) reported that its ISM Service Index fell 2.3 points to 53.5 in January as growth in the service sector slowed a bit. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates the non-manufacturing sector is generally contracting. Within the report it showed that new orders as well as the employment component decreased.
Given the recent mediocre readings in economic data, chances of an interest rate hike from the U.S. Federal Reserve are decreasing. In addition, the Bank of Japan's recent move to a negative interest rate policy, weak economic growth in the fourth quarter, and a fairly dovish statement from the last week's Fed meeting have all lowered the chances even further. Traders now see less than a 30% chance of even one rate hike at any Federal Reserve meetings this year, according to data from the CME Group.
Comments

Mortgage Market News

The Commerce Department reported on Wednesday that December New Home Sales surged 10.8% from November to an annual rate of 544,000 units, above the 506,000 expected. It was third consecutive monthly gain and the third best annual gain since 2008. Sales rose 14.5% in 2015 to 501,000 due to increased confidence in potential home buyers, a strengthening labor market along with low mortgage rates. New Home Sales are based upon the following definition: "A sale of the new house occurs with the signing of a sales contract or the acceptance of a deposit." The house can be in any stage of construction: not yet started, under construction, or already completed.
Shares of Apple Inc. are falling in today's trading after a sobering report on its iPhone sales. The popular smart-phone has seen sales grow at their slowest pace since the introduction to the iPhone in 2007. The company also stated that revenues in the current quarter are expected to decline for the first time in 13 years, signaling the stratospheric growth may be cooling. Apple went on to say that the strong dollar and slowing global growth are the reasons behind the decline in sales. In addition, China, its largest overseas market, has begun to show "signs of economic softness" in the past few months.
Comments

Mortgage Marketing News

The National Association of REALTORS® reported on Friday that December Existing Home Sales surged nearly 15% from November to an annual rate of 5.46 million units, above the 5.12 million expected. However, the big gains could be because of closing being put off until December due to TRID rules or “Know Before You Owe”. Sales were up 7.7% from a year ago. Existing Home Sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops.
After the recent big losses racked up the U.S. Stock markets, prices rose yesterday and are rising today due in part to oil prices gushing higher. In addition, dovish comments from European Central Bank President Mario Draghi also helped to push prices higher. The closely watched S&P 500 Index has lost a little over 7% to start the year, its worst start to a year on record. To put things into perspective, at the height of the Great Recession in March of 2009, the S&P hit 666 and is now at 1,894.
A massive snowstorm is set to impact nearly 75 million people stretching from the Southeast all the way up to New York City. The storm, labeled Jonas, could dump up to 3 feet of snow in some areas with blizzard warnings throughout the Mid-Atlantic and Northeast states. Washington D.C. could see up to two feet of the white stuff, which has already prompted school closing and government shutdowns. Winds could reach up to 60 miles per hour with coastal storm surges and flooding set to occur.
Comments

Mortgage Market News

After big gains in November, December Housing Starts declined 2.5% from the previous month, raising concerns about the health of the U.S. economy. The Commerce Department reported that Housing Starts came in at an annual pace of 1.149 million units, below the 1.197 million expected. This follows a recent spate of weak economic data. On the bright side, December was the ninth straight month that Housing Starts were above 1 million units, the longest stretch since 2007. For 2015, Housing Starts were up nearly 11%.
Inflation at the consumer level remained tame in December as energy prices continued to decline. The Consumer Price Index (CPI) fell 0.1% after being unchanged in November. The so-called Core CPI, which strips out volatile food and energy prices, rose 0.1%. In the 12 months ending in December, CPI increased 0.7%, the biggest increase in a year, while Core CPI was up 2.1%, the largest gain since July 2012.
The Mortgage Bankers Association reported on Wednesday that its Market Composite Index, a measure of total mortgage loan application volume, rose 9% in the latest week. With mortgage rates just above historical lows, would-be borrowers chose to refinance their homes.
Comments

Mortgage Market News

The foreclosure arena got a little brighter today as RealtyTrac reported that 2015 foreclosure filings fell to their lowest level since 2006. RealtryTrac said that there were nearly 1.1 million properties with foreclosure filings in 2015, the lowest since 2006 with 717,522. In addition, the 103,373 filings in December were down 30% from December 2014. “In 2015 we saw a return to normal, healthy foreclosure activity in many markets even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis,” said Daren Blomquist, vice president at RealtyTrac.
Banking giant JPMorgan Chase reported solid earnings for the latest quarter, but CEO Jamie Dimon warned that the U.S. economy is likely to worsen after years of growth. Mr. Dimon isn't about to call for a recession and says that the economy "still looks okay," but cites concerns surrounding China's economy and the steep drop in commodity prices. The bank reported earnings-per-share of $1.32, above the $1.25 expected, but this was mainly derived from lower expenses as revenues fell 2% for the year.
Fitch Ratings reported that U.S. home prices are expected to rise by 4.5% this year, though there are some trouble spots, with some regional markets being called overvalued. Fitch went on to say that California and Texas may soften a bit, but "large downturns are unlikely." “U.S. mortgage rates are expected to rise 25 basis points to 50 basis points by year end, which should not affect existing borrower performance in a mostly fixed-rate market but it will encourage lenders to broaden loan eligibility requirements as refinance volumes dry up,” Fitch added
Comments

Mortgage Market News

The Bureau of Labor Statistics (BLS) reported on Tuesday that job openings rose in November, which led to more Americans to leave their current jobs and search for better positions. The BLS reported that this was the most people that left their jobs in more than seven years. In November, the number of job openings waiting to be filled climbed by 82,000 to 5.43 million. The numbers came from the release of the JOLTS (Job Openings and Labor Turnover Survey) report.
The National Federation of Independent Business (NFIB) reported on Tuesday that its Small Business Optimism Index rose slightly in December. Business owners were split as some felt more confident about sales, but at the same time, more pessimistic surrounding general business conditions. The NFIB Small Business Optimism Index gained a modest 0.4% in December to 95.2, which is still below the 42-year average of 98.0.
Comments

Mortgage Market News

Labor market news kicked off 2016 on the bright side as employers added more private jobs than expected in December. Payroll processor ADP reported that private payrolls increased by 257,000 in December, above the 190,000 expected. The warm weather in December was projected to bump gains in the job markets. ADP said large businesses added 97,000 jobs, midsize ones, 65,000, and small businesses, 95,000. The report comes ahead of the government's December Jobs Report, which is due out on Friday morning.
Reports that North Korea has successfully tested a hydrogen bomb along with economic woes out of China, are fueling a Stock sell-off on Wall Street today. Also weighing on Stock prices is that oil has fallen to an 11-year low due to continued buildups in supplies. The closely watched Dow Jones Industrial Average has fallen more than 200 points in today's session and has declined by nearly 800 points or 4.5% since December 29 of last year.
Popular smartphone maker Apple is reportedly slowing iPhone production by 30%, which signals a slowdown in sales later this year. Apple has reduced orders to suppliers leading to layoffs and idle capacity at Apple’s Chinese suppliers. Shares of Apple were down nearly 5% in 2015 and are down 2.2% this year. At the current price of $101, the Stock is well off last year's high of $133.
Comments

Mortgage Market News

The housing sector continues to see solid home price gains due to strong demand and tight supplies, in addition to low mortgage rates. CoreLogic reported on Tuesday that home prices, including distressed sales, rose 0.5% from October to November and are up 6.3% from November 2014 to November 2015. Dr. Frank Nothaft, chief economist for CoreLogic says, "Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5% and 6% on a year-over-year basis for 16 consecutive months."
With the holiday shopping season over, sales figures are out for the period from Black Friday through Christmas Eve. MasterCard reports that total sales grew by a sold 7.9% this season, which excludes automobiles and gas, compared to the 5.5% gain in the same period in 2014. MasterCard went on to say that a delay in the onset of cold weather pushed back purchases of winter coats and winter-related apparel, so there was pent up demand after Black Friday. Consumers also had savings from lower gas prices, which they spent during the season.
After the holiday shopping season is over ... what comes next? The holiday return season. January is typically the month in which those gifts that are unwanted, the wrong size or the wrong color, will now have to be returned and exchanged or refunded. But know before you go: meaning, before you head out to the mall to return or exchange, be sure to know the retailers policies. Most retailers return policies remain pretty generous, but complicated, nonetheless. Go to ConsumerWorld.org for all the up-to-date return policies for retailers.
Comments

Mortgage Market News

The manufacturing sector of the U.S. economy continues in its malaise due to a strong dollar and weak demand from overseas. The national ISM Manufacturing Index slid to 48.2 in December, slightly lower than the 48.6 recorded in November. A reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 indicates contraction. Within the report it showed that the employment component declined, while the new orders index climbed.
Black Knight Financial Services reported on Monday that its Home Price Index report for October showed that prices rose 0.2% from September to October. In addition, home prices rose 5.5% higher in October 2015 from one year prior. It was the 42nd straight month of year-over-year home price appreciation. Black Knight went on to say that October's national home price index of $254,000 now puts prices up nearly 27% since the bottom of the market of 2012.
The U.S. Stock markets are getting off to a rocky start in 2016 as the major indexes plunge due to heightened tensions in the Mideast coupled with weak economic data out of Asia. Stock prices in China fell so hard that it caused the Shanghai Exchange to suspend trading for the session after a 7% decline. Here in the U.S. the closely watched S&P 500 Stock Index is down 2.50% or 52 points, while the Dow Jones Industrial Average plunged 450 points.
Comments

Mortgage Market News

The National Association of REALTORS® (NAR) reported on Tuesday that Existing Home Sales in November fell 10.5% from October to an annual rate of 4.76 million units. It was the sharpest monthly decline since July 2010. A spokesperson from the NAR said that new regulations from TRID, affordability and lower inventories led to the decline. Sales declined around the nation, down 13.9% in the West, 6.2% in the South, 15.4% in the Midwest and 9.2% in the Northeast.
The government reported the final figures on economic growth for the third quarter of 2015 today revealing that Gross Domestic Product (GDP) edged lower to 2% from 3.9% recorded in the second quarter. Growth fell due to a larger trade deficit and a smaller buildup in inventories. So far in 2015, GDP is running at 2.16%. well below the historic rate of 3.3%. If the economy continues on this lackluster pace through December 31, it will have failed to reach 3% growth for the 10th straight year, marking the slowest stretch since the end of WWII.
With the holiday shopping season coming to a close, retailers were looking to the weekend before Christmas to boost sales in what has turned out to be a slow start to the season. This past weekend retailers did have increased store traffic, but they were led by promotions. In many parts of the country, the temperatures have been unseasonably high, which slowed sales of sweaters, winter coats, scarves and the like. So if you are heading out for some last minute shopping, there could be some great deals on winter apparel
Comments

Mortgage Market News

Freddie Mac reports that even in the midst of the Federal Reserve raising the benchmark short-term Fed Funds Rate, mortgage rates may see modest increases, but will stay at historic lows in 2016. Freddie went on to say that home sales will remain strong next year, while refinance activity should somewhat cool. Analysts at sister company Fannie Mae said the current fixed of 3.97% will rise only to 4.1% next year this time.
With millions of young Americans entering the workforce or already working, many are straddled with student loans to pay off. With the Federal Reserve raising short-term interest rates earlier this week, the question many are asking is if their interest rates will go up for their existing loans. The answer is no. Those already with loans will not see the rate go up, for they are fixed rates over the life of the loan. It is possible that borrowers taking out new student loans next year may feel a rate increase. The bulk of student loans are issued by the federal government, so as mentioned, those rates will not increase. However, those with private student loans, which often carry a variable rate, could see rates edge higher.
Comments

Mortgage Market News

The Federal Reserve Bank (the Fed) of the U.S. finally raised its short-term interest rate for the first time in nearly a decade yesterday. There is a misconception amongst consumers that mortgage rates automatically will push higher because of this. The Fed, however, does not control long-term rates, which are actually based based on economic conditions and inflation expectations. On the other hand, consumers will be impacted as the following rates are adjusted higher - short term interest rate loans, credit card rates, HELOC rates, and auto, business and student loans.
Americans filing for first-time unemployment benefits declined in the latest week, signaling ongoing improvement in the labor markets. Weekly Initial Jobless Claims fell 11,000 in the latest week to 271,000, the 41st straight week below the 300,000 level. That is the longest stretch since the early 1970s. The four-week moving average of claims, which irons out seasonal abnormalities, remained unchanged at 270,500. Continuing claims or those who still receive benefits fell 7,000 to 2.24 million.
Fannie Mae released its December 2015 Economic and Housing Outlook this week revealing that economic activity in the fourth quarter appears to be weaker than expected. The report went on to say that real consumer spending is expected to rebound early next year amid a tightening labor market and a renewed decline in gasoline prices, helping to offset persistent economic headwinds. “Home sales will likely remain subdued in the near term, but private residential construction spending started the fourth quarter on a strong note and housing demand is looking up as we head into next year,” said Fannie Mae Chief Economist Doug Duncan.
Comments

Mortgage Market News

The housing sector is ending the year on a high note! The Commerce Department reported on Wednesday that Housing Starts in November rose 10.5% from October to an annualized rate of 1.173 million units, above the 1.135 million expected. The big jump in November nearly erases the 12% decline from September to October. Within the report it revealed that single-family starts were up 7.6 percent from October to the highest level since January 2008. Housing Starts are up nearly 17 percent in November from a year earlier.
Americans are gearing up for the end of year holiday traveling to Grandma's house in a big way. Auto club AAA predicts that year-end holiday travelers will hit over 100 million for the first time ever. AAA reports that 1 in 3 Americans will travel 50 or more miles between December 23 and January 3, which is a 1.4% increase over last year and the seventh consecutive year of travel growth for the holiday period. The auto club cites low gas prices at the pumps and a strengthening economy and labor market for the increase. AAA went on to say that driving will be the most popular way to travel.
The decline in gas prices this year has put some extra money in the pockets of American drivers. It is estimated that drivers saved about $540 in 2015 thanks to the low prices at local gas stations. And if you have two drivers in your household, that would double to $1,100. So, what are people doing with the extra cash? Dining out more. The low gas prices have also helped Americans buy a record number of new vehicles this year. If you think gas prices are low now at an average price for a regular gallon of gas at $2, 2016 may bring even lower prices.
Comments

Mortgage Market News

Inflation at the consumer level was tame in November, but an underlying measure of inflation continues to edge higher. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) was unchanged last month due to lower gas and food costs. However, when stripping out volatile food and energy, the so-called Core CPI rose 0.2% on higher rental costs and hotel rates. On an annual basis, the Core CPI was up 2% and has been trending higher.
The manufacturing sector of the U.S. economy continued to contract in December due to a strong dollar, a weak global economy and low oil and other commodity prices. The New York State Manufacturing Index registered a -4.6 reading this month, which was better than the -5.9 expected and above the -10.7 recorded in November. Just recently the national manufacturing index, the ISM Index, contracted to 48.6% in November, the lowest level since June 2009.
The National Association of Home Builders (NAHB) reported that builder confidence slipped in December due to recent concerns with the high price of lots and labor. The NAHB Housing Market Index fell 1 point to 61 this month, below the 62 in November and below the 63 expected. “For the past seven months, builder confidence levels have averaged in the low 60s, which is in line with a gradual, consistent recovery,” said NAHB Chief Economist David Crowe. “With job creation, economic growth and growing household formations, we anticipate the housing market to continue to pick up traction as we head into 2016.”
Comments

Mortgage Market News

Oil prices continue to drift lower hitting 11-year lows as a glut of oil supply flows through the global pipelines. West Texas Intermediate oil fell to $34.53 in today's trading. The drop in oil prices has led prices lower at your local gas stations. The national average price for a regular gallon of gasoline is at $2.01, while prices have fallen below $2 a gallon in 41 states. Last year at this time prices at the pumps averaged $2.55, and prices have fallen from the $2.17 seen a month ago. The drop in prices could boost holiday spending, but we will see when the numbers are reported in a few weeks.
The two-day Federal Open Market Committee meeting kicks off on Tuesday and will culminate on Wednesday with the 2:00 p.m. ET release of the monetary policy statement. It is widely expected that the central bank will raise its benchmark Fed Funds Rates by a 1/4 point for the first time in nine years. The Fed has kept the fed Funds Rate near zero percent since 2008 in an effort to promote economic stability and job growth. The Fed Funds Rate is the rate in which financial institutions lend balances held at the Federal Reserve to one another on an overnight basis. The increase could raise interest rates on bank fees, car loans and credit cards.
Be on the lookout for the Grinch in your neighborhood when getting packages delivered from the Post Office, UPS, FedEx and the like this season. U.S. online sales during the season pose a big feast when those packages lay idle at your doorstep. A recent report shows that an estimated 23 million Americans have had packages stolen from their homes and the number is expected to increase as online shopping begins to overtake the traditional brick and mortar stores. So called "Porch Pirates" usually trail a delivery truck and pounce on the merchandise as soon as the driver is out of sight. Delivery companies are now giving alternatives to how they receive their packages. UPS is expanding its UPS Access Point network, which offers package pickup and drop off primarily at neighborhood convenience and grocery stores, dry cleaners and delicatessens to 8,000 U.S. locations and 22,000 worldwide by the end of this year.
Comments

Mortgage Market News


The Mortgage Bankers Association (MBA) reported this week that mortgage applications for new home purchases declined by 6% in November compared with October. The MBA said that there were 37,000 new home sales in November, a decline of 5.1% compared to the 39,000 sold in October. New Home Sales were at an annual pace of 524,000 units in November, an increase of nearly 6% from the October pace of 495,000.
Consumer Sentiment was virtually unchanged in early December, though Americans evaluated economic conditions more favorably. The Consumer Sentiment Index came in at 91.8, just above the 91.6 expected and higher than November's reading of 91.3. A spokesperson said, "The survey recorded persistent strength in personal finances and buying plans, while the largest loss was in how consumers judged prospects for the national economy during the year ahead."
With the holiday shopping season well underway, consumer spending rose modestly in November, signaling that the sales are off to a good start, though less than spectacular. November Retail Sales rose 0.2% to $448 billion last month, up from 0.1% in October. Cheap gasoline prices have depressed overall sales volumes. The Retail Sales report is closely watched by economists each month to gauge spending habits by consumers, it drives 70% of the U.S. economy.
Comments

Mortgage Market News

The number of Americans filing for first-time unemployment benefits continues to hover near lows seen in the early 1970s as the labor market continues to strengthen. As the end of the year approaches, claims tend to have a tendency to be a bit more volatile around the holiday season. The Labor Department reported that Weekly Initial Jobless Claims rose by 13,000 in the latest week to 282,000, the highest level since early July. Claims have now remained below the 300,000 level for 39 straight weeks.
Mortgage rates edged higher in the latest week following an upbeat Jobs Report, though rates still hover just above all-time lows. Freddie Mac reported that the 30-year fixed conventional mortgage rate ($417,000 or less), rose. The 15-year fixed average rate climbed to 3.19% with average points and fees of 0.5. A year ago the 30-year rate was 3.93%, while the 15-year was 3.2%.
A recent survey conducted by the CNBC All-America Economic Survey reveals that just 22% of Americans see the economy improving, a five-point decline from last year this time. The survey could be signaling that consumers may be spending less on holiday shopping this year. Just 13% of those polled plan to spend more; 56% are planning to keep holiday spending at last year's level and 29% said they will reduce spending. The saving grace this year, low prices at the gas pumps, where the average national price is near $2 a gallon.
Comments

Mortgage Market News

Small business owners' optimism turned lower in November, pointing to slower sales and growing inventories as consumers spent more cautiously. The National Federation of Independent Business's Small Business Optimism Index was unchanged in November slipping to 94.8 from 96.1 in October. Within the report it showed that six of the components fell from October, led by a decline in sales. On the bright side, owners continue to hire at a healthy pace with 45% reporting that they are hiring or trying to hire, though many owners are finding it more difficult to find qualified applicants.
The foreclosure sector of the housing market continues to improve as the housing market strengthens. CoreLogic, a consumer, financial and property information and analytics firm reported on Tuesday that completed foreclosures were down 27.1% from a year ago, while foreclosure inventories were down 21.5% compared with a year ago. The share of mortgages in serious delinquency, which is defined as being 90 days or more past due, as well as those in foreclosure or owned by lenders, hit a near-eight-year low of 3.4% in October.
With the holiday shopping season in high gear, Mintel International released a report showing that consumers are planning to spend $805 on holiday merchandise, up slightly from $802 last year. November and December are two of the most critical months of the year for retailers as sales during this period make up 30% of their annual revenues. Retail sales are expected to increase by 3.7% this year, which will hit an estimated $630.5 billion. Retailers cite improving economic and job growth along with low gas prices as a few of the factors contributing to strong sales this season.
Comments

Mortgage Market News

The continued improvement in the U.S. economy could be a signal that short term interest rates will rise at next week's Federal Open Market Committee meeting held on December 15-16. The Federal Reserve Bank of the United States have held short rate close to zero, since the Great Recession began in late 2008. But with an improving economy, the Federal Reserve feels it is now time that interest rates begin to rise. The interest rate in question is the Federal Funds Rate, which is the rate in which banks lend balances at the Federal Reserve to other banks on an overnight basis.
The U.S. Stock markets got off to a rocky start this week as the closely watched Dow Jones Industrial Average was nearly 200-points lower in early trading. Stocks have had a volatile year after solid gains seen in 2014. The Dow is currently down 1% year-to-date after an 8% rise last year. However, the Dow is up from the 6,500 level hit back in March of 2009 to the present level of 17,700.
Popular food chain, Chipotle, continues to endure the aftershocks from its recent E.coli breakout that has now expanded into nine states. The crux of the problem is due to the fact that Chipotle and other restaurants are putting greater focus on fresh unprocessed foods and while it may be good nutrition wise, it raises the risk of foodborne illnesses because cooking kills pathogens that cause illness. Because of this problem, the company expects sales to fall 8-11% this quarter.
Comments

Mortgage Market News

CoreLogic, a consumer, financial and property information and analytics firm, reported that home price gains, including distressed sales, rose 6.8% from October 2014 to October 2015 as the housing recovery marches on. A spokesperson from CoreLogic said, “Many markets experienced a low inventory of homes offered for sale and strong buyer demand, sustaining upward pressure on home prices.” On a month-over-month basis, prices rose 1%, while the numbers for September 2014 to September 2015 were revised down to 5.55% from the 6.4% originally reported. Looking ahead, CoreLogic sees a 5.2 % increase from October 2015 to October 2016.
National manufacturing slipped again in November and fell below the 50.0 mark for the first time since November 2012 and the lowest level since June 2009. A few of the reasons for the decline is low oil prices coupled with a strong dollar. The ISM Index fell to 48.6 last month, below the 50.5 expected and below the 50.1 recorded in October. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.
A recent poll conducted by Reuters to a group of economists showed sales of existing homes in the U.S. are expected to pick up in 2016, although house price inflation probably will not. However, there are some risks in so far as some potential borrowers may be shut out due to a lack of available credit, low wage growth and higher interest rates. Of the 22 polled, 19 said they see the housing recovery as modest, three called it robust. None said it will be fragile.
Comments

Mortgage Market News

Americans flocked to the malls this past weekend and online to purchase gifts as the holiday shopping season unofficially kicked off with Black Friday. The National Retail Federation (NRF) reported that more than 151 million people said they shopped in stores and/or online during the long weekend. The NRF went on to say that more than 121 million people will purchase items online today, which is known as Cyber Monday, a 5% decrease from last year's 126 million.
The manufacturing sector continues to be a drag on the U.S. economy as evidenced by the recent weak numbers from the New York State region and today's report from the Chicago area. The Chicago Purchasing Managers Index, a measure of business activity, fell to 48.7, below the 55 expected and down from the 56.2 recorded in October. Readings below 50 indicate contraction, above 50, expansion.
The National Association of REALTORS® reports that Pending Home Sales in October increased 0.2%, below the 0.7% expected following two months of declines. The index is up nearly 4% from a year ago and has produced annual gains for 14 straight months. Pending Home Sales measures signed real estate contracts for existing single-family homes, condos and co-ops. Lawrence Yun, NAR chief economist, says pending sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.
Comments

Mortgage Market News

Home prices experienced solid gains across the U.S. as the sector continues to improve. The Case Shiller 20-city Index saw home price gains rise 5.5% on an annual basis from September 2014 to September 2015, up from the 5.1% recorded in August on a year-over-year basis. However, the lofty gains could be shutting many buyers out of the market. The national index rose 0.8% from August to September. "Home prices and housing continue to show strength with home prices rising at more than double the rate of inflation,” said David Blitzer, managing director at S&P Dow Jones Indices, which produces the numbers for the Case Shiller report.
The Bureau of Economic Analysis reported on Tuesday that the second reading for economic growth in the third quarter was revised higher from the initial reading, led by a buildup in inventories. Gross Domestic Product rose to 2.1% from the 1.5% originally reported, but well below the 3.9% recorded in the second quarter. Within the numbers it showed that consumer spending edged lower, though it still remains at a brisk pace of 3%. Gross domestic product is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.
Consumer Confidence declined to the lowest levels since September 2014 as Americans were less favorable on the job market. The Conference Board reported that its Consumer Confidence Index fell to 90.4 in November, below the 99.6 expected and down from the 99.1 registered in October. Within the report it said that those anticipating more jobs in the months ahead declined, while those anticipating fewer jobs increased.
Comments

Mortgage Market News

The National Association of REALTORS® (NAR) reported on Monday that Existing Home Sales in October declined 3.5% from September to an annual rate of 5.36 million units, lower than the 5.50 million expected. Year-over-year, sales were up 3.9%. The NAR said that the WestERN region was hit the hardest with a near 9% decline. The median home price for all housing types was $219,600, which is 5.8% above the $207,500 recorded in October 2014. Inventories declined to 4.5%.A spokesperson from the NAR said
Fannie Mae released its November Economic and Housing Outlook revealing that it sees economic growth rising the fourth quarter of 2015 bringing the yearly total to 2.2% with a slight pickup to 2.4% in 2015. Fannie Mae said that solid consumer spending, an increase in construction activity, home sales and home prices appear poised to offset global headwinds. On the housing end, Fannie Mae expects mortgage rates to rise only gradually through next year, and an improving income trend should support affordability.
Fun facts about Thanksgiving. On December 26, 1941, President Franklin D. Roosevelt signed a joint resolution of Congress changing the national day of Thanksgiving from the last Thursday of the month to the fourth Thursday. The first Macy's Thanksgiving parade took place in New York City in 1924. It featured animals from the Central Park Zoo instead of floats; floats didn't join the route until 1927. The average person consumes 3,000 calories during Thanksgiving dinner. With other meals and snacking included, it can add up to around 4,000 and 6,000 calories.
Comments

Mortgage Market News

The San Francisco Federal Reserve Bank reported this week that it doesn't see another housing bubble forming. In its findings, the bank said that home prices have rebounded and are nearly back to the pre-recession peak. The bank said, "However, conditions in the latest boom appear far less precarious than those in the previous episode. The current run-up exhibits a less-pronounced increase in the house price-to-rent ratio and an outright decline in the household mortgage debt-to-income ratio—a pattern that is not suggestive of a credit-fueled bubble."
Research firm CoreLogic reported this week that cash sales accounted for 31.7% of total home sales in August, down from 34.9% in the same month last year. August rose 0.8% from July. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. According to CoreLogic’s report, the cash sales share typically increases month over month in August due to seasonality in the housing market. CoreLogic does see cash sales to return to pre-recession levels in 2017.
Black Friday deals will be coming early this year and could start as early as this weekend. A spokesperson for BlackFriday.com says deals are spread out over a longer time period this year. Amazon, Best Buy and Costco have already begun to roll out deals, but the "doorbuster" prices will be reserved for Thanksgiving night and Friday. Black Friday is the day after Thanksgiving in the United States. Retailers generally see an upward spike in sales and consider this to be the start of the holiday shopping season. It's common for retailers to offer special promotions and to open early to draw in customers.
Comments

Mortgage Market News

Americans filing for first-time unemployment benefits fell in the latest week and now are near levels seen in the early 1970s. The Labor Department reported on Thursday that Weekly Initial Jobless Claims fell 5,000 in the latest week to 271,000, which was in line with expectations. The four week moving average of claims, which irons out seasonal abnormalities, rose by 3,000 to 270,750, the highest in eight weeks, though still a very low number. The low level of claims signals an improving job market, while the economy remains on a steady upward growth pattern.
Manufacturing activity in the Philadelphia region improved marginally in November. The Philadelphia Fed Index rose to 1.9 in November from the -4.5 recorded in October. Within the report it showed that the new orders and shipment components remained negative, while the employment index improved overall, though there was a decline in average work hours. Manufacturing activity has been edging lower throughout the year, due in part to a decline in the energy sector.
In an about-face, UnitedHealth Group Inc. the U.S.'s biggest health insurer, is considering pulling out of Obamacare, a month after the insurer said that it would expand its presence in the program. The insurer is pulling back on marketing efforts for the plans it's selling this year under the Affordable Care Act, and may exit from that market in 2017. UnitedHealth cited the business has proven to be more costly than expected.
Comments

Mortgage Market News

The Commerce Department reported on Wednesday that Housing Starts in October fell 11% to an annual rate of 1.060 million units versus the 1.173 million expected. October’s numbers hit a seven-month low, but starts remained above the one million mark for seven straight months. This is the longest such streak since 2007. On the brighter side, Building Permits, a sign of future construction, rose 4.1% from September. The data signals a sustainable housing market recovery.
Shares of Apple received a boost this morning after investment banking giant Goldman Sachs said Apple's stock could rise 43% in the next 12 months. Goldman Sachs cited that the iPhone Upgrade Program, Apple Music, and upcoming streaming television products could be a game changer for how the market views the tech giant. The price per share of Apple is currently around $116 and could go to $163, said Goldman Sachs.
The Department of Energy (DOE) recently reported that due to warmer temperatures expected this winter, U.S. consumers will most likely pay less to heat their homes this season compared to last year. For those using propane, expect to see a 27% decline or $767 this season. Homes that heat with oil could see a drop of 15% or $362, while natural gas users will see a savings of 5% or $31. "U.S. households in all regions of the country can expect to pay lower heating bills this winter, because temperatures are forecast to be warmer than last winter and that means less demand for heat," said the DOE's Energy Information Administrator Adam Sieminski.
Comments

Mortgage Market News

Business activity in the New York State region declined for the fourth straight month in November, signaling that manufacturing activity remains weak. The New York State Index fell to 10.7 in November, below the -6.0 expected after falling in October. Within the report, it showed that the new orders and shipments components declined, while the employment numbers were also weak.
Just in time for the Thanksgiving drive to Grandma's house, gas prices should slip this week after the price of oil fell to near $40 a barrel in trading in New York City. The national average price for a regular gallon of gasoline hit $2.15 this week, down from $2.21 a week ago and $2.28 a month ago. "Americans are finding the cheapest gas prices for this time of year since 2008," said Mark Jenkins, spokesman of AAA - The auto club group. "Now that oil prices are falling again, pump prices should get even cheaper as we approach the holiday travel season."
The Mortgage Bankers Association (MBA) reports that its Builder Application Survey showed mortgage applications for new home purchases fell by 8% in October from September. The decline was due in part to the new TRID rules that went into effect recently. The survey tracks application volume from mortgage subsidiaries of home builders across the country. Despite the decrease, the MBA's estimate of new single-family housing sales for October was up more than 7% from a year ago.
Comments

Mortgage Market News

Fannie Mae released its Home Purchase Sentiment Index (HPSI) for October showing a slight decrease from September, falling to 83.2 from 83.8. The survey revealed consumers volatile outlook on both household income improvement and mortgage interest rates which kept housing sentiment relatively flat. The HPSI Household Income component declined and the "Good Time to Buy" and "Good Time to Sell" components also decreased, after picking up in September. These dips suggest hesitancy by some consumers to make long-term financial commitments such as buying or selling a home.
Mortgage rates edged higher this week ahead of a possible Federal Reserve interest rate hike next month. Freddie Mac reported that the 30-year fixed conventional mortgage rate rose. Mortgage rates continue to hover just above the all-time lows.
RealtyTrac reported on Thursday that foreclosure filings, which include default notices, scheduled auctions and bank repossessions, rose 6% in October from September. The rise in filings was due primarily to a 12% increase in foreclosure starts, the largest month-over-month increase since August 2011. The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month, broken out by the type of filing.
Comments

Mortgage Market News

Research firm CoreLogic reported that there were 55,000 completed foreclosures nationally, down from 67,000 in September 2014, a 17.6% decrease. The report went on to say that there has been a 52.8% decline since the peak of the foreclosure problems when there were 117,438 foreclosures in September 2010. In addition, completed foreclosures jumped 49.5% from August 2015 to September 2015, which was due in part to the result of an annual public auctioning of thousands of tax-foreclosed properties in Wayne County, Michigan.
With the Federal Reserve almost set to raise interest rates (the Fed Funds Rate) next month, consumers could be impacted. If you are buying a home and using an adjustable rate mortgage (ARM) to finance the purchase, those rates will move higher, as ARMs closely follow the Fed Funds Rate. If you are shopping for a home equity loan, those rates will also increase, as will home equity lines of credit. Interest rates on most credit cards and rates on certificates of deposits, money markets, and savings accounts will increase as well.
On the lighter side, with Thanksgiving right around the corner, here are a few facts: Approximately 46 million turkeys are eaten on Thanksgiving every year. The Macy's Thanksgiving parade began in 1924 with only 400 employees. More alcohol is consumed on Thanksgiving than any other holiday of the year. One last fact, while Turkey does contain tryptophan, which could make us feel drowsy, sleepiness is more likely caused by the over-consumption of alcohol and food, especially desserts.
Comments

Mortgage Market News

Government sponsored entities and mortgage service giants Fannie Mae and Freddie Mac reported last week that their benchmark interest rate for the standard mortgage modification program fell below 4% for the first time since the program began in January 2012. The new rate is 3.875% and has been in effect for Freddie Mac since November 5, while Fannie Mae’s will begin on November 13. The program is "designed to help those borrowers who are ineligible for the Home Affordable Modification Program."
The chances of an interest rate hike from the Federal Reserve grew larger after the strong October Jobs Report was released last Friday. The U.S. economy has been gaining strength in the past year and the Federal Reserve may feel that it is time for interest rates to rise, after being near zero percent since late 2008. If rates do rise, responsible buyers will still have easy access to loans and low-rates, however, banks will demand higher interest payments from less-qualified consumers.
Thanksgiving travel will be a bit less costly this season with airline flight costs lower, along with the price of gasoline if traveling to grandma's by car. Thanksgiving flights for the top 10 destinations are down by an average of nine percent from last year. At the gas pumps, prices are down to a national average of $2.20, the lowest average in over a decade. Hotel prices, however, are expected to rise by five percent, so consumers may want to stay with relatives or friends when traveling during Thanksgiving.
Comments

Mortgage Market News

Strength in the U.S. labor market rebounded in October to the fastest pace of the year, after weak numbers in August and September. The Labor Department reported that Non-farm Payrolls rose by 271,000 last month, which could push the Federal Reserve to raise interest rates in December. The 271,000 was well above the 181,000 expected, while August and September were revised higher by a total of 12,000.
Within the Jobs Report it showed that wage growth accelerated to the fastest year-over-year pace since 2009. The Unemployment Rate fell to 5% from 5.1%, the lowest level since April 2008, before the Great Recession began. Gains were seen in white collar businesses, health care, retailers and restaurants. The solid report signals that the world's largest economy is back on track. The so-called U6 number fell to 9.8%, the first time below 10% since May 2008. The U6 number are those people who can't find work or those with only part-time jobs.
The Mortgage Bankers Association (MBA) reported this week that mortgage credit availability continued to loosen in October, due in part to new conforming loan programs. The Mortgage Credit Availability Index rose 1.5% last month to 128.4, after an increase in September. A spoke person for the MBA said many of the new conforming loan programs were affordable housing programs, which have lower down payment requirements.
Comments

Mortgage Market News

CoreLogic reports that distressed sales, which include real estate owned properties and short sales, made up 9.3% of total home sales in August. That figure is down 2.3% from August 2014 and down 0.4% from July 2015. In addition, the 9.3% share is well below the peak of 32.4% set back at the height of the Great Recession in January 2009. Before the peak, distressed sales were about 2% on average.
Staffing firm Challenger, Gray & Christmas reports that U.S. companies showed overall layoffs fell 14% in October from September, though oil industry cuts jumped to a six-month high. Layoffs totaled 50,504 of which 14,000 of those layoffs were related to the oil industry. In the retail sector, layoff announcements are up 67% from 38,948 in 2014 to 64,983, as of last month. “Despite the surge in job cuts across several sectors, it is hardly time to panic. While falling oil prices are impacting the bottom lines of companies in the energy and industrial goods sectors, they are helping many other employers, such as those in transportation and plastics manufacturing,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Mortgage rates rose in the latest survey ahead of a possible interest hike in December. Freddie Mac reported on Thursday that the average 30-year fixed-rate conventional mortgage ($417,000 or less) rose. Mortgage rates continue to hover just above the all-time lows. To put it into perspective, since 1971, the highest rates were seen in October 1981 (18.45%) with a low (3.35%) seen at the end of 2012.
Comments

Mortgage Market News

Automated Data Processing (ADP) reported on Wednesday that private payrolls rose 182,000 in October versus the 180,000 expected, down from the 190,000 created in September. Economic growth somewhat cooled across the nation and new job creations have been decreasing since August. The lower numbers are due in part to slowing in the energy and manufacturing sector. The report comes ahead of Friday's government Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.
The service sector of the economy received positive news today after the Institute of Supply Management (ISM) reported that its ISM Service Index rose to 59.1 in October, near the highest levels in a decade that it reached in July. The 59.1 was better than the 56.6 expected. Within the report it showed that the new orders and the employment component's both saw positive gains. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates the non-manufacturing sector is generally contracting.
Fed Chair Janet Yellen was on Capitol Hill this morning testifying in front of the House Financial Services Committee on the health of U.S. banks. When asked about future interest rate policy, Ms. Yellen did say that a December interest rate hike is a "live possibility". However, Ms. Yeelen said no decision has been made yet and any hike would be dependent on incoming economic data. Ms. Yellen went on to say that the U.S. economy is performing well and some downside risks have diminished surrounding the global economy.
Comments

Mortgage Market News

Home price gains remained solid in September, due in part to tightening inventories of homes available on the market. CoreLogic reported that home prices, including distressed sales, rose 6.4% in September 2015 compared to September 2014. From August 2015 to September 2015, there was a 0.6% increase. CoreLogic is forecasting a 4.7% increase from September 2015 through September 2016. “The continued growth in home prices is welcome news for many homeowners but more markets are becoming overvalued. In the near term, this trend is likely to continue and pose evaluated risks to the housing economy,” said Anand Nallathambi, president and CEO of CoreLogic.
Government sponsored entity and mortgage finance company Freddie Mac swung to a loss of $475 million in the third quarter of 2015, compared with a profit of $2.08 billion in the same period last year. Freddie Mac said that the loss can be attributed towards fair value losses on derivatives used to hedge the company's interest rate risk. The loss was the first in four years. The company will not be making a dividend payment to the Treasury in December. Freddie Mac and Fannie Mae don't make loans, they buy up mortgages from lenders, wrap them into securities and provide guarantees to make investors whole if the loans default.
After going through rough times during the Great Recession, the auto industry is now on track for record sales in 2015, reported General Motors (GM) today. GM reported that October sales will come in around 18.2 million vehicles on an annualized basis, their highest level since 2001. At the height of the Great Recession, sales fell to 10.4 million per month. "October was a huge month for the industry, smashing expectations and continuing its hot streak," said Bill Fay, Toyota's U.S. general manager.
Comments

Mortgage Market News

Black Knight Financial Services reported on Monday that purchase originations in the second quarter of 2015 were 15% higher than the same quarter in 2014. The data shows that the uptick was driven by high-credit borrowers, or those with a credit score of 700 or above. Early figures show an increase of 11% in the third quarter from a year ago. In addition, 20% of purchase loans originated in the third quarter have gone to borrowers with credit scores below 700.
The October Jobs Report will be released this week on Friday morning where it is expected that U.S. employers added 181,000 new positions last month. The Unemployment Rate is expected to tick higher to 5.2% from 5.1%. The report will be closely watched by traders and investors around the globe to gauge if the world's largest economy can rebound from the low number of jobs created in August and September. From January through July, job growth averaged over 200,000 new jobs per month. October's report will be a key factor in the Federal Reserve's decision to raise its benchmark Federal Funds Interest Rate at its December meeting.
Gas prices at the pump continue to push lower across the nation as the summer driving season ended in September and demand for oil declines. The national average price for a regular gallon of gasoline is at $2.19, down from $2.29 a month ago and down from $2.98 a year ago. Oversupply of oil is also a key factor due to increased oil production here in the states and abroad. Gas prices hit an all time high of $4.11 back in July of 2008.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that its Market Composite Index, a measure of total mortgage application volume, surged by 11.8% in the latest week. The index plunged in the previous week, but rebounded led by a sharp rise in government volume. The refinance index rose 9%, while the purchase index soared by 16%.
The MBA also reported that the average contract interest rate for 30-year fixed rate mortgages with conforming loan balances ($417K or less) decreased to the lowest since May at 3.95%, from 3.99%, with points declining to 0.29 from 0.41. The MBA sees mortgage rates rising in 2016, but they should remain below 5%.
Rental prices for apartments surged in 2014 and there doesn't seem to be a pull back any time soon. Annual rental growth in September saw a 5.2% increase, the highest since July 2011 and the eighth consecutive month with gains at 5% or above. Apartment research firm Axiometrics said, "the eight months the rate has been above 5% is the longest period of strength we have seen. The last growth cycle was only four years, and this cycle is already five years long–with no sign of stopping.”
Comments

Mortgage Market News

Construction on new homes rose in September from August after declines in the two previous months. The Commerce Department reported that September Housing Starts rose 6.5% from August to an annual rate of 1.210 million units, above the 1.150 million expected. The report went on to reveal that single-family starts rose modestly, while there was a 17% increase in multi-family units. However, Building Permits, a sign of future construction, fell 5%.
The Mortgage Bankers Association (MBA) reported on Tuesday that it forecasts that purchase originations should increase by 10% in 2016 from 2015. However, the MBA sees refinance originations decreasing by one-third in the same time period. The MBA is forecasting purchase originations of $978 billion and refinance originations of $331 billion for a total of $1.31 trillion. "We are projecting that home purchase originations will increase in 2016 as the U.S. housing market continues on its path towards more typical levels of turnover based on steadily rising demand and improvements in the supply of homes for sale and under construction," said Michael Fratantoni, MBA's chief economist.
The National Retail Federation released its Holiday Consumer Spending Survey on Tuesday and expects the average spending per consumer this year will be $805.65, up slightly from 2014's $802.45. That figure is the highest in the surveys 14-year history and includes food, gifts, decorations and other items. In addition, online purchases will make up 46% of consumer buying, above 2014's 44.4%. Online retailer Amazon expects to hire 100,000 U.S. workers to handle holiday orders.
Comments

Mortgage Market News

The foreclosure segment of the housing market continued to receive positive news today. Analytics firm CoreLogic reported on Monday that completed foreclosures declined year-over-year from 46,000 in August 2014 to 36,000 in August 2015, a near 21% decrease. Completed foreclosures reflect the total number of homes lost to foreclosure. CoreLogic went on to say that the national foreclosure inventory declined by 25.2% from last year. On a month-over-month basis completed foreclosures were up 0.8% from July to August.
A recent study from LendingTree shows that American consumers are more likely to go out of their way to shop for the lowest gas prices than they are to look for the lowest possible mortgage rate. The study showed that 80% of consumers will drive around town for the cheapest gas prices, but only 14% said they would comparison shop when looking for a loan, whether it be personal, mortgage or auto loan. "Consumers are generally very savvy with their shopping behavior when it comes to day-to-day purchases and material goods. But, once it comes to a major financial investment, we see a collapse of the normally rational pattern of behavior and mentality for saving,” said Andrea Woroch, LendingTree’s consumer savings expert.
The holiday season is just around the corner, but this year the pendulum is swinging the other way when it comes to stores opening on Thanksgiving. In the past few years stores have been looking to cash in on holiday sales earlier and earlier and many went as far as opening on a big family day, Thanksgiving. However, in 2015 more and more stores are now saying they won't be open for the holiday and are recognizing that Thanksgiving is a time for family and friends. And where it may mean lower sales to begin the holidays, there are a few positives. Aside from employees being able to spend time at home on Thanksgiving, the stores that will not open could get a marketing boost by touting its focus on family values over profits. In addition, lower overhead by not staffing stores could offset some of the lost sales. Notables that will not be open include, Nordstrom, Marshalls and Staples along with a host of others.
Comments

Mortgage Market News

The recent market turmoil here in the U.S. coupled with a delayed hike in interest rates by the Federal Reserve have increased the chances of a recession in the world's largest economy. According to a recent survey in early October, the chances that the U.S. will fall into a recession in the next 12 months has jumped to 15%, the highest level since October 2013. The big global concern is China, as its red hot economy continues to cool.
The U.S. Energy Department reported this week that costs to heat your home this winter should be lower than the past two winters. The Department said that those using propane to warm their home will see a savings of $322 and those using heating oil will spend $459 less than last season. The forecast is based on warner weather for most of the country.
Mortgage giant and government sponsored entity Fannie Mae reported this week that its Home Purchase Sentiment Index rose to 83.8 in September. Consumer confidence in the home buying and selling market bounced back from a recent dip, suggesting continued gradual improvement in housing activity. The "Good Time to Sell" indicator rose 13 points in September, most likely due to a strong home price environment. The "Good Time to Buy" component increased 3 points as high rental costs may be encouraging more renters to consider homeownership.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that mortgage application volume soared in the latest week before a key regulation for the industry went into effect on October 3. The MBA's Market Composite Index, a measure of total loan application volume, surged 25.5% in the latest week. The purchase index soared 27%, while the refinance index surged 24%. The MBA went on to report that the 30-year fixed rate mortgage with conforming loan balances ($417,000 or less) fell to 3.99% from 4.08%, with points declining to 0.25 from 0.35.
Gas prices at the pumps continue to edge lower following the end of the summer driving season. Less demand and low oil prices are a few reasons behind the decline. The national average price for a regular gallon of gasoline is at $2.29, down from $2.39 a month and below the $3.27 recorded a year ago. Prices have moved lower 43 of the past 49 days on ample gasoline supplies. The national average price tends to move lower during the autumn and winter months due to seasonal declines in both driving and gasoline demand, and pump prices have fallen during the month of October for three years in a row.
Flu season is upon us and this year's flu shot is expected to be more effective than last season's. The season generally begins in October and continues through May. It is the time of year when you see more colleagues at work calling in sick and more children staying home from school. Doctors are advising to get your shot early, for it typically takes a few weeks for the body to build up immunity
Comments

Mortgage Market News

Home prices, including distressed sales, rose 6.9% in August 2015 from August 2014, due in part to higher demand along with constrained supplies, as reported by analytics firm CoreLogic. In addition, an improving job market, an uptick in wage growth and historically low mortgage rates are strengthening home sales and home price gains. July to August saw a 1.2% gain. CoreLogic forecasts that prices will rise 4.3% from August 2015 to August 2016.
The Mortgage Bankers Association (MBA) reported on Tuesday that mortgage credit availability increased marginally in September from August, due in part to Freddie Mac's affordable lending programs. The MBA's Mortgage Credit Availability Index (MCAI) gained 0.3% last month to 126.5. This comes after an uptick in August, after recovering in July, following a stall-out in June. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
"It's The Most Wonderful Time of the Year!" That popular holiday song by Andy Williams is a favorite of retailers across the nation as they usually make a big chunk of annual sales during the holiday shopping season, which starts around Thanksgiving and ends at the end of December. Due to an improving labor market, lower gas prices and an increase in home prices, holiday sales are expected to rise 4% this year. However, the increase this season may be smaller than last year as personal income growth was flat in the first quarter of this year.
Comments

Mortgage Market News

Black Knight Financial Services reported on Monday that cash -evels seen in 2005. Despite the big drop off in refinancing, Black Knight said that "borrowers have been capitalizing on the increased equity available to them." Black Knight went on to say that low mortgage rates have also been a factor in refinancing activity.
The Institute for Supply Management (ISM) said on Monday that the service sector of the U.S. economy expanded at a slower pace than expected in September, which be partly due to slowing economies overseas. The ISM Service Index (non-manufacturing) fell to 56.9 in September, down from the 59 recorded in August and below the 58 expected. A reading above 50% indicates the non-manufacturing sector of the economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting. The report covers restaurants, bars, builders, bankers, hotels and other service providers.
On the lighter side, U.S. consumers are expected to rack up nearly $7 billion in sales this coming Halloween. The National Retail Federation reports that consumers are expected to spend on goods ranging from ghosts to goblins to Batman and Superman along with decorations and candy. However, spending is expected to be lower with average spending coming out to $74.34 a person, down from $77.52 last year. Many consumers are expected to spend at discount stores, while 17% of Americans say they will purchase their Halloween paraphernalia online.
Comments

Mortgage Market News

The number of U.S. workers being fired across the nation remained near 10-year lows in the latest weekly survey as the labor markets continue to improve. The Labor Department reported that Weekly Initial Jobless Claims rose by 10,000 in the latest week to 277,000, above the 270,000 expected. Domestic demand for goods and services remain solid, which is one of the main reasons employers are retaining staff.
Manufacturing activity in the U.S. edged lower in September, though still expanding at a modest pace. Lower growth in the sector coupled with a stronger dollar and weak overseas demand are a few of the culprits behind the move lower. The Institute for Supply Management reported that its ISM Index fell to 50.2 in September, down from the 51.1 recorded in August and just below the 50.6 expected. Within the report it showed that the employment component also declined. Readings above 50 signal expansion, below 50, contraction.
The Bureau of Labor Statistics will report Non-farm Payrolls this Friday morning at 8:30 a.m. ET, where it is expected that employers added 205K jobs in September, after the 173K created in August. The Unemployment Rate is expected to remain at 5.1%. This month's report could be a key metric in the Fed's decision to move on interest rates either in October or December and it will be closely watched by investors around the globe.
Comments

Mortgage Market News

Home prices continued to rise in July due to the ongoing strength in the U.S. economy. The Case Shiller 20-city Index showed a 5% gain year-over-year, which was in line with expectations. The index has risen at a 4% or higher rate since September 2012. From June to July, prices rose 0.6%. “Prices of existing homes and housing overall are seeing strong growth and contributing to recent solid growth for the economy,” said spokesperson David Blitzer.
Consumers across the U.S. felt a bit more optimistic about the economy in September. The Conference Board reported that its Consumer Confidence Index rose to 103.0 in September, well above the 96.0 expected and up from 101.5 in August. Consumer appraisals of current conditions were more positive in September. Labor market conditions were mixed as those feeling that jobs are plentiful increased, while the feeling that "jobs are hard to get" also increased.
Analytics firm CoreLogic reported on Tuesday that cash sales made up 31% of total home sales in June, down from 34% in June 2014. The year-over-year decrease has taken place each month since January 2013. Back in January 2011, cash sales peaked at nearly 47% of total sales across the nation, while before the housing crisis in late 2007, cash sales were 25%.
Comments

Mortgage Market News

Inflation remained tame at the consumer level as evidenced by the Core Personal Consumption Expenditure (PCE). The Core PCE rose by 0.1% in August from July, due in part to falling gas prices. Meanwhile, year-over-year Core PCE grew by 1.3%, which is well below the Federal Reserve's target level of 2%. Low inflation levels could keep the Federal Reserve from raising interest rates this year and they could hold off a hike until next year.
Americans opened their wallets in August on goods ranging from back-to-school items to new autos, signaling the U.S. economy continues to grow. The Commerce Department reported Monday that Personal Spending rose 0.4% last month, above the 0.3% expected. In addition, Personal Incomes rose 0.3%, just below the 0.4% anticipated and have been steadily rising since April. Since spending outpaced incomes, the personal savings rate ticked down to 4.6% from 4.7%.
Over in the housing markets, Pending Home Sales in August unexpectedly declined by 1.4% as rising home prices keep buyers on the fence. The National Association of REALTORS® (NAR) said that despite the weak reading, sales are still up 6.1% from a year ago. The biggest decline was seen in the Northeast falling by 5.6%, the Midwest saw a 0.4% decrease, the South saw sales fall 2.2%, while the West registered a 1.8% gain. Pending Home Sales measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes.
Comments

Mortgage Market News

The Commerce Department reported Thursday that single-family home sales surged in August, while July’s numbers were also revised higher, signaling continued strength in the U.S. housing market. New Home Sales in August rose 5.7% from July to the highest rate since 2008 and are up nearly 22% since August 2014. Expectations were calling for 515,000 units in August. In addition, July’s numbers were revised to 522,000 from 507,000. The New Home Sales report shows the number of newly constructed homes with a committed sale during the month.
Dow component and heavy equipment maker Caterpillar reported Thursday that it will be cutting up to 5,000 jobs by the end of 2016 for cost cutting measures due to tough conditions in the energy sector. The company went on to say that layoffs could total 10,000 through 2018, while revenues could decline in 2016 for a record fourth straight year. In addition, Caterpillar will also offer a voluntary retirement enhancement program this year for qualifying workers.
RealtyTrac released its August 2015 Home Sales Report on Thursday revealing that single-family home and condo sales through August were on pace for an eight-year high nationwide and in 110 out of 204 (54%) metropolitan statistical areas with sufficient sales data. A total of near 2 million single-family homes and condos sold through August in 2015, up 5.4% from the beginning of the year, to the highest total for the first eight months of the year since 2007.
Comments

Mortgage Market News

A recent study showed that the number of homes losing value monthly tripled in the past year. The report went on to say that a majority of the homes are still gaining value, however, the national trend is lower. Weiss Residential Research CEO Allan Weiss said, “In this environment buyers and investors should be careful to avoid buying properties that are losing value by reviewing metro and zip code maps on Owners.com that show hyper-local trends in changing value."
Mortgage application volume rose in the latest week as rates continue to hover just above historical lows. The Mortgage Bankers Association (MBA) attributed the rise to significant rate volatility last week surrounding the Federal Open Market Committee meeting as rates edged lower. The MBA's Market Composite Index, a measure of total loan application volume, rose nearly 14%, while the refinance index surged nearly 18% and the purchase index saw a 9% increase.
The recent problems at Volkswagen surrounding the German car company's attempt to cheat on federal emission standards has cast a dark cloud over the entire car making industry across the globe. The National Highway Traffic Safety Administration now says it will question everything when it comes to self-certified testing at auto makers. As the lawsuits mount up at Volkswagen, most of the major companies have also endured harsh penalties. General Motors agreed to a $900 million settlement over faulty ignition switches linked to over 100 deaths, Fiat Chrysler coughed up $105 million for failing to live up to safety regulations, while Toyota paid a $1.2 billion fine to settle a criminal investigation.
Comments

How to save $3,000, one five at a time | Marketplace.org

How to save $3,000, one five at a time | Marketplace.org
Comments

Mortgage Market News

Housing news continues to stream in with mixed results as the sector deals with tightening inventories and rising prices. The Federal Housing Finance Agency reported on Tuesday that home prices were up 0.6% in July from June. In the year ended in July, prices were up nearly 6%. The survey is based on home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. The data comes after lower than expected results from Existing and New Home Sales in the past week. The index is 1.1% below its March 2007 peak and is roughly the same as the November 2006 index level.
A recent Harvard University study revealed that renters will continue to struggle for the next decade as an estimated 11% more households will fork over at least half of their incomes in rent in 2025. The study said that renters who pay more than half of their earnings in rent often need federal subsidies to find affordable places to live. One big factor for the recent uptick in renting was that many lost their homes during the Great Recession along with incomes declining. The report went on to say that if rents continue to grow faster than incomes, the number of households in hardship could rise as much as 25%.
U.S. Stock markets continue their roller coaster ride due to uncertainty surrounding the Federal Reserve's future interest rate hikes. Last week, the Federal Reserve held off from raising its benchmark Fed Funds Rate, which is currently at 0.00% - 0.25%. Markets hate uncertainty, and today's action sees the Dow Jones Industrial Average down well over 200 points. Yesterday, Atlanta Fed President Dennis Lockhart fueled the uncertainty flames when he said a rate hike later this year was still possible and that the Fed, in recent months, has added to the market instability and needs to refine its communication approach.
Comments

Mortgage Market News

The Commerce Department reported on Thursday that Housing Starts fell 3% in August from July to an annual pace of 1.126 million units, below the 1.158 million expected. Within the report it showed that multifamily units fell 3% in August after the 23% decline in July. This comes after multifamily starts were up nearly 40% in June and April. Housing Starts are up 7.5% since August 2014 and remain above a one-million pace for the fifth straight month, signaling that the sector has recovered a big portion of the losses sustained when the housing bubble imploded back in 2008. In addition, Building Permits, a sign of future construction, rose 3.5% to an annual rate of 1.170 million units, above the 1.158 million expected.
The price of renting in the U.S. rose in August for the 58th straight month and are up 3.6% so far this year. Rent prices have been on the rise due to a smaller amount of units available along with an increase in demand. The average rental is lowest in Arkansas at $760, to a high of $2,640 in New York. Just recently, the Census Department reported that home ownership rates fell to 63.4%, a 48-year low.
The Philadelphia Federal Reserve released its monthly manufacturing index showing negative readings on its top line index. The Philly Fed Index fell to negative 6.0 in September after a positive 8.3 reading in August and well below the +6.5 expected. It was the first negative reading since February 2014. Within the report it did show that the employment component rose 5 points to its highest level in five months while new orders showed growth.
Comments

Mortgage Market News

U.S. consumer spending grew in August. Retail sales increased 0.4 percent, excluding auto, gas, building materials and food. This follows July’s 0.6 percent increase and signals continued improvement in the economy. Overall, retail sales rose 0.2 percent. Strong auto sales were neutralized by a drop in sales at service stations which was fueled by lower gas prices.
The number of homes with negative equity also dropped in the second quarter. CoreLogic reported 91 percent of all mortgaged properties now have equity, after 759,000 properties regained equity in the second quarter. The total number of mortgaged residential properties with negative equity is now at 4.4 million, or 8.7 percent of all mortgaged properties, compared to 5.1 million homes, or 10.2 percent in the first quarter. The number of underwater homes has decreased year over year by 1.1 million, or 19.4 percent.
On the other side of the globe, the Shanghai Composite Index dropped for the second day in a row, marking its biggest two-day loss in three weeks. In a paper issued today, World Bank economists warn a Fed rate hike this week could further damage China and other emerging markets.
Comments

Mortgage Market News

U.S. Stocks opened lower this morning as investors await the Fed’s decision this week on whether or not to raise the benchmark Fed Funds Rate for the first time in nine years. While many believe the rate will increase before year’s end, growing skepticism is mounting that an increase will be announced in Thursday’s Monetary Policy Statement. Signs of sustained economic recovery remain mixed both here and abroad.
The Shanghai Composite Index fell 2.7 percent, the most in three weeks. Recent data continues to suggest the Chinese economy is weaker than expected. Lower industrial output as well as the slowest pace of investment since 2000 are among the latest data points.
In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stated it expects demand for its oil to increase 30.31 million barrels per day next year. Despite lower global demand, OPEC cited its strategy to let oil prices fall as a reason for a reduction in global surplus.
Comments

Mortgage Market News

Inflation at the wholesale level showed a mixed picture in August. The Producer Price Index was unchanged versus the -0.1% expected, mainly due to lower oil prices. But the Core Producer Price Index, which strips out food and energy costs, showed a beefy 0.3% rise, hotter than the 0.1% expected. Wholesale or producer inflation has not yet been passed down to the consumer, mainly due to lack of wage growth. If consumers are not being paid more, businesses can’t incrementally charge more for their goods and services.
Consumers were a bit downbeat about the U.S. economy in early September. The September Consumer Sentiment Index fell to 85.7 early this month, below the 91.9 recorded in August and below the 91.5 expected. The Index measures consumer attitudes towards the economy along with feelings on current economic conditions and futures prospects. Americans attitudes on current conditions and futures expectations hit their lowest level since late 2014.
Investment banking firm Goldman Sachs reported this morning that it sees oil prices plunging to near $20 in the next few years as a glut of oil flows through the pipes around the globe, while demand slips. Oil dropped to $44/barrel in current trading, which has pushed the price that we pay at the gas pumps down. The national average price for a regular gallon of gasoline is at $2.36, down from $2.57 a month ago. Most analysts feel that the national average price of gas could hit $2 in the coming months.
Comments

Mortgage Market News

The job market received some good news today as the number of job openings climbed to the highest level in 14 years in July. The Labor Department announced that its JOLTS (Job Openings and Labor Turnover Survey) showed that there were 5.75 million job openings in July coming from highly paid professional and business services to service sector jobs and retail trade. However, the labor market seems unable to fill many of the slots, which could eventually lead to an acceleration in wages, which have been stagnant over the past few years.
The Federal Reserve members will meet next week to discuss monetary policy and the direction of the short term Fed Funds Rate. The U.S. economy has been improving, with the expectations split between whether or not the rise in rates will come next week. However, the chief economist at the World Bank said yesterday that the Federal Reserve should wait until the global economy is on surer footing to avoid panic and turmoil in emerging markets. Early in September, Christine Lagarde from the International Monetary Fund said the Fed should not rush to raise rates this month.
Mortgage rates edged higher last week causing a decline in total mortgage loan application volume, reports the Mortgage Bankers Association (MBA). The MBA's Market Composite Index, a measure of total loan application volume, declined 6.2% in the latest week and comes after a big rise in volume in the previous week. The refinance index fell 10%, while the purchase index fell by 1%, which is 41% higher than the same week last year.
Comments

Mortgage Market News

Analytics firm CoreLogic reported on Tuesday that completed foreclosures were down nearly 25% in July from a year ago, led by job market gains and home price appreciation. Home prices were up 7% from a year ago, while the Unemployment Rate hit 5.1% in August, the lowest in seven years. There were 38,000 completed foreclosures in July, down from the 50,000 completed in July 2014, while foreclosures were down 6.2% compared to June 2015. "As we enter the final months of 2015, the housing markets continues to gather steam buoyed by improving economic conditions and the recent pent up demand for homeownership," said Anand Nallathambi, president and ceo of CoreLogic.
Small business optimism was little changed in August from July, reports the National Federation of Independent Business as the Index rose to 95.9 from 95.4. The slight increase was paced by job openings and earnings trends, as both components were up in August from July. A spokesperson said the small businesses were not influenced by the volatility in the Stocks markets, though the surveys were mostly done right before the gyrations sparked by slowing economic conditions in China.
A recent survey of mortgage lenders revealed that 2016 is expected to be a seller's market in housing, while a large portion feel that the market could cope with a possible interest rate hike this fall. Mortgage bankers are also looking ahead to 2016 for new innovations in banks' menus of mortgage products, continued home price gains along with lowering acceptable down payments amounts by 10%.
Comments

Mortgage Market News

The first of two key employment reports was released on Wednesday showing that private employers added fewer jobs than expected in August. ADP reported that private employers added 190,000 workers last month, below the 201,000 expected, while July was revised lower to 177,000 from 185,000. The report revealed that small businesses added 85,000 jobs, midsize, 66,000, and large companies, 40,000. Though below expectations, job growth has been steady and will be a key deciding factor for the Federal Reserve's decision on future interest rate hikes.
Worker productivity surged in the second quarter of 2015 and rose at the fastest pace since late 2013, though it has been running below more normal levels for the past year. Productivity rose by 3.3% in the second reading for the second quarter, above the 1.3% that was registered from the first reading and above the 2.8% expected. Within the report it showed that labor costs fell 1.4%, which signals that wages are not increasing, despite the fact that the Unemployment Rate has been declining.
Mortgage application volume soared in the latest week as home loan rates remained at their lowest level since late April. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 11.3% in the latest week. In addition, the refinance index soared 17%, while the purchase index was up 4%.
Comments

Mortgage Market News

This week's August Jobs Report could turn out to be one of the most highly anticipated data points this year by both investors and the Federal Reserve.
 
The Jobs Report could be a key deciding factor in the Fed's decision to raise rates in September or hold off until a later date.
 
A strong Jobs Report, coupled with the robust Gross Domestic Product numbers last week, could signal the time is right for a rate hike. On the other hand, a weak Jobs Report would signal it's time to wait.
Comments

Mortgage Market News

Investors around the globe will be eagerly awaiting the August Jobs Report, which is due to be released this Friday, September 4, at 9:30 a.m. ET. It is expected that employers added 217,000 new jobs during the month, down from the February high of 266,000. The Unemployment Rate is expected to fall to 5.2%, which would be the lowest level since April 2008. The jobs numbers will be one of the key deciding factors in the Federal Reserve's decision as to whether or not to raise the Fed Funds Rate, the country's benchmark interest rate,.in September,
The first of three key readings in the manufacturing sector was reported today showing that business activity in the Midwest region declined marginally in August, but still managed to show expansion. The Chicago PMI Index came in at 54.4, just shy of the 54.7 expected and down from the 54.7 recorded in July. Readings over 50 indicate expansion, below 50, contraction. The national ISM Manufacturing Index will be released on Tuesday.
Comments

Mortgage Market News

Economic growth in the U.S. surged in the second quarter led by rising business investments and consumer spending. The Bureau of Economic Analysis reported that the second reading for second quarter Gross Domestic Product (GDP) rose by 3.7%, above the first reading of 2.3% and well above the anemic 0.6% recorded in the first quarter. GDP measures the value of all goods produced in the U.S. The consumer spending component of GDP rose by 3.1% compared to the 1.8% registered in the first quarter.
The National Association of REALTORS® (NAR) reported on Thursday that July Pending Home Sales were mostly unchanged, but did see a modest rise for the sixth time in seven months. Pending Home Sales rose by 0.5% versus the 1% expected and the index has increased year-over-year for 11 consecutive months. Lawrence Yun, NAR chief economist, says the housing market began the second half of 2015 on a positive note, with pending sales slightly rising in July.
Mortgage rates edged lower this week led by turmoil in the Chinese Stock markets. The 30-year conforming fixed-rate mortgage fell.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that a recent study showed that housing demand will surge over the next ten years. The MBA feels that between 13.9 and 15.9 million households will be formed by 2023, making the next 10 years one of the strongest in housing in U.S. history. The MBA went on to say that the housing demand will be driven by Hispanics, Baby Boomers and Millennials.
Online real estate company Zillow reported on Wednesday that it sees the housing market slowing down a bit as home prices saw their first negative monthly change since the recovery four years ago. Zillow said that home prices declined 0.1% in July, falling to $179,900. On an annual basis, prices rose 3.0% from July 2014 to July 2015, down from 3.4% in the year ended in June. Of the 517 metro cities covered by Zillow, 204 saw a slowdown in prices and were back to more normal levels of appreciation.
With oil prices continuing to decline in world markets due to slowing demand and a surge in supply, prices at the gas pumps are falling. The national average price for a regular gallon of gasoline is at $2.55, down from $2.72 a month ago. Recently, gas prices have been slow to push lower with the big drop in oil and this is due to outages at several major refineries. Gas analyst Tom Kloza from the Oil Price Information Service sees prices below $2 per gallon by Thanksgiving. Mr. Kloza says that the summer driving season ends this month and with refineries able to refine oil into gas at less expensive prices for its winter blend, prices will begin declining.
Comments

Mortgage Market News

Housing news was abundant today showing positive gains for the sector. The Case Shiller 20-city Index rose 5% in the year ended in June, which was near expectations and matched the May reading. On a month-over-month basis, the index was down 0.1%. The big gains were seen in Denver (10.2%), San Francisco (9.5%) and Dallas (8.2%). The component that covers the entire nation was up 4.5% in the past 12 month.
The Commerce Department reported on Tuesday that New Home Sales in July rose 5.4% from June to an annual rate of 507,000 units. The increase of 5.4% comes after a 7.7% decline from May to June. Sales were up nearly 29% from July 2014, while the median price of a new home rose 2% from a year ago to $285,900. On the supply side, the inventory of New Homes for sale was up almost 2% to 218,000, the highest level since March 2010, though still less than half below of what it was at the height of the housing boom.
Consumer across the nation felt confident in August over the current state of the U.S. economy, which was fueled by an improving labor market. The Conference Board reported that its Consumer Confidence Index rose to 101.5 in August, the best reading since January and well above the 93.0 expected. In addition, it was the second highest reading since the Great Recession began in late 2007. “Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the labor market," said Lynn Franco, Director of economic indicators at the Conference Board.
Comments

Mortgage Market News

The National Association of REALTORS® (NAR) reported that Existing Home Sales in July were up 2% from June to an annual rate of 5.59 million units, the highest pace since February 2007. The 5.59 million was above the 5.42 million expected. Since July 2014, sales are up 10%. A spokesperson from the NAR said that tight inventories are driving prices up and that a more robust housing market could provide further support for the U.S. economy.
The Federal Reserve released the minutes from its July 29 meeting on Wednesday with a majority of the members saying the time is coming for interest rates to rise. "Most judged that the conditions for policy firming had not yet been achieved, but noted that conditions were approaching that point." Many analysts have been pointing towards a rate hike in September, but after the minutes were released, rates could rise later in the year and not next month.
Oil prices continue to edge lower this week, due to an over supply of oil around the globe. The price of West Texas Intermediate oil has fallen to $41/barrel, a six and a half year low. The drop in oil has lowered the price of gas at the pumps for most of the country. In parts of New Jersey, the price for a regular gallon of gasoline is at $2.07. The current national average price for a regular gallon of gas is at $2.66. Many gas analysts see the price of gas moving lower to a national average of $2 sometime in late fall.
Comments

Mortagge Market News

The National Association of REALTORS® (NAR) reported that Existing Home Sales in July were up 2% from June to an annual rate of 5.59 million units, the highest pace since February 2007. The 5.59 million was above the 5.42 million expected. Since July 2014, sales are up 10%. A spokesperson from the NAR said that tight inventories are driving prices up and that a more robust housing market could provide further support for the U.S. economy.
The Federal Reserve released the minutes from its July 29 meeting on Wednesday with a majority of the members saying the time is coming for interest rates to rise. "Most judged that the conditions for policy firming had not yet been achieved, but noted that conditions were approaching that point." Many analysts have been pointing towards a rate hike in September, but after the minutes were released, rates could rise later in the year and not next month.
Oil prices continue to edge lower this week, due to an over supply of oil around the globe. The price of West Texas Intermediate oil has fallen to $41/barrel, a six and a half year low. The drop in oil has lowered the price of gas at the pumps for most of the country. In parts of New Jersey, the price for a regular gallon of gasoline is at $2.07. The current national average price for a regular gallon of gas is at $2.66. Many gas analysts see the price of gas moving lower to a national average of $2 sometime in late fall.
Comments

Mortgage Market News

Inflation at the consumer level remained tame in July as rising housing costs were offset by by little changes in most other consumer goods. The Bureau of Labor Statistics reported on Wednesday that the inflation reading Consumer Price Index rose 0.1% in July, below the 0.2% expected and down from the 0.3% registered in June. It was the smallest increase in six months. Shelter costs rose 0.4%, the biggest gain in more than eight years, while year-over-year housing costs are up 3.1%, the largest annual increase since 2008.
Mortgage application volume rose in the latest week as interest rates to purchase and refinance remained near historic lows. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of total loan application volume, rose 3.6% in the latest week. Within the numbers it showed that the refinance index was up 7%, while the purchase index gained 0.1%. The MBA also reported that the average contract rate for a 30-year fixed rate mortgage with conforming loan balances ($417,000 or less) decreased to 4.11% with points increasing to 0.37.
Breakfast may be getting more expensive in the coming months as egg prices soar at supermarkets. Due to the worst avian flu outbreak in 30 years there is limited supply which has caused egg prices to spike this year, and prices will continue to rise. The current price for a dozen of eggs are at a range between $1.99 to $4.49 and could hit $6 per dozen by the fall. So don't be surprised by the higher price of a bacon, egg and cheese at your local breakfast spot in the coming months either.
Comments

Mortgage Market News

Job openings across the nation edged lower in June, though current levels still suggest that demand for workers remains robust. The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) revealed that job openings totaled 5.25 million in June, down from the 5.36 million in May. The job openings rate for June 2015 remained at 3.6% for the third month in a row. Job openings have jumped 11% in the past year, a sign that companies feel that demand for goods and services will pick up.
The International Energy Agency reported its monthly data on oil showing that global demand is growing at its fastest pace in five years, as economic growth continues and consumers respond to lower oil prices. However, global oversupply through 2016 as a glut of oil is flowing through pipes around the world's largest producers. Oil prices have fallen below $50 per barrel, due to the oversupply and a strong dollar. As oil moves lower, prices at the pump are expected to move back to near $2 per gallon on average by December.
The recent move by China to devalue their currency has left global Stock markets in a panic feeling that the world's second largest economy is beginning to slow. The fallout here in the U.S. has pushed the closely watched S&P 500 Stock Index into negative territory for the year, after having plunged for two straight days. The U.S. Stock markets have been on a blistering pace higher since hitting multi-year lows back in March of 2009, which was the height of the Great Recession. The index hit 666 on March 9, 2009, and recently hit an all-time closing high of 2,130 back in May.
Comments

Mortgage Market News

Analytics firm CoreLogic reported on Tuesday that there were 43,000 completed foreclosures in June, down nearly 15% from the 50,000 in June 2014. In comparison, before the decline in the housing market in 2007, completed foreclosures were running at 21,000 per month on average from 2000 to 2006. On a month-over-month basis, completed foreclosures were up 4.8%. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. A CoreLogic spokesperson said, "the foreclosure rate has dropped to its lowest level since 2007, supported by a decline in loans made in 2009, gains in employment and higher housing prices."
Small business owners' confidence rebounded in July, after the sharp decline in June. The National Federation of Independent Business's Small Business Optimism Index increased 1.3 points to 95.4. The report revealed that seven of the ten subindexes increased in July. Within the report it showed that the job-creation index gained three points, though there were no indications of a second half liftoff for the amount of jobs created. In addition, the profits trend index decreased further as owners reported lower profits during the month.
The National Association of REALTORS® (NAR) reported that median home prices rose in 93% of 176 metropolitan areas in the second quarter of 2015. The big rise comes after the 85% rise recorded in the first quarter for those 176 metro areas. Insufficient supply was a key factor in the gains. Lawrence Yun, NAR chief economist, says the housing market has shifted into a higher gear in recent months. "Steady rent increases, the slow rise in mortgage rates and stronger local job markets fueled demand throughout most of the country this spring,"
Comments

Mortagge Market News

The big talk on Wall Street continues to be whether or not the Federal Reserve will begin to raise the short term Fed Funds Rate sometime in the fall. Most economists feel that a rate hike will come in September, but Federal Reserve Vice Chairman Stanley Fischer put some doubts on that happening next month. Mr. Fisher said today that the interesting situation is that employment has been rising pretty fast, but inflation continues to run very low. Mr. Fischer does not want to see a raise in rates until we can see inflation return to more normal levels.
After falling for the last seven business days, Stock prices are rallying today on a series of bullish headlines. Warren Buffet's Berkshire Hathaway has agreed to purchase Precision Castparts, a U.S. aircraft parts maker for $37.2B. Additionally, Mr. Buffet made bullish comments on shares of IBM. Overseas, Chinese producer prices fell, conjuring up notions that its central bank may evoke additional stimulus measures. It was also reported that Greek banks may be getting capital infusions in the next few weeks.
With a glut of oil running through global pipelines and demand a bit low, prices have been falling since spring. The price of West Texas Intermediate (WTI) has fallen to $44/barrel from the $62 seen in the beginning of May. The recent decline in oil has sent the national average price for a regular gallon of gasoline at the pumps to $2.59, down from $2.75 in early May. AAA says that gas prices could drop even further if oil continues to fall and we could see another run towards $2 per gallon by the end of the year.
Comments

Mortgage Market News

The highly anticipated July Jobs Report was released with little fanfare on Friday as the numbers came in close to expectations. The Bureau of Labor Statistics reported that July Non-farm Payrolls came in at 215,000, below the 229,000 expected, while the May and June numbers were revised higher by a total of 13,000. Job creation has been steady in 2015, though it has been running below last year's numbers up until this point in time. Within the Jobs Report it showed that the Unemployment Rate remained at 5.3%, while wage growth edged higher.
The report bolsters the case for a September interest rate hike from the Federal Reserve due to an improving economy along with an uptick in wage growth. The Federal Reserve members will meet in mid-September to discuss monetary policy and decide if the economy is healthy enough to usher in the first interest rate hike since 2008. With the Fed Funds Rate at or near zero at the current time, the path of least resistance will be higher. The timing will be in focus … will it be next month, October or December? Most analysts are looking for a September rate hike. The Fed Funds Rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight.
Comments

Mortgage Market News

The labor market suffered a minor setback today after headlines read that private employers added less jobs than was expected in July. Payroll service firm ADP reported that private employers added 185,000 jobs in July, below the 220,000 expected and down from the 229,000 created in June, which was revised lower from 237,000. And though job growth has been strong, it has been moderating since the beginning of the year, noted Mark Zandi, chief economist at Moody's Analytics Inc. The ADP report comes ahead of Friday's government Jobs Report where it is expected that 220,000 were created in both the private and public sector.
The Institute for Supply Management (ISM) reported that its ISM Service Index (non-manufacturing) jumped to 60.3 in July, up from the June reading of 56 and above the 56.3 expected. The 60.3 was the best reading in 10 years. All of the components within the index showed strong gains with new orders and employment the standouts. Most respondents continue to have a positive outlook on business conditions and the overall economy. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates it is generally contracting.
Home loan rates edged lower in the latest survey from the Mortgage Bankers Association (MBA) falling in the previous week with .034 points on top of the rate. The recent rise in Bond prices was the catalyst behind the push lower in rates, as mortgage rates are generally tied to the ebb and flow of Bond market fluctuations. Within the data it also showed that the MBA's Market Composite Index, a measure of total loan application volume, jumped 4.7%, while the refinance index was up 6%, purchase index gained 3.3%.
Comments

Mortgage Market News

Home prices across the nation jumped in June due to pent-up demand and affordability, along with a more robust labor market. CoreLogic reported on Tuesday that home prices, including distressed sales, rose 6.5% from June 2014 through June 2015, the 40th consecutive month of year-over-year price gains. May to June saw a 1.7% increase. Prices are down 7.4% from the peak seen back in April 2006. Looking ahead, prices are expected to increase 0.5% from June to July and 4.2% from June 2015 to June 2016.
The Federal Reserve released its July 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices yesterday revealing that banks reported having eased lending standards for a number of categories of residential loans over the past three months. Most banks reported no change in standards and terms on consumer loans. Banks also reported stronger demand for home-purchase loans, while they also saw greater demand for auto and credit card loans.
Freddie Mac reported a profit of $4.2 billion in the second quarter of 2015 citing big gains in its loan guarantee and investment portfolio. The $4.2 billion is up a whopping 700% from the first quarter and allows the government controlled mortgage finance company the ability to cut a check for $3.9 billion to the U.S. Treasury. Both Freddie Mac and Fannie Mae were bailed out by the government when the housing bubble burst back in 2008 and have since been required to sweep profits to the Treasury under terms of the bailout.
Comments

Mortgage Market News

Americans across the nation eased up on spending for goods and services in June as wage growth continues to be a bit of a drag on the economy. Personal Spending, which measures money spent on everything from bagels to refrigerators, rose 0.2% in June from May, the smallest monthly gain since February. The 0.2% is well below the 0.7% recorded in May and just below the 0.3% expected.
Inflation continues to run below the Federal Reserve's target levels of near 2% as the economy continues to grow at a slow pace in 2015. Core Personal Consumption Expenditures (PCE), which measures price changes in consumer goods and services, rose by 1.3% year-over-year in the month ended in June. Inflation remains subdued and has remained well below the Federal Reserve's aforementioned target level of 2% for the 38th straight month. Low inflation has been mainly due to a sluggish U.S. economy, lower oil prices along with weak global economies.
Lower oil prices continued to drag on energy related industries in July as reported by the Institute of Supply Management (ISM). The ISM Manufacturing Index for July fell to 52.7 from the June reading of 53.5 and below the 53.7 expected. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. Several of the components within the report declined, such as the employment index, which showed that employment levels declined from June, while new orders also decreased.
Comments

Mortgage Market News




Will the new mortgage disclosures delay my closing?

The answer is NO for just about everybody.

When the Know Before You Owe mortgage disclosure rule becomes effective, lenders must give you new, easier-to-use disclosures about your loan three business days before closing. This gives you time to review the terms of the deal before you get to the closing table.


Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing. The new rule allows for ordinary changes that do not alter the basic terms of the deal.

Only THREE changes require a new 3–day review:




  1. The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans.1 A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
  2. A prepayment penalty is added, making it expensive to refinance or sell.
  3. The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.




 

1 Lenders have been required to provide a 3-day review for these changes in APR since 2009.







NO OTHER changes require a new 3–day review:



There has been much misinformation and mistaken commentary around this point. Any other changes in the days leading up to closing do not require a new 3-day review, although the lender will still have to provide an updated disclosure.

For example, the following circumstances do not require a new 3-day review:

  1. Unexpected discoveries on a walk-through such as a broken refrigerator or a missing stove, even if they require seller credits to the buyer.
  2. Most changes to payments made at closing, including the amount of the real estate commission, taxes and utilities proration, and the amount paid into escrow.
  3. Typos found at the closing table.


Comments

Mortgage Market Rates

U.S. economic growth rebounded in the second quarter of this year, led by a rise in consumer spending along with an increase in exports. The Bureau of Labor Statistics reported that Gross Domestic Product, the total value of goods and services produced in the U.S., rose by 2.3%. This was well above the anemic 0.6% recorded in the first quarter, which was revised from -0.2%. On the negative side, business spending declined during the quarter, led lower by decreased spending on buildings and plants, while inventories also fell. In addition, the report revealed that inflation remained subdued.
The Federal Reserve released its monetary policy statement yesterday leaving interest rates unchanged, which left investors scratching their heads as to the timing of the first rate hike. The statement read that that both the labor market and the housing sector were improving, while inflation continues to run below its long-run objective. There was no hint as to when the first rate hike may take place. The interest rate in question is the short-term Fed Funds Rate, which is the rate banks lend their balances to other banks overnight. The Fed Funds Rate has been at 0.25% since late 2008.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported today that total mortgage application volume was little changed in the latest week, while mortgage rates ticked lower. The MBA said its Market Composite Index, a measure of total loan application volume, rose 0.8% for the week ended July 24, 2015. The refinance index rose 2%, while the purchase index was unchanged. The MBA went to say that the average contract rate for 30-year fixed rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.17% from 4.23%.
A rise in home prices is beginning to push potential buyers to the sidelines. The National Association of REALTORS® (NAR) reported that Pending Home Sales (signed contracts to purchase existing homes) fell 1.8% in June from May. This was below the +1% expected. The NAR also said limited is constraining sales as "low inventories in many markets reduced choices and pushed prices above some buyers' comfort level."
United Parcel Service (UPS) reported earnings this week; the shipping company is considered by many to be a barometer of the U.S. economy. UPS is the biggest member of the Dow transports, which economists feel to have a good pulse of the economy. UPS said it sees the U.S. economy slowing, which is somewhat contradictory of what Fed Chair Janet Yellen a few weeks ago when she said that she sees the economy strengthening in the second half of 2015. The big reason that shipping companies may have their finger on the pulse of the economy is because they are the middle men between what goods are produced, and for what people consume
Comments

Mortgage Market News

Consumers weren't feeling too confident in July as the weight of the geo-political issues in Greece and the instability in the Chinese Stock markets weighed on their minds. The Conference Board released its July Consumer Confidence Index today, which fell to 90.9, a 10-month low, down from the 101.4 registered in June and below the 100 expected. Consumers were also less optimistic surrounding the labor markets, while business condition optimism declined. The Conference Board is a global, independent business membership and research association working in the public interest.
Home price gains in a selected 20-city index remained solid in May, though the actual numbers fell a bit below what was estimated. The Case Shiller 20-city Home Price Index rose 4.9% from May 2014 through May 2015, though below the 5.6% gain expected. From April to May, prices rose 1.1%. Within the report it revealed that first time homebuyers are still sitting on the sidelines. Without those buyers, there is less activity as existing homeowners aren't seeing the liquidity and demand that supports selling their homes and trading up for a new purchase.
The U.S. Census Bureau reported today that the U.S. homeownership rate fell to 63.4% in the second quarter of 2015 as Americans have moved to rentals after the fallout from the housing bubble burst in 2008. The 63.4% is just below the 63.7% in the first quarter and below the 64.7% from the same period in 2014. Rates peaked at 69.2% at the end of 2004, during the housing boom. In comparison, multifamily dwelling construction surged 55% in June from June of 2014, while in the same period, single-family starts rose 15%.
Comments

Mortgage Market News

Black Knight Financial Services reported today that its Home Price Index in May rose 1.1% from April as the housing sector continues to gradually improve. The current price was pegged at $251,000, which is 5.1% higher than May 2014 and is up 25% from the market bottom. The price peak came in June of 2006 at $268,000. Black Knight tracks prices as of their transaction dates every month from more than 18,500 U.S. zip codes. New York led the gains in May with a 1.8% appreciation month-over-month.
Oil prices continue to edge lower due to an uptick in supplies and lower demand around the globe. The price of West Texas Intermediate fell to $47.20 a barrel on Monday morning, down from $62 in late June. The decline in oil prices has led gas prices at the pump lower in the last month, after having increased from the early 2015 lows. The national average price for a regular gallon of gasoline fell to $2.71, down six cents in the past month. It is forecasted that gas prices will continue to edge lower as summer gives way to fall.
U.S. Stock markets begin the week on a lower note after a big decline in the Chinese Stock markets. China's Shanghai Composite fell 8.5% overnight and is down nearly 30% since the June highs. The China market had been up 150% in June before the recent slide, which was deemed to overvalued or in bubble territory. Stock prices here in the U.S. fell last week as the Federal Reserve gears up to begin raising interest this year. This week, Fed members will meet to discuss monetary policy with the meeting centering on as to the timing of rate hikes later this year.
Comments

Mortgage Market News

U.S. housing starts in June rose 9.8 percent to 1.17 million, the second-highest level since November 2007. The demand for apartments fueled the surge, following a 16.9 percent decrease the previous month and a 37.5 percent rise in April. Single-family home starts declined throughout the country, with the largest drop in the Northeast at 27.3 percent. Building permits also reached an eight-year high.
The Consumer Price Index rose 0.3 percent last month after increasing 0.4 percent in May. In the 12 months through June, the Core Consumer Price Index (sans food and energy costs) rose 1.8 percent after May's 1.7 percent increase. This inflation measure is still below the Fed’s target 2 percent. Price increases hit gasoline, rent, recreation, personal care, tobacco, airfare and food (most notably eggs at 18.3 percent — the biggest gain since 1973 due to an egg shortage caused by bird flu).
A Greek tragedy has been averted as the EU approved a bridge loan of 7.16 billion euros ($7.76 billion) for Greece. The loan saves Greece from defaulting on payments due to the European Central Bank and International Monetary Fund. It further buys time as terms of a third bailout are finalized.
Comments

Mortgage Marketing News

Investors seem to be putting positive stock in Greece’s bailout proposals. All signs this morning point to trading on the uptick. Standard & Poor’s 500 Index climbed 1 percent to 2,072.62 at 9:32 a.m. in New York, after closing yesterday down 1.2 percent this week. Dow kicked off with a 200-point rally led by Visa and JP Morgan. NASDAQ is up too. While the week could end on a positive note after wild swings, news headlines on the weekend could usher in an exciting Monday.
U.S. wholesale inventories rose at their fastest pace in six months, according to today’s release from the Commerce Department. Wholesale inventories increased 0.8 percent from a month earlier, more than forecast. Petroleum products, computer equipment and drugs saw the biggest gains. Inventories are a key component of gross domestic product changes.
Yesterday, the American Bankers Association released new data pointing to a healing housing market. Fewer Americans are falling behind on their home-equity loans. In fact, delinquency rates on fixed-term home equity loans fell to 3.12% in the first quarter, the lowest since 2008. The delinquency rate on home-equity lines of credit declined to 1.42% from 1.48% in the fourth quarter.
Comments

Mortgage Market News

Fannie Mae released its June 2015 National Housing Survey this week stating that consumer attitudes on housing may signal a healthier purchase market ahead. The survey said that those who believe now is a good time to sell a home reached a new survey high as the mark crossed above the 50% threshold for the first time in the survey's history. The positive results are due in part to an improving job market and income growth.
The International Monetary Fund (IMF) for the second time this year has warned the U.S. Federal Reserve to hold off on any potential interest rate hikes until 2016. The IMF cites the Greek saga, the slowing Chinese economy, the continued strength of the U.S. dollar, as well as still-depressed demand for housing despite a recovery. In addition, slower growth around the globe is another key factor to hold off on rate hikes.
Comments

Mortgage Market News

Black Knight Financial Services reported on Monday that between traditional and HARP programs, 6.5 million Americans could likely both qualify and benefit from refinancing in the coming months. The current refinance opportunities could result in savings of up to $500 each month at today's rates. Black Knight said that three million borrowers could save at least $200 per month. However, if rates go up a half percentage point, 2.6 million people will fall out of that refinanceable population.
The Institute for Supply Management released its ISM Service Index revealing that the sector remained steady in June as the economy continues to modestly improve. The ISM Index rose to 56.0 in June, up from the 55.7 recorded in May, though just below the 56.3 expected. Most of the components within the report saw gains, with the exception of the employment component, which fell to 52.7 from 55.3. In last week's June Jobs Report the numbers said that a large portion of the 223,000 jobs created were through private service companies.
This past holiday weekend drivers saw the lowest prices for gas at the pumps since 2009. The national average price for a regular gallon of gas is at $2.77. AAA spokesman Mark Jenkins said that gas prices peaked for the year in June hitting an average of $2.80. Prices averaged $2.45 in the first half of the year, which is the cheapest average for the first six months since 2009. AAA went on to say that the average price is likely to remain below $3 this year.
Comments

Mortgage Market News

The Bureau of Labor Statistics reported on Thursday that U.S. employers added 223,000 new workers in June, just below the 230,000 expected as the job markets continues to steadily improve. Hiring’s were widespread in June, with the exception of the energy sector, due to the decline in oil prices. Within the report it also showed that the Unemployment Rate fell to 5.3%, the lowest level since May 2008. However, the April and May numbers were reduced by 60,000, signaling that although the sector is improving, it is still not robust nearly seven years into a recovery.
Mortgage rates hit 2015 highs this week headed into the holiday weekend, though just slightly higher than the previous week. Freddie Mac reported that the 30-year conforming mortgage rate ($417,000 or less) hit 4.08% this week with 0.6 in points and fees. The 4.08% is up from 4.02% last, though down from 4.12% last year this time. Looking at mortgage rates from a historical perspective, rates are near the all-time lows of the mid 3% mark, well below the near 17% seen back in 1981.
On the lighter side, with the 4th of July upon us, some fun facts to offer at your holiday barbecue this weekend. It is said that the real day of independence is July 2, for that's when Congress accepted Jefferson's declaration. Thomas Jefferson drafted the Declaration of Independence on a "laptop", which was a writing desk that could fit on ones lap. Only two men signed the Declaration of Independence on July 4th 1776 - John Hancock and Charles Thompson. Congress declared July 4th as an official holiday in 1870 as part of a bill to officially recognize other holidays, Christmas being one of them. And last, July 4th is the "biggest hot dog holiday of the year," according to TIME magazine, with Americans reportedly consuming about 155 million of them on Independence Day alone.
Comments

Mortgage Market News

The first of two key employment reports was released this morning showing that private employers added more jobs than expected as the sector continues to improve. ADP Private Payrolls rose by 237,000 in June, above the 220,000 expected and up from the 203,000 jobs created in May. Within the data it revealed that small businesses added 120,000 jobs, mid-sized companies added 86,000, while large ones added 32,000. The report comes ahead of Thursday's government jobs report. A noted economist said after the ADP release that "the U.S. job machine remains in high gear."
Home loan rates hit a nine-month high in the latest week as an improving economy has pushed the price of the underlying Bonds that dictate home loan rates to 2015 lows. The rise in home loan rates pushed mortgage application volumes considerably lower in the latest survey. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, decreased 4.7% for the week ending June 26, 2015. In addition, the refinance index fell 5%, while the purchase index decreased 4%. The average contract for a conforming 30-year fixed-rate mortgage ($417,000 or less) rose to 4.46% with 0.33 in points.
The granddaddy of all economic reports (Non-farm payrolls) will be released on Thursday morning and will surely garner attention around the globe. The government's Non-farm Payrolls report is expected to show that employers added 220,000 jobs in both the private and public sector in June. The 220,000 would be down from the 280,000 created in May, but the number could be greater or less than what is anticipated. Non-farm payrolls is a statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding, general government employees, private household employees, employees of nonprofit organizations and farm employees.
Comments

Mortgage Market News

The crisis surrounding Greece and its creditors may be getting kicked down the road as a possible extension may be struck to avert the troubled country from defaulting on debt payments. Greece has until Tuesday, June 30 to reach a deal to make a $1.7 billion payment to the International Monetary Fund. Rumors are swirling that if no agreement is reached, a form of bridge financing may be granted that will extend Greece a few more months. The sides will be meeting in Brussels on Saturday to avert a default by Greece.
Consumer Sentiment rose to its highest level since January in the final reading in June, signaling that spending will continue to bolster the U.S. economy. The University of Michigan's Consumer Sentiment Index rose to 96.1 for June, from the 90.7 recorded in May. Within the data, consumer optimism hit its highest level in June and improved at the fastest pace since 2004. In addition, consumer spending shows growth of 3% in 2015. Recent economic data in May has been on the positive side, which is fueling the optimistic tone for U.S. consumers.
The recent talk of home buying for millennials has taken center stage in the housing market world. A recent report from Realtor.com revealed that millennials are now looking seriously into purchasing their first homes and are set to gain market share in the second half of the year. Realtor.com said a metric is showing that in mid-June, 65% of 25 to 34-year-olds intend to purchase a home within the next three months, up from 54% in January. The millennial sector is large and can be just what is needed to bolster the housing market.
Comments

Mortgage Market News

Consumers across the nation spent their hard earned dollars on cars and trucks in May, while they paid more for gas at the pumps. The Commerce Department reported on Thursday that Personal Spending surged by 0.9% in May, the fastest pace in six years and above the 0.7% expected. A key reason behind the upswing in spending comes as the job market continues to improve, while wages have edged higher. Personal Incomes rose by 0.5% in the last two months, fueling the solid spending in May.
A disturbing report surfaced this week ... Americans throw out $165 billion worth of food each year. A recent report shows that 76% of Americans say that at least once a month leftovers go right into the garbage and not in the refrigerator. Of that 76%, 70% report being bothered that they waste that much food. The report broke it down to reveal that individual households waste $640 in food every year. One big reason that so much food is wasted is because many consumers misinterpret expiration dates. There are 160 billion pounds of food thrown away each year in the U.S. alone, which puts food waste as the single largest contributor of solid waste in landfills.
Motor club AAA reported on Thursday that the upcoming July 4th holiday will see an estimated 41.9 million Americans traveling over the holiday weekend. The 4th falls on a Saturday this year, which will extend the weekend, since many are off that Friday. It is further estimated that 85% of the near 42 million that say they will travel, will drive by car to the destinations. The good news this year is that filling up the car at the gas pumps will be the cheapest in five years. The national average price for a regular gallon of gasoline is at $2.78, 88 cents less than last year
Comments

Mortgage Market News

The Bureau of Economic Analysis reported on Wednesday that the final reading for first quarter Gross Domestic Product (GDP) showed that economic growth contracted by 0.2%, though less severe from the -0.7% from the second reading. In addition, the negative reading for the quarter was the fifth time in the six-year recovery that the economy couldn't’t produce at least an anemic reading of 1%. Growth in the first quarter was stunted by a negative trade balance due to the stronger dollar, harsh weather and the West Coast port closing.
Government sponsored entity Freddie Mac released its U.S. Economic and Housing Market Outlook for June showing that with low debt servicing costs and improving household balance sheets, more Americans may be at a point where they are ready to start taking on more mortgage debt. Freddie Mac said that this is yet another sign the economy and housing markets are moving to more normal levels. However, Freddie Mac is now forecasting that Gross Domestic Product for all of 2015 will come in at 2.0%, down from the original forecast of 2.3%.
The latest Existing Home Sales data for May showed that first time home buyers made up 32% of sales, the largest share since September 2012. There are a few factors for the rise ... the government is trying to lower mortgage costs for first time buyers and for other borrowers with less than stellar credit ratings. In addition, down payment requirements are easing a bit, which opens up the pool of would be buyers. However, the recent rise in home prices have curtailed some buyers as the rise is outweighing the increase in wages.
Comments

Mortgage Market News

Housing news continues to be on the positive side this week as the sector continues to improve. The Commerce Department reported that May New Home Sales rose 2.2% from April to an annual rate of 546,000, the fastest pace in seven years. Economists were expecting sales to rise to 525,000, while April was revised to 534,000 from 517,000. The May rate is up nearly 20% from the same period last year. Within the report it showed that the median price declined by 1% from last year to $282,000.
Getting a new job "ain't" what it used to be as far as how much time it takes from the initial interview until the time you are seated at your new desk. The interview process took up to 23 days in 2014, up from nearly 13 days five years ago. Companies are looking for more than the right person for the right job, they are also looking for loyalty traits. Candidates who have the right character to fit in with the company culture also goes a long way.
The cost of renting continues to edge higher across the country due to financial pressures and a still rather pessimistic view on the housing sector. Rents have risen 4.3% in May from a year ago and are rising at double digit rates in Denver, San Francisco and San Jose, California as increased job opportunities lure in Americans, a faster pace than construction can match. The rise in rentals is also weighing on what would-be buyers can save for a down payment to purchase a home. This is exacerbated by cities with a higher amount of both technology and financial related jobs. For instance, a one bedroom apartment in New York City averaged $3,521 last month.
Comments

Mortgage Market News

The National Association of REALTORS® reported on Monday that May Existing Home Sales rose 5.1% from April to an annualized rate of 5.35 million units, the highest pace in nearly six years. The biggest gains were seen in the Northeast, while all major regions experienced sales increases in May. The gains were due in part by an increase in the share of sales to first time home buyers. "Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers," said Lawrence Yun, NAR chief economist.
Home sales in May revved up as reported by the RE/MAX National Housing Report. Completed transactions rose by nearly 9% in May from April's level and 3.5% higher than May 2014. Across the nation, 38 of the 53 metro areas tracked by RE/MAX reported higher sales year-over-year, with 11 reported as double digit increases. Reasons cited for the positive numbers include both job growth and slowly wages, rents are quickly increasing, while mortgages are becoming more accessible.
According to a recent report released by the Economic Policy Institute, chief executive officer (CEOs) made 303 times as much as the average worker in 2014. CEO salaries for the largest firms on average rose to $16.3 million in 2014, up nearly 4% from last year and up a whopping 55% since the end of the Great Recession in 2009. Within the report it showed that since 1978, inflation adjusted CEO pay soared 997%, while the average worker saw an 11% increase in the same time period.
Comments

Mortgage Market News

The Greek tragedy continues as no deal has been reached for another lifeline, as the country inches closer to a default. The European Central Bank has raised emergency funds of $3.7 billion (3.3 billion euros) after there were large withdrawals this past week at Greek banks. There was also a rumor that the banks may not open for business on Monday, but that rumor has been denied. Withdrawals from banks hit 1 billion euros on Thursday.
Home builder KB Home reported on Friday that the company reported earnings that beat both revenue and earnings expectations due in part to positive momentum being generated across its business. The builder said that at the end of the second quarter there were higher backlogs in each of its four regions of the country compared to last year. KB Home said it had net income of $9.6 million or 10 cents oer share in the quarter, better than the 8 cents expected. The company expects "measurable" growth in revenue and deliveries in the second half of 2015.
A recent survey shows that 66% of Americans across the country have seen an increase in their commuting costs, spending $2,600 annually to get to and from work. The highest costs were seen in Los Angeles, at $16, with Chicago and San Francisco the lowest at $11 per day. But it doesn't end just in the wallet, as the average worker spends 200 hours commuting each year. The longest commute is seen by New Yorkers at an average of 73 minutes, with Chicago second at 64 minutes per day.
Comments

Mortgage Market News

Fannie Mae released its second quarter 2015 Mortgage Lender Sentiment Survey with the main thrust being that lenders are feeling more positive on purchase demand, profit margins and credit standards. The report went on to reveal that lenders' near term outlook for both purchase and profit margins are at high levels, and above the 2014 results. In addition, more lenders feel that credit is loosening a bit rather than tightening.
Homeowners who owe more than their home is worth received some good news today as analytics firm CoreLogic reported that the underwater mortgage share was down to 10.2% in the first quarter of 2015. More than 254,000 properties regained positive equity in the first three months of this year. Negative equity, often referred to as "underwater" or "upside down," refers to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
The Mortgage Bankers Association (MBA) said today that mortgage rates increased again in the latest week, hitting highs for 2015. The MBA said that the 30-year rate mortgage with conforming loan balances of $417,000 or less, increased.Though mortgage rates have been edging higher, historically, they are still near the lower end of the range dating back to 1971, when Freddie Mac began tracking rates.
Comments

Mortgage Market News

Housing news was mixed this morning as the Commerce Department reported that construction on new homes fell 11.1% from April, reversing the large gain seen in April from March. Housing Starts fell to a seasonally adjusted rate of 1.04 million units, below the 1.10 million expected, while April Housing Starts were revised up to 1.17 million units, which was near an eight year high. The Northeast took the biggest hit down nearly 27%.Within the report it showed that single-family housing starts fell by 5.4%.
The housing data did have a bright spot, Building Permits, a sign of future construction, rose by 11.8% in May to an annual rate of 1.275 million, above the 1.10 million expected. The 1.275 million is the highest level since 2007. Permits for single-family homes rose by 2.6%, while multi-dwelling permits surged 26%, the most since January 1990.
Gas prices at the pump continue to edge higher as the national average price for a regular gallon hit $2.80 in the latest survey. That is up from $2.69 a month ago, though below the $3.66 seen a year ago. But those prices are expected to decline by the end of the year. The U.S. Energy Information Administration is forecasting that the price will decline to as low as $2.27 per gallon in December and also expects the average price to be $2.60 for June through August. For all of 2015, prices will average near $2.43, the lowest since 2009.
Comments

Mortgage Market News

The National Association of Home Builders reported on Monday that its Housing Market Index for newly built, single family homes rose by five points in June to 59, the best level since September 2014. Within the report it showed that current sales conditions, sales expectations and the component that measures buying traffic all increased in June. “Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods.
The first of three key manufacturing reports was released this morning showing that the conditions in June declined and this was the second negative reading in the past three months. The June New York State Manufacturing Index fell by 2%, below the 6.0 expected and down from the 3.1 registered in May. Future conditions also slipped as optimism fell for a second consecutive month, while labor market conditions showed a slight increase.
A recent poll conducted by data firm Reuters revealed that those polled feel that an interest rate hike will take place in September, after near zero percent interest rates for the past decade. The results showed that the recent robust May jobs report and the much better than expected Retail Sales data are key reasons to usher in a rate hike in early fall. The Federal Reserve cut its benchmark Fed Funds Rate to near zero in December 2008, a level that still stands today.
Comments

Mortgage Market News

Consumer sentiment rebounded in early June, surpassing the final May reading as expectations for higher wages lifted confidence. The early June Consumer Sentiment report increased to 94.6 from the 90.7 registered in May. Back in January the index hit an 11-year high of 98.1. “The June gain was due to the most favorable personal financial prospects since 2007, with households expecting the largest wage gains since 2008,” said Richard Curtin, chief economist at Michigan’s Survey of Consumers that compiles the sentiment index.
The regularly scheduled Federal Open Market Committee meeting will kick off on Tuesday, June 16 in Washington D.C. where Fed members meet to discuss the economic environment in the U.S. and monetary policy. The big topic that will be at the forefront is the timing of when the short term interest rate, the Fed Funds Rate, will begin to increase after being near zero since the beginning of 2009. As the economy continues to improve, zero percent rates have no where to go but higher. The job market has improved considerably since the end of the Great Recession in late 2009, while the housing market and overall economy have gained strength.
Comments

Mortgage Market News

Consumers across the country opened their wallets in May and spent in a big way at their local retailers on purchases of automobiles and a range of other products, boosting hope that the U.S. economy will continue to gather some steam. Retail Sales rose by 1.2% in May, near in line with estimates and a big jump from the 0.2% recorded in April. Retail Sales measures total receipts of retail stores from samples representing all sizes and kinds of businesses in retail trade throughout the nation. The report is a key gauge of consumer spending, which makes up nearly two-thirds on economic output in the U.S.
In the housing sector, analytics firm CoreLogic reported that cash sales now make up nearly 35% of total home sales, down 2.8% in March from February. In March 2014, cash sales made up 39% of total sales, while the peak was hit back in January 2011 when cash sales were 47%. In the period before the housing crisis began in 2008, the average hovered near the 25% level. CoreLogic now forecasts that if cash sales continue to decline, the average of 25% could be achieved by mid-2016.
The recent spate of near positive economic data has pushed home loan rates way above the 4% level, reports Freddie Mac.
Comments

Mortgage Market News

Job openings across the nation surged in April as the labor market continues to improve. The Bureau of Labor Statistics reported that its JOLTS report (Job Openings and Labor Turnover Survey) rose to the highest since its inception in 2000. Job openings totaled 5.38 million in April from the 5.11 million in March. From April 2014 to April 2015, job openings are up 22% with big gains seen in both the private and public sector.
The National Federation of Independent Business (NFIB) reported on Tuesday that its small business optimism index rose in May with owners feeling more confident regarding their economic environment. The index rose by 1.4 points to 98.3, the highest level since December, but still below the 99.5 average that was achieved through 2007. The index was established in 1973 with the average hovering near the 98.0 level.
British banking giant HSBC has reported that it will undergo a major overhaul cutting up to 50,000 jobs around the globe. The bank will also sell several underperforming units and reduce the size of its global investment banking business with an aim to shed billions of dollars in costs. The announced job cuts comes after the bank cut 37,000 jobs from 2011 to 2014. Back in April, HSBC also said that it will formally review whether or not to move its headquarters away from Britain, given the tough regulatory environment and high tax base for banks in that country.
Comments

Mortgage Market News

The National Association for Business Economics (NABE) reported on Monday that the U.S. economy is now expected to expand at a slower pace in 2015, compared to the original projections in March. Sluggish growth in the first quarter of this year is spilling over into the second quarter, which has dampened the outlook for 2015. The think tank now expects Gross Domestic Product to rise by 2.4% this year, down from the 3.1% forecasted in March.
The NABE panel does see some positives going forward into the second half as consumer spending, residential investment, and government expenditures are all expected to increase at a faster pace in both 2015 and 2016. In addition, nearly 75% of panel members see the first hike in interest rates by the Federal Reserve in the third quarter of this year. Founded in 1959, the National Association for Business Economics is the professional association for those who use economics in their work. NABE has over 2,600 members and 42 chapters nationwide.
Credit card debt in the U.S. spiked in April, signaling that Americans have picked up their spending habits after a slowdown during the first quarter, which could have been weather related. Consumer debt rose by $20.54 billion in April, or at a 7.33% annual rate, as reported by the Federal Reserve. Estimates were looking for a rise of $16 billion. However, borrowing for cars and education rose at the slowest pace since July 2012. Consumer spending accounts for more than two-thirds of economic output in the U.S. and as Americans decrease spending, growth typically slows.
Comments

Mortgage Market News

Employers across the nation planned fewer job cuts in May than in April as energy sector layoffs eased. Outplacement firm Challenger, Gray & Christmas reported that companies across the nation laid off 33% fewer workers in May than in April. Since the year began, there have been 242,830 pink slip handed out. Just recently, JPMorgan Chase said it will be laying off 5,000 workers.
The International Monetary Fund (IMF) chief, Christine Lagarde, said on Thursday that due to low inflation and wage growth, the U.S. Federal Reserve should delay any rate hikes until the first half of 2016. The IMF went on to say that "long term unemployment, subdued participation, and high levels of part-time work point to remaining employment slack." As far as economic growth, the IMF said that the weaker growth in the first few months of 2015 will unavoidably pull down 2015 growth.
Gas prices at the pumps continue to rise as oil prices have jumped from the early 2015 lows. The average price for a regular gallon of gasoline is at $2.79, up from $2.62 a month ago. Since late January, prices at the pump is 71 cents higher and increase 26 out of 31 days in May. In addition, refineries conduct maintenance in the spring to prepare for the busy production of gasoline during the busy summer driving season. With June now on the calendar, prices could begin to decline as refineries complete maintenance.
Comments

Mortgage Market News

Private employers added more workers in May than April as moderate job growth continues. Payroll processor ADP reported that the private sector added 201,000 jobs in May, which was in line with estimates and up from the 169,000 recorded in April. Mark Zandi, chief economist of Moody’s Analytics, said, “The job market posted a solid gain in May. Employment growth remains near the average of the past couple of years. At the current pace of job growth the economy will be back to full employment by this time next year."
Over in the service sector of the economy, the Institute for Supply Management reported that its ISM Service Index grew at a slower rate of 55.7 in May, below the 57.8 recorded in April and below the 57.1 expected. Readings above 50 show expansion, below 50, contraction. The 55.7 is the lowest level since April 2014. Economic data has been mixed in the past few months showing an economy that is somewhat improving, but not a pace that would be considered normal in a post-recession economy.
At the height of the spring buying season, mortgage applications continued to decline in the latest week as home loan rates have edged higher in the past month. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of total mortgage loan application volume, fell by 7.6% in the latest week. The refinance index fell 12%, while the purchase index was down 3%. The MBA also reported that the 30-year fixed rate mortgage with conforming balances ($417,000 or less), is 4.05% with 0.33 points.
Comments

Mortgage Market News

Home prices across the nation rose on an annual basis in April led by old fashioned supply and demand, low mortgage rates, and improving finances and confidence. The CoreLogic Home Price Index, which includes distressed sales, rose 6.8% from April 2014 through April 2015. It was the 38th consecutive year-over-year increase in home prices nationally. However, prices are still 9% lower from the peak hit back in April 2006. The spring buying season is typically the strongest time of the year for housing.
Federal Reserve Governor Lael Brainard spoke in Washington this morning and said that recent slowing economic data raises concerns of a weaker than expected economy. Ms. Brainard cites the reasons, which include: a stronger dollar (which makes U.S. imports more expensive around the globe), weakness in Europe and China, along with a drop in oil prices that have decreased energy investments. In addition, recent data does not suggest a significant second quarter bounce and that the strong dollar delays rate normalization.
The highly anticipated May Jobs Report will be released this Friday, June 5. Expectations are that employers added 225,000 new workers last month. The question will be whether or not robust hiring will keep up after solid numbers in April of 233,000, compared with only 85,000 jobs created in March. The Labor Department's Bureau of Labor Statistics will release the report Friday morning at 8:30 a.m. ET.
Comments

Mortgage Market News

U.S. construction spending surged in April to an annual rate of $1 trillion, up 2.2% from March, and a near six and a half year high. The 2.2% rise was the largest monthly percentage increase since May 2012 and was better than the 0.8% increase expected. The gains were led by a jump in private construction to the tune of 1.8%. Public construction also saw big gains soaring 3.3%. Strong support from construction could lead to a more solid economy as the year progresses.
Inflation remained tame in April from March and also remained subdued on a year-over-year basis. The Federal Reserve's favorite inflation gauge, the Core PCE, rose by a scant 0.1% in April, below the 0.2% expected. From April 2014 to April 2015, the Core PCE rose by 1.2%. The Federal Reserve wants to see inflation trend to near its 2% mark annually. Core PCE measures prices paid by consumers for goods and services, which excludes volatile food and energy prices.
Consumer spending in April was flat as Americans channeled incomes into savings accounts. The Commerce Department reported on Monday that Personal Spending was unchanged in April, which was below the 0.2% expected and down from the 0.5% recorded in March. Personal Incomes rose by a healthy 0.4%, and with spending flat the savings rate rose by 5.6%, the second highest level since December 2012.
Comments

Mortgage Market News

U.S. economic growth in the first quarter of this year fell into negative territory, due in part to the West coast port strike, harsh winter weather, along with a widening trade deficit. The Bureau of Economic Analysis reported on Friday that the second estimate for Gross Domestic Product (GDP) fell by 0.7% in the first quarter, below the 0.2% that was originally reported. Current incoming data suggests a pick up in economic growth in the second quarter, but the number remains near the anemic 1% mark. GDP measures the value of the production of goods and services.
A report out on consumers' assessments of the U.S. economy soured in May and fell to the lowest level in 2015. Consumer Sentiment declined to 90.7 in May, below the 95.9 in April after hitting the highest level since 2004 back in January of 98.1. Slow wage growth, along with many Americans working part time have put a crimp in Americans attitudes towards the U.S. economy. Stagnant wage growth leads to reluctance in consumer spending in addition to holding off on purchasing homes.
The New York Federal Reserve Bank released its 2015 Housing Survey this week revealing that U.S. households, on average, expect home price growth to continue at a 4.4% pace over the next year. The survey also showed that respondents expect home loan rates to increase in coming years, but at a moderate rate. In addition, renters report that they would rather own than rent if they had the financial resources. Many renters feel that a mortgage would be hard to obtain, although responses suggest a slight easing in perceived credit access.
Comments

Mortgage Market News

Housing market news continues to stream in with favorable numbers this week after solid data from the Case-Shiller Home Price Index and New Home Sales earlier in the week. The National Association of REALTORS® (NAR) reported on Thursday that Pending Home Sales in April rose by 3.4%, led by the Northeast and Midwest, while all regions saw gains. The index now stands at 112.4, up 14% from April 2014 and at the highest level since May 2006 (112.5). A spokesperson from the NAR said that foot traffic remains elevated, despite limited inventory shortages in many metro areas.
The solid housing data has driven home loan rates to new highs for 2015, though still just above historically low levels. The 30-year fixed conventional home loan rate ($417,000 or less) rose to 3.87% with 0.6 in points and fees, according to Freddie Mac. A report released today by realtor.com said that delaying a home purchase this year could cost you more money in the future. The report said that interest rates and home prices are expected to climb in the next year.
Americans filing for first time unemployment benefits continue to hover near multi-year lows in the latest week as the job market continues to improve. Weekly Initial Jobless Claims rose by 7,000 in the latest week to 282,000, above the 274,000 expected. Claims have now remained below the 300,000 level for 12 straight weeks, which is a long period of time given the economic woes in the first quarter of the year. Within the report it showed that there are 2.2 million people receiving benefits after an initial week.
Comments

Mortgage Market News

Luxury home builder Toll Brothers reported a better than expected quarterly profit due in part to a lower tax provision coupled with a pick up in business in California. Toll Brothers is forecasting an increase in housing demand with the improvement in the job market and an uptick in wages. The company reported net earnings per share of 37 versus the 35 cents expected on profits of $67.9 million, while total revenues edged lower by 1% to $852.6 million. Toll Brothers operates primarily in major metropolitan areas in the contiguous United States.
In yet another gauge on home prices, the Federal Housing Finance Agency (FHFA) reported on Monday that home prices rose 1.3% in first quarter of this year. The gain was the fifteenth consecutive quarterly price increase in the purchase only index. From February to March, prices were up 0.3%. The FHFA's Home Price Index is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. Over the past 12 months from the first quarter of 2014 to the first quarter of 2015, the index was up 5%.
The U.S. Internal Revenue Service reported on Tuesday that a crime syndicate hacked into the IRS website and stole vital personal financial information of 104,000 taxpayers. The IRS website features a service called "Get Transcript", where you can easily download several years of tax forms ---this is where the thieves obtained the information. The crooks then used the data to claim tax refunds in other people's names. But the IRS said that the information could be used for far more devious acts than just receiving the illegal returns ... the fraudsters can open up bank accounts, credit lines and steal tax refunds in the future.
Comments

Mortgage Market News

The warmer temperatures in April helped home builders break new ground on housing units, with levels not seen in nearly eight years. The Commerce Department reported that Housing Starts surged by 20% in April from March to an annual rate of 1.14 million, which was also the biggest percentage gain in more than 24 years. The recent increase in the job markets, a strengthening in the economy, coupled with an uptick in home equity has led consumers to shed concerns and consider purchasing a new home.
The world's largest retailer, Wal-Mart, reported that higher wages and a stronger dollar pushed corporate earnings short of expectations in its latest quarterly report. Wal-Mart reported net income of $3.34 billion and earnings of $1.03, just below the $1.05 expected and well below the $1.11 from the year ago period. The company has been under pressure to raise worker pay and benefits and has announced that it will raise the minimum wage to $9 per hour this year and $10 in 2016. This change has and will impact the bottom line, but with $3.34 billion in net income in the latest quarter, no one is shedding a tear for the retailer.
At a recent conference on the outlook of the housing economy at the Mortgage Bankers Association's (MBA) National Secondary Market Conference, attendees from Fannie Mae, Freddie Mac and the MBA predicted that the U.S. Federal Reserve will begin to raise the Fed Funds Rate some time this year. The rise will most likely take place in September, after weak economic data in the first quarter of this year pushed the time frame further out from the original target of June. The one caveat from the prediction ... the refinance share of mortgage applications will likely fall.
Comments

Mortgage Market News

Home Builder Sentiment across the nation eased a bit in May, though builders still remain optimistic. Consumers have expressed some concerns regarding their financial conditions and would like to be on more stable ground before purchasing a home. The National Association of Home Builders Housing Market Index fell two points in May to 54, below the 57 expected. The index is up nine points since the May 2014 reading of 45. Any number over 50 indicates that more builders view conditions as good rather than poor.
Gas prices at the pumps continue to rise as the spring and summer driving season is now underway. Prices have risen by 22 cents in the past three weeks as the national average price for a regular gallon of gasoline is now up to $2.80 as of Sunday. The increase has been due to a rise in oil prices and stronger demand. The survey from Lundberg said that prices are still 93 cents lower than a year ago. The highest prices were seen in Los Angeles, CA at $3.95, while Baton Rouge, LA had the lowest at $2.32.
A recent report out from Airlines for America reveled that summer airline travel is estimated to reach an all-time high this season due to a strengthening economy. It is estimated that nearly 22 million passengers will fly on U.S. airlines this summer, up nearly 5% from last year. The favored destinations: Canada, Mexico and the United Kingdom. The uptick in demand coupled with lower fuel costs will greatly add to the bottom lines of U.S. airlines companies.
Comments

Mortgage Market News

U.S. economic data continues to stream in with mixed numbers, despite five years into a post recession period. The May Consumer Sentiment Index fell to 88.6 for the first of two readings this month and fell by the most in more than two years. Expectations were calling for a number of 96.0. A spokesman from the index said that the "decline was widespread among all age and income subgroups as well as all regions of the country." Consumer Sentiment measures the overall health of the economy as determined by consumer opinion.
Manufacturing data from the New York State region came in weaker than expected in May though still improved slightly for New York manufacturers. The Empire State Index came in at 3.1, below the 4.5 that was expected. Within the report it showed that the employment component had a slight increase, while the future employment index fell by six points. The future general business conditions fell noticeably.
Comments

Mortgage Market News

Consumers pulled back on spending for autos and other big ticket items in April as the windfall from lower gasoline prices was tucked away in savings accounts. Stagnant wages coupled with not-so-good prospects on the economy were a few reasons for the ease in spending. Retail Sales in April were unchanged, which was below the 0.2% gain expected. When stripping out autos, sales were up just 0.1% versus the 0.4% estimated. Furthermore, after the harsh winter weather around most of the country, sales were expected to start blossoming in spring, but that hasn't panned out yet.
A recent study by the Urban Land Institute showed that those surveyed in the 19 to 36 age group, or millennials, are renting now more than they were five years ago, but most still have aspirations of owning a home in the near future. Millennials, those born in the 1980s and 1990s, are now the largest consumer segment since the Baby Boomers, estimated at 75 to 80 million and account for a quarter of the U.S. population. The millennial generation has encountered more hurdles than previous generations on the road to home ownership including strict qualifications for mortgages, a mountain of student debt, along with stagnant wage growth.
The recent rise in home loan rates and a decline in the inventory of homes have put a crimp in mortgage applications recently. The Mortgage Bankers Association reported on Wednesday that its Market Composite Index, a measure of total loan application volume, fell 3.5% in the latest and that follows a 4.6% drop in the previous week. The refinance index fell by 6%, while the share of refinance activity fell to 51%, the lowest since May 2014. The purchase index was essentially unchanged and worrisome as the spring buying season is now well underway.
Comments

Mortgage Market News

The Bureau of Labor Statistics reported today the on the last day of March, there were 4.994 million job openings across the nation, down from 5.1 million in February, according to its Job Opening and Labor Turnover Survey (JOLTS) data. Within the report it also showed that voluntary quits rose to 2.8 million from 2.7 million in February as workers are more likely to quit their job due to the greater ease of finding something different. The report tracks millions of Americans each month who are laid off, quit or start on new job each month.
The National Federation of Independent Business (NFIB) reports that small business sentiment rose to 96.9 in April after a difficult March, but below the 98 posted in February. However, there was not an especially large gain in any of the components, except for an improvement in profit trends. In addition, small business owners are still somewhat cautious over future sales. “Overall, the Index remains steady, but it is still a few points below the average and is showing no tendency to break out into a stronger pattern of economic growth," said Bill Dunkelberg, NFIB Chief Economist.
The highest dollar amount paid for a painting took place yesterday in New York's Christies when Pablo Picasso's "Les Femmes d'Algers (Women of Algiers) sold for a record $179 million to an anonymous buyer. The bidding for the 1955 painting began at $100 million as Christies received over 30 bids in increments of $1 million. The painting last sold for $31.9 million back in 1997. Owning works of art has truly become a hard asset, along with real estate or rare cars.
Comments

Mortgage Market News

U.S. companies across the nation announced fewer planned layoffs in December than in November as the labor markets continue to improve. Outplacement firm Challenger, Gray & Christmas reported on Thursday that planned layoffs were down 9% from November, while planned cuts in 2014 were at the lowest levels since 1997. Challenger said, "This bodes well for job seekers, who will not only find more employment opportunities in 2015, but will enjoy increased job security once they are in those new positions."
Due to the recent rise in home prices, American households that were underwater in their mortgages in the third quarter of 2014 was 21% lower compared to the same period in 2013. CoreLogic reported on Thursday that there were 5.1 million mortgages underwater in the third quarter of 2014, well below the 6.5 million recorded in 2013. As home prices rise and the housing markets improve, home buyers will see it easier to sell their existing properties. In addition, rising home values make it easier to refinance current mortgages.
The Labor Department reported on Thursday that Americans filing for first time unemployment benefits fell by 4,000 in the latest week to 294,000, further evidence of an improving job market. The four-week moving average of claims, which irons out seasonal abnormalities, fell marginally to 290,500 last week. The latest figures are well below the near 700,000 seen in early 2009 at the height of the Great Recession.
Comments

LOWER FHA MI

The White House announced Wednesday that the Federal Housing Administration will significantly lower the fees it charges borrowers, a move that could save home buyers hundreds of dollars annually and help jump-start the housing market.

The “annual premiums” on FHA loans, an especially popular source of financing for first-time home buyers, have increased five times since 2010. They jumped from .55 percent of a loan’s value to 1.35 percent today. Those fees, which are tacked onto the monthly mortgage payment, will drop to .85 percent at the end of the month.  The White House projects the lower fees will entice 250,000 buyers to take out FHA loans in the next three years, and that the new borrowers will save an average of $900 annually.

President Obama plans to outline this plan Thursday when he delivers a speech in Phoenix about the housing market, which has been struggling to fully recover in part because mortgage costs are high and access to credit remains tight for many Americans.http://members.platinumpromarketing.com/preview_web.php?area=build&action=view&printformat=pdf&username=sledesma2&previewid=251&categoryid=27&platinum=27&hideoptout=y&social=0&hideloaninfo=1
Comments

Mortgage Market News

The jobs sector of the U.S. economy continued to deliver solid numbers as 2014 came to an end. Payroll processor ADP reported that private employers added 241,000 new workers in December, above the 230,000 expected, while the November numbers were revised higher to 227,000 from 208,000. The gains were led by professional and business services. The ADP report comes ahead of the government's labor report, which is due out Friday morning, where it is expected that private and public employers may have added 245,000 jobs last year.
In a disturbing survey put out by BankRate.com, many Americans are just one paycheck away from being out on the street. The survey showed that 62% of Americans have no emergency savings if a $500 car repair pops up or if they encounter a $1,000 emergency room visit. In addition, only 39% of respondents reported having a rainy day fund to cover three months of expenses. There was some positive feedback from the survey as it found that 82% of Americans keep a household budget, up from 60% in 2012.
Despite the low home loan interest rate environment, mortgage applications fell in the past two weeks, though the drop off is typical during the holiday season. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, fell by 9.1% in the previous two weeks for the week ending January 2. The data also showed that the refinance index decreased 12% from two weeks ago, while the purchase index decreased 5% Mortgage rates continue to hover near historic lows aided in part by the stimulus programs enacted by the U.S. Federal Reserve.
Comments

Mortgage Market News

Home price gains across the U.S. are well off the gains seen in early 2014 as prices come back down to more normal levels. CoreLogic reported that its Home Price Index, including distressed sales, rose by 5.5% in the year ended in November, just above the 5.4% annual gain recorded annually in October. After a near 12% annual increase back in January 2014, prices have been decelerating, but have stabilized to a more normal 5% - 6% growth rate for the last four months.
The service sector of the U.S. economy slowed a bit in December, falling to a six-month low due to weaker new orders and business activity. The Institute for Supply Management's Service Index fell to 56.2% last month, down from the 59.3% recorded in November and below the 58.5% expected. Readings above 50 signal expansion and the index has been above the expansion level for 59 consecutive months. The big decline came from business activity, which fell 7.2% to 57.2%. The Employment Index decreased modestly from the November reading and indicates growth for the tenth consecutive month. The service sector is made up of companies that primarily earn revenues through intangible products and services.
Severe and bitter cold weather is blasting the eastern half of the U.S. challenging to break records and to keep people indoors. Accu-weather has forecasted that its RealFeel temperatures will be 15-30 degrees lower than the actual temperatures at times. The temperatures dropped below freezing in New York on Monday and will most likely not get above the freezing mark until late this upcoming weekend. But it is January, so it is not a real big surprise. Let us know if it hits 30 degrees in July in New York. That will be news.
Comments

Mortgage Market News

Oil prices continue to decline due to a glut of supply along with weakening demand from overseas. A barrel of oil has fallen to near $52, down from the 2014 high of near $107 hit back in July. The decline has led gas prices at the pump to 5-year lows. The national average price for a regular gallon of gasoline is at $2.23, down from $2.76 a month ago and down from the $3.32 recorded last year this time. AAA estimates that Americans saved about $14 billion in 2014 compared to 2013, based on monthly prices and consumption. In addition, U.S. households saved an average of about $115 on gasoline in 2014 compared to 2013 with most of the savings coming in the last few months of 2014.
The first economic report of 2015 came in below expectations. The December ISM Manufacturing Index fell to 55.5 last month, down from the 58.7 recorded in November and below the 57.5 expected. It was the fastest pace in six months led lower by declines in orders and production. Any reading above 50 signals expansion. The December reading of 55.5 was the lowest since June, but still close to the monthly average for 2014.
The price of beef will continue to increase in 2015 after the big price gains seen in 2014. The price for beef and veal rose by 11% to 12% last year and are expected to rise by another 5% in 2015, as beef becomes almost a luxury item for many Americans. Here's an astonishing point...beef prices will be 90% higher in 2015 than they were in 2009 as the days of going to the grocery store for a few steaks becomes few and far between.
Comments

HUD PMI Act Information

HUD PMI Act Information
Comments

Mortgage Market News

Plunging gas prices at the pump led consumer prices lower in November, as reported by the Bureau of Labor Statistics. The November Consumer Price Index (CPI) fell by 0.3% when economists were looking for a decline of 0.1%. The -0.3% was the largest monthly drop in six years. The price of gas fell 6.6% in November, the most since 2008 with the current national average price for a regular gallon of gas at $2.50. On a year-over-year basis, CPI fell to 1.3% signaling that inflation pressures are subdued.
Big news out of Washington, D.C. today were headlines that the U.S. may be easing the embargo of Cuba that began in 1961. The U.S. will also look to open an embassy on the island of 13 million Cuban people. The news comes after Cuba released American citizen Alan Gross, who has been held in prison in Cuba for the last five years, as he was accused of espionage for trying to bring Internet services to Jewish communities in Cuba. However, Cuba would have to pay back $5 billion to the U.S. due to the illegal seizure of American businesses in the late 1950s.
On the lighter side, Toys "R" Us announced it will extend its operating hours for 39 straight hours from 6 a.m. Tuesday, December 23, through 9 p.m. on Christmas Eve. Just last week, Kohl's said that it will keep its 1,100 stores open around the clock for five days leading up to Christmas. Retailers are pulling out all the stops to increase sales this season as they look to make the most out of holiday sales.
Comments

Mortgage Market News

Hoping to broaden the pool of home buyers and boost the real estate market, Fannie Mae and Freddie Mac are launching mortgage programs with down payments as low as 3%.
The move, targeting buyers with good credit but little cash, has drawn fire for encouraging the kind of risky lending that caused the mortgage meltdown and financial crisis. But Fannie and Freddie executives said the programs contain proper safeguards.
The loans, unveiled Monday, reverse a trend of tighter lending standards by the government-sponsored mortgage giants since their taxpayer-financed bailouts. The programs allow only fixed-rate loans on single-family homes used as a primary residence.
Comments

Mortgage Market News

Private job creation in November declined from the October levels to the slowest pace in three months, but did manage 200+ gains in September, October and November. The ADP Private payroll report showed that 208,000 jobs were created last month, below the 225,000 expected and down from the 233,000 created in October, which was revised from 230,000. A robust jobs market usually leads to a more upbeat economy as Americans feel more secure about their own job situation, which could lead to an uptick in consumer spending.
The service sector of the U.S. economy received a shot in the arm today after the Institute of Supply Management (ISM) reported that its service Index rose to its 3rd highest level in the history of the Index. The ISM Service Index rose to 59.3% in November, above the 57.5% expected and up from the 57.1% recorded in October. Readings above 50 signals expansion and it has grown 58 consecutive months. However, all was not rosy within the report. The employment component decreased by 2.9% to 56.7% and down from the October reading of 59.6%. Comments from the majority of respondents indicate that business conditions are on track for continued growth.
Declining gas prices had U.S. consumers lining up at auto dealerships in a big way in November, plus the prospect of $2 gas, increased spending, and the move to larger models made last month the best for auto sales in 11 years. U.S. auto sales rose by 4.6% in November from October with the annual selling rate at 17.2 million vehicles, the best for November since 2003. A Nissan Motor executive said that when gas prices drop below $3, sales increase. Cadillac Escalade sales were up 91% last month, Lincoln Navigator up 88%, while small, economy car sales declined.
Comments

Mortgage Market News

The lofty home price gains seen in 2013 are quickly fading to more sustainable levels in 2014. The September Case Shiller 20-city Home Price Index rose by 4.6% from September 2013, the slowest gain in two years. The 4.6% is down from the August annual rate of 5.6%, but above 4.6% expected. September saw a 0.3% gain, which was the first positive reading since April. A spokesman for Case Shiller said "the overall trend in home price increases continues to slow down."
Consumer Confidence unexpectedly slipped in November after a strong reading the month before declining to 88.7 from 94.1 in October. The 88.7 was below the 96.0 expected. Lynn Franco, Director of Economic Indicators at the Conference Board said, "Consumer confidence retreated in November, primarily due to reduced optimism in the short-term outlook." Within the report it showed that consumer assessment of the job market was slightly less favorable than the October reading.
Economic growth across the nation continued to be solid in the third quarter of 2014 led by stronger consumer and business spending. The second estimate for third quarter 2014 Gross Domestic Product (GDP) rose by 3.9%, up from the initial reading of 3.5%, which was above the 3.2% expected. The weak gains seen earlier this year, due to the harsh winter weather, have quickly faded. For the past six months GDP rose by 4.2%, the strongest stretch since the middle of 2003. Combining all three quarters this year, GDP is running at a 2.1% pace, not a real good number, but has been improving. GDP measures goods and services produced across the economy.
Comments

Mortgage Market News

News from the housing sector showed that confidence among home builders is on the rise, after some weak readings earlier in the year. Rising consumer confidence has been a key reason for the turnaround. The National Association of Home Builders (NAHB) reported on Tuesday that its Housing Market Index rose to 58 in November from October and above the 55 that was expected. An NAHB spokesman said "low interest rates, affordable home prices and solid job creation are contributing to a steady housing recovery."
Inflation at the wholesale level unexpectedly increased in October, despite the decline in gas prices at the pumps. Lower gas prices were offset by rising prices for meat, electric power, pharmaceuticals and passenger cars. The Producer Price Index (PPI) rose by 0.2% last month, above the -0.2% expected and up from the -0.1% in September. When stripping out volatile food and energy, the so-called Core PPI rose by 0.4%, above the 0.1% expected. The index measures the cost of goods and services before they reach the consumer.
Early season snowstorms are blanketing half of the U.S. with even Amarillo, Texas receiving nearly three inches of snow a few days ago. Upstate New York, which is a big snow state, is currently receiving three or four feet of snow, which is not typical this early in the season. The National Operational Hydrologic Remote Sensing Center reported that there was snow cover on 50.1% of the lower 48 U.S. states as of today, which is the earliest that the halfway mark has been passed since it began measuring this method in 2008. It also beats a similar method that dates back to 2003 that included parts of Canada.
Comments

Mortgage Market News

News from abroad read that Japan has fallen into a recession after the country's Gross Domestic Product (GDP) declined for two consecutive quarters. A recession is defined as a significant decline in economic activity, which includes industrial production, employment, real income and wholesale retail trade. A recession is measured by two consecutive negative quarters of GDP data. Japan's GDP fell by 1.6% in the third quarter after falling 7.3% in the second quarter.
The New York State Manufacturing Index bounced back in November after a somewhat weak reading in October. The index rose by 10.2 this month, up from the 6.2 registered in October, but lower than the 12.0 expected. The general business index signaled that business condition activity continued to expand in November, though at a slower pace from the May to September period. Within the report it showed that the employment component edged lower.
A recent study reveals that first-time homebuyers are faced with many challenges with the mortgage process, according the J.D. Power 2014 Primary Mortgage Origination Satisfaction study. The big issues facing first time homebuyers is growing student loan debt and affordability. Recent data shows that among the respondents purchasing a home, 58% are first timers. In addition, lack of experience and uncertainty regarding the process is also a barrier when it comes to first time buyers.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported today that its Builder Application Survey for October showed that mortgage applications for new home purchases rose by 8% from September. Within the release it showed that new single-family homes were running at a seasonal adjusted annual rate of 461,000 units in October, which is up 8.5% from the September number of 425,000. In October it is estimated that there were 36,000 new home sales, up from the 32,000 in September, a 12.5% gain.
The mortgage delinquency rate in the U.S. continued to decline in the third quarter as the rate has now returned to the levels last seen before the housing market downturn. Late payments on mortgages declined to 5.85% in the third quarter and has now fallen six straight quarters as the economy and the job market recovers. It is the lowest level since the fourth quarter of 2007, according to the Mortgage Bankers Association's latest National Delinquency Survey.
The ongoing story of lower gas prices at the pumps continues to dominate the headlines. The current national average price for a regular gallon of gasoline is at $2.91, down from $3.18 a month ago. The U.S. Energy Department reports that the average price of gasoline will be below $3 a gallon in 2015, with consumers saving $61 billion on gas compared to 2014. The average price motorists can expect to pay at the pumps for a regular gallon of gas in 2015 is expected at $2.94, predicts the Department of Energy.
Comments

Mortgage Market News

The Labor Department reported this morning that Americans filing for first time unemployment benefits rose in the latest week, but continue to remain near multi-year lows. Weekly Initial Jobless Claims were up 12,000 in the latest week to 290,000, which was above the 280,000 expected. Claims have remained below the 300,000 level for nine straight weeks, a feat that has not occurred since 2000. However, there are 18.2 million Americans that they can't find a full-time job, which is not a good sign five years into an economic recovery.
In the foreclosure arena, RealtyTrac reported that foreclosure filings, including default notices, scheduled auctions and bank repossessions, rose for the second straight month in October. Filings were up 15% from September to October, but are lower by 8% from year ago levels. The 15% was the largest month-over-month increase since foreclosure activity topped out back in March 2010. Properties scheduled for foreclosure totaled nearly 60,000 in October, up 24% from the previous month and up 7% from last year this time.
The Bureau of Labor Statistics reported today that U.S. employers hired workers at a rapid pace in September, as evidenced by the Job Openings and Labor Turnover Survey (JOLTS). There were 5 million employees added to the staffs in September, which was the strongest pace since the last recession began back in 2008. In addition, the rate at which employees quit their jobs rose to a six-year high, a sign that Americans are confident that they can seek employment elsewhere.
Comments

Mortgage Market News

The Mortgage Bankers Association (MBA) reported today that despite home loan rates hovering near 18-month lows, mortgage applications fell in the latest week. As the holiday season approaches, decisions on purchasing or refinancing mortgages could be taking a back seat. The MBA reported that its Market Composite Index, a measure of total loan application volume, fell by 0.9% in the latest week. The refinance index declined 2%, while the purchase index fell by 1% from a week earlier.
Five of the largest banks in the world have agreed to pay massive fines over allegations that they attempted to manipulate foreign exchange rates. The United Kingdom's Financial Conduct Authority has fined Citibank, HSBC, JPMorgan Chase, RBS and UBS a total of $3.38 billion. The fine is the largest ever imposed by the British regulator saying that between 2008 and 2013, the banks allowed traders to share confidential information and collude with each other to fix rates and to increase the bottom line. Foreign exchange rates impact the price of imported goods, company earnings and a host of investments held by pension funds and others.
On the lighter side, with Thanksgiving rapidly approaching, a few facts to know about the upcoming U.S. holiday. Legend has it that the TV dinner was born in 1953 when someone at Swanson misjudged the number of frozen turkeys needed by 26 tons! So Swanson cut up the turkeys and the TV dinner was born. If Ben Franklin had his way, the turkey would have been our national bird. Franklin said the eagle had bad moral character and that the turkey was a much more respectable bird. And last, only male turkeys gobble. Females, called hens, cackle.
Comments

Mortgage Market News

The list of U.S. retailers to remain closed on Thanksgiving continues to grow this year as they give their workers a break and maintain their reputations. Retailers are now pushing back against the "Black Friday creep", where retailers open for business on Thanksgiving. A Sam's Club spokeswoman said that they "want their associates to have that time to spend with their families, while their customers wanted to spend the day with their loved ones." However, Radio Shack announced it will opening its doors at 8:00am on Thanksgiving as the struggling electronics store looks to increase sales.
D.R. Horton, the largest U.S. homebuilder, reported today that quarterly revenues from home sales rose by 33% in its latest earnings report to $2.40 billion, which was above the $2.38 billion expected. In addition, the number of homes sold jumped by 25% to 8,612 units - the company caters to those purchasing their first or second homes. Within the report it showed that the homebuilder had earnings per share of 45 cents, which was below the 48 cents that was estimated.
After a brief pause in October, U.S. Stock markets are trading at all-time highs with the closely watched S&P 500 Index hitting 39 new closing highs in 2014 versus 45 in 2013. The index is now up 10% for the year after rising by a staggering 31% in 2013. In addition, it is up over 200% since the low of 666 seen on March 9, 2009, which was the height of the great Recession. The meteoric rise in Stocks has been due to a recovering job and housing market along with an economic recovery, which has been due in part to the various stimulus programs enacted by the U.S. Federal Reserve. The S&P is now at 2,037.
Comments

Mortgage Market News

Government sponsored agency Fannie Mae released its October National Housing Survey revealing that Americans' optimism regarding the housing market continued its gradual ascent amid greater confidence in household income and personal finances. Within the report it showed that those who feel it is a good time to sell rose to 44%, a new all-time survey high. In addition, the percentage of those surveyed who expect their personal financial situation to get better over the next 12 months increased to 45%.
Gas prices at the pump continued to decline in the latest survey, which is putting extra cash in the pockets of consumers as the holiday shopping gets underway. The national average price for a regular gallon of gasoline is at $2.92, down from $3.24 a month ago and below the $3 level for the first time since 2010. However, the decline in gas prices are being offset by soaring food costs. In one hand, and out of the other.
The U.S. Department of Agriculture predicts that food prices will rise 2.5 to 3% this year, which is above the current inflation rate of 1.7%. Analysts are predicting that higher food prices could wipe out $10 billion from the wallets of consumers in November and December compared with last year, which is double the $5 billion boost expected from lower gas prices.
Comments

Mortgage Market News

Americans filing for first time unemployment benefits fell to multi-year lows in the latest week as the sector continues to recover and move into greener pastures. The Labor Department reported that Weekly Initial Jobless Claims fell by 10,000 to 278,000 and is the second lowest level since the Great Recession ended. The four-week moving average of claims, which irons out seasonal abnormalities, fell to a 14-year low of 279,000, down 2,950 from the previous week. Since June, claims have averaged 293,000 per week compared to last year's same time period of 343,000 and well below the 594,000 average per week in 2009.
Global outplacement firm Challenger, Gray & Christmas reported today that after falling to a 14-year low in September, planned layoffs by employers across the nation surged by nearly 70% from September. U.S. employers announced planned cuts of 51,183 in October, well above the 30,477 planned in September. October is the second highest amount of planned cuts since the May 2014 figure of 52,961 and marks only the fourth time in the last 22 months that planned cuts were above 50,000.
With the Thanksgiving Holiday quickly approaching, more Americans are expected to take to the skies to visit friends and relatives this season. Airlines for America reports that 24.6 million passengers will fly domestically between November 21 and December 2. That's up about 1.5% from 2013, or 31,000 more passengers per day. U.S. carriers have reaped some big profits in that past year and are making sure that there is enough room to meet the growing demand. The top three destinations for Thanksgiving are Chicago, Orlando and Cancun.
Comments

Mortgage Market News

The first of two closely watched reports on the labor markets was released this morning showing that private employers added more jobs in October than expected, as the sector continues to move to greener pastures. Payroll processor ADP reported today that private employers added 230,000 jobs in October led by a big surge in hiring at mid-size businesses. That was better than the 220,000 that was expected while September was revised to 225,000 from 213,000. With October's gain, private sector jobs have hit at least 200,000 per month for a record seven straight months, which dates back to the inception of the ADP report in 2001.
The Mortgage Bankers Association reported today that credit availability declined in October, according to its Mortgage Credit Availability Index (MCAI). The MCAI decreased by 2.5% in October after having held steady in September, while August saw a decline. An MBA spokesman said "the major cause of decline in the credit index was the removal of special loan programs which only pertain to REO (Real Estate Owned) sales." A decline in the MCAI signals lending standards are tightening, while a rise in the index indicates loosening of credit.
Mortgage applications declined in the latest week as home loan rates edged higher, but applications continue to hover near 18-month lows. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, fell by 2.6% in the latest week, which includes both refinancing and home purchase demand. The refinance index fell by 5.5%, while the purchase index rose 2.6%. The survey covers over 75% of U.S. retail residential mortgage applications.
Comments

Mortgage Market News

The big home price gains that were seen in 2013 have leveled off to more normal levels in 2014. CoreLogic reported on Tuesday that housing prices, including distressed sales, rose by 5.6% from September 2013 to September 2014, marking 31 months of straight year-over-year increases. However, that is down from the August level of 5.8% and July's 6.4% yearly increases. In addition, prices declined by 0.1% from August to September. CoreLogic is a leading provider of consumer, financial and property information, analytics and services to business and government.
The European Union (EU) cut its growth forecast for 2014 and 2015 today. The headlines pushed Stock prices lower around the globe and is spilling over into the U.S. Equity markets. Growth forecasts for the 28-nation Eurozone are now 1.3% for 2014, down from 1.6%. A big problem is low inflation with predictions of a 0.5% rate this year before rising to 0.8% in 2015. The German economy, long seen as the standout in the region, is expected to grow by 1.3% this year, down from the original forecast of 1.8%.
The weak European forecasts continue to move oil prices lower to their lowest levels since October 2011 hitting $75.84 a barrel on Tuesday. This has put some extra cash in the pockets of U.S. consumers as Americans are paying the lowest for gas prices since December 2010. The national average price for a regular gallon of gasoline at $2.97. In some parts of the country prices can be seen near $2.50.
Comments

Mortgage Market News

The National Association of REALTORS® (NAR) released the findings from its 2014 Profile of Home Buyers and Sellers today revealing that 33% of recent home buyers were first time home buyers. The 33% is down from 38% a year ago and below the historical norm of 40% among primary residence buyers and is also a 30-year low. The details showed that the typical first time BUYER was 31-yearS old, while the repeat buyer was 53. A spokesman from the NAR said "rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the job market."
A report from Black Knight Financial Services says that near record low home loan rates for the 30-year mortgage interest rate has expanded the number of borrowers who could benefit from refinancing their current mortgages. The number of those who could benefit has swelled by 25% to 7.4 million borrowers. Within the report it also said that the share of borrowers with negative equity declined to just below 8% as of July, down from 33% at the end of 2011 and is at the lowest point since 2007.
The Federal Reserve's Bond buying program, otherwise known as Quantitative Easing or QE, ended in October due to gains in the job markets and strength in the U.S. economy. QE began back in early 2009 and has run in one form or another since that time up until last month. The Fed's balance sheet now stands at $4 trillion, which is made up of Treasury and Mortgage Backed Securities. However, the shorter term Fed Funds Rate, currently at 0.0% to 0.25%, will remain low for a considerable time.
Comments

Mortgage Market News

Home loan rates dropped to lowest levels in a year this week after a weak Gross Domestic Product report was released on Wednesday. Freddie mac reported that the 30-year fixed conventional home loan rate hit lows. A year ago, the rate was 4.46 with 0.8 points/fees added on top of the rate.
Americans filing for first time unemployment benefits continue to hover just above the 300,000 level coming in at 312,000, just above the 310,000 that was expected. The four-week moving average of claims, which irons out any seasonal abnormalities, rose by 2,000 to 314,250. Jobless claims are near post recession lows as the sector continues dig out of the hole that the recession caused.
The government reported this morning that consumers spent on cars and trucks in May, but not much else, despite decent income gains. Personal Spending rose by 0.2% in May, below the 0.4% expected. When factoring in inflation pressures, spending fell for the second straight month. Americans did see a fifth straight months of an uptick in incomes, which rose by 0.4% in May. In addition, the savings rate rose by 4.8% from 4.5%, the highest level in eight months.
Comments

Mortgage Market News

Housing news dominates the headlines this week as the sector tries to stabilize after the harsh winter weather early in the year weighed on the market. Black Knight Financial Services reported today that home prices rose 0.9% from March to April and were up 6.4% year-over-year. Within the report it showed that 19 of the 20 largest states saw month-over-month increases.
The National Association of REALTORS© (NAR) reported that May Existing Home Sales were up 4.9% from April to an annual rate of 4.89 million units. The 4.9% was the highest monthly rate since the 5.5% recorded in August 2011. The report showed that the median home price was $213,400, which is 5.1% above May 2013, while inventories account for a 5.6 month supply. The NAR said that "buyers are benefiting from slower price growth due to much needed, rising inventory levels since the beginning of the year."
The cost of air conditioning homes across the U.S. is around $11 billion a year with air conditioning accounting for about 5% of all electricity produced in the U.S. There are a few tips to help cut costs. If you have central air conditioning, a shaded area for the unit is the best spot to ensure the highest efficiency. During the cooling period, change the filter once a month so that the unit doesn't have to work extra hard to cool the house. Closing the blinds and curtains during the peak sun hours will also boost efficiency. In addition, installing ceiling fans will also reduce costs and try to keep the lights off during the long days of sunlight in the summer
Comments
See Older Posts...
Copyright © 2007-2016, Sheila Ledesma, Goldwater Bank. All Rights Reserved. Contact Webmaster.