Looking at some great news about foreclosures, some not so great news about affordability, wealth and home ownership, and much more!
U.S. Foreclosure Activity Drops to 12-Year Low in 2017
ATTOM Data Solutions just reported that US foreclosure filings in 2017 were down 27% from 2016 and down 76% from the peak in 2010. US foreclosure filings are at the lowest level since 2005 according to Attom’s report.
Very nice! Check out the chart:
Attom also reported that foreclosure filings in December 2017 were up 1% from the previous month BUT down 25% from a year ago. This is the 27th consecutive month with a year-over-year decrease in foreclosure activity.
I must regretfully report that Attom said that South Carolina is in the top 10 of states with the highest foreclosure rates. While things are much better than they were, there are still too many foreclosures in South Carolina.
It has taken a long long time to recover from the housing crash. I just hope we have learned something from this…
Housing Affordability Decreases
At the national level, housing affordability is down from last month and down from a year ago. Mortgage rates increased to 4.19 percent this November, up 9.3 percent compared to 3.82 percent a year ago.
As home prices and mortgage rates increase, it hurts the buying power of many buyers. Some buyers will be “priced out” of the market…
Still, you must remember that homes are STILL very affordable compared to the past when mortgage rates were much much higher!
The Hazards of Concentrating Wealth in Home Ownership
Interesting stuff from William Emmons, lead economist at the St Louis Fed:
Homeownership can be part of a financially sound household’s portfolio, but evidence suggests that it should constitute a limited share of assets.
I would agree because you should never put all your eggs in one basket. Yes, owning a home is a great way to build wealth but you need to talk to your financial planner and tax advisor about how to diversify.
That being said, there is no doubt that owning a home and being financially secure is part of the American Dream…
Home Ownership and The American Dream
We all want to be happy and for many Americans, one of their dreams is owning a home. NeighborWorks America recently did a survey that showed that owning a home is STILL a big part of the American Dream.
They asked how important owning a home was in achieving the American Dream. 18% said it was the most important part, 53% said it was very important and 22% said it was somewhat important.
Obviously, owning a home is a big part of the American Dream despite the poo pooing of the critics…
The survey also said that 81% think that owning a home results in a more financial stability. So while diversifying is important, most people realize that owning a home is important as well.
Zillow Senior Economist Aaron Terrazas recently said:
After about a two-year slowdown, rent growth is starting to pick back up across the nation…Looking into 2018, rent is expected to continue gaining.
More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.
Achieving the American Dream and securing your financial future is going to be pretty hard if you are faced with your housing costs rising every year. Buying a home is not the answer in every case but it can be an important wealth building tool!
Consumer Bureau Takes First Step to Revising Payday Lending Rule
From The Hill:
The Consumer Financial Protection Bureau (CFPB) announced Tuesday that it would accept applications from lenders to waive the first deadline for complying with its payday lending rule.
The rule, aimed at protecting consumers from incurring crippling debts through short-term, high-interest loans, took effect on Tuesday.
The waivers would give the CFPB more time to finish their review and anticipated revision of the rule before lenders would have spent resources preparing to follow it.
Sad that our elected officials and policy makers put the interests of big business ahead of their constituents. I know that some argue that regulations against payday lenders will “limit the options” for some consumers.
Wells Fargo Loses Bid to End Predatory Lending Lawsuit
A federal judge in Philadelphia on Tuesday rejected Wells Fargo & Co’s bid to dismiss that city’s lawsuit accusing the largest U.S. mortgage lender of predatory lending targeting black and Hispanic borrowers.
U.S. District Judge Anita Brody said Philadelphia may pursue claims that the bank’s alleged “reverse redlining” violated the federal Fair Housing Act, though she had “serious concerns” about whether claims of economic harm could survive.
The lawsuit is one of several against big lenders by major U.S. cities claiming that mortgage lending discrimination causes more defaults by minority borrowers, lower property tax revenue, and higher costs to combat crime and blight.
Related to the previous story because some would eliminate all regulations that would protect consumers from predatory lenders. After all, that would “limit the options” of consumers.
And getting screwed should be one the options for consumers according to some jerks…
Robot ‘Dystopia Already Here’: AI to Sink Us Into ‘Unemployed Despair’
From Daily Star:
HUMAN beings are already on course for a hellish dystopia where robots have replaced all jobs and the world sinks into global depression, an expert has warned.
Technology has rapidly thrust robots into the human economy but fears are spiralling that artificial intelligence will spark mass unemployment.
Dr Subhash Kak – a Professor of Electrical and Computer Engineering at Oklahoma University – previously said robots could replace humans at “literally all jobs”.
“There will be massive unemployment. People want to be useful and work provides meaning, and so the world will sink into despair.
“Policy makers have begun to speak of a minimum guaranteed income with everyone provided food, shelter, and a smart phone, and that will not address the heart of the problem.”
Pretty depressing but we must work to ensure our future and not depend on the government or policy makers to help us…
The I Word
U.S. headline Consumer Price Index (CPI) inflation rose 0.1% in December, bringing the year-over-year figure to 2.1% for 2017. While this level is in line with what we saw in 2016, the apparent stability masks a roller coaster over the year for core CPI – the component excluding energy and food prices that markets and economists follow to gauge the underlying inflation trend.
Indeed, we expect core CPI of around 2.1% by the end of 2018 – a modest acceleration relative to 2017. Similarly, we expect the Federal Reserve’s preferred measure of inflation, core personal consumption expenditure (PCE), to accelerate as well, ending the year at around 1.75%, 25 basis points below its target.
Even if inflation fails to reach the Fed’s 2% target, we believe it should be sufficient to allow for three rate hikes in 2018. But with 10-year and 30-year inflation breakeven rates at 2% and running very close to the core CPI trend, we don’t see much inflation risk being priced by market participants.
If we do see 3 more Fed rate hikes in 2018, it is quite possible that we will finally see mortgage rates increase. I know we have been hearing that rates are going to increase for several years but it appears this time could be true..
Consumer Credit Defaults in December 2017
S&P Dow Jones Indices and Experian just released their latest S&P/Experian Consumer Credit Default Indices and the composite rate increased two basis points from last month to 0.91%. The first mortgage default rate increased two basis points to 0.68% BUT the number of first mortgage defaults haven’t changed much over the last two to three years.
Well that is all for today folks! Be sure to subscribe so you never miss another post as I always have more Ugly But Honest News to share! And if you want to proudly proclaim your awesomeness to the world, hit those share buttons!