Talking about mortgage rates, 2 more settlements and how price affects the number of people that see a home for sale and more…
Home Builder Confidence Holds Firm in January
Builder confidence in the market for newly-built single-family homes remained on firm ground in January, down two points to a level of 67 from a downwardly revised December reading of 69 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
The solid reading is consistent with building expectations heading into the new year. NAHB expects 10 percent growth in single-family construction in 2017, adding to the gains of 2016. However, ongoing industry concerns include rising mortgage interest rates as well as a lack of lots and access to labor.
The HMI rose sharply in December as the election results raised hopes among builders that a new Congress and administration will help create a better business climate for small businesses, particularly with respect to improving regulatory costs, which increased more than 29% over the last five years.
Confident home builders is great BUT more affordable homes would be even better…
Consumer Price Index for All Urban Consumers Increased 0.3%
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.1% before seasonal adjustment.
Continuing their recent trends, the shelter and gasoline indexes increased in December and were largely responsible for the seasonally adjusted all items increase. The shelter index rose 0.3% in December, while the gasoline index increased 3.0%.
Also see Highest Rent Inflation Since 2007 Sends Core CPI Above Fed’s Target For 14th Consecutive Month
Deutsche Bank to Pay $7.2B for Residential Mortgage-Backed Securities Hijinks
The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007. This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity. The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.
“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch. “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis. The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers, and communities harmed by its practices. Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.”
$7.2 billion is a bunch of money. However, NO ONE is going to jail. Until bank execs and Wall Streeters are held accountable for their crimes, nothing will ever change.
Three Reasons to Remain Bullish on Housing
First American Chief Economist Mark Fleming shares highlights from a recent presentation, including reasons to remain bullish on housing:
- Continued Transition of Economic Power from Baby Boomers to Millennials
- Rising Mortgage Rates
- The Housing Market Will Still Thrive
My advice is to remain calm. I do not suggest being either bearish or bullish. Be logical and unemotional.
Decide what is best for YOU at this point in your life. Talk with an experienced local REALTOR, mortgage professional and your financial and tax people.
U.S. Sues JPMorgan for Alleged Mortgage Discrimination
JPMorgan Chase & Co has agreed to pay $55 million to settle a U.S. Justice Department lawsuit accusing it of discriminating against minority borrowers by allowing mortgage brokers to charge them more for home loans, a person familiar with the matter said on Wednesday.
The U.S. Justice Department complaint, filed in Manhattan federal court on Wednesday, accused the bank of willfully violating the U.S. Fair Housing Act and the Equal Credit Opportunity Act between 2006 and 2009 and showing “reckless disregard” for the rights of at least 53,000 African-American and Hispanic borrowers.
How many times have I shared something like this since the housing market crashed?
Industrial Production Rose 0.8% in December
Industrial production rose 0.8 percent in December, total industrial production in December was 0.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.6 percentage point in December to 75.5 percent, a rate that is 4.5 percentage points below its long-run (1972–2015) average.
Decent but we must play wait and see to what happens with the new administration and how markets react.
The Latest from the MBA on Mortgage Rates & Applications
Mortgage applications increased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 13, 2017. The previous week’s results included an adjustment for the New Year’s holiday.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) decreased to its lowest level since December 2016, 4.27 percent, from 4.32 percent, with points decreasing to 0.39 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,000) decreased to 4.22 percent from 4.27 percent, with points increasing to 0.36 from 0.31 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.51 percent from 3.56 percent, with points decreasing to 0.34 from 0.42 (including the origination fee) for 80 percent LTV loans.
Remember that reports such as this are talking about average mortgage rates. It may not reflect what is possible or realistic for you since you may be able to get a much better rate!
Can or Will Buyers See Your Home?
Here is a quick little visualization showing how important it is to NOT overprice your home:
If you are just 5 to 10% above market value, the number of buyers that will see or look at your home decreases dramatically.
This means your home will sit on the market and quite possibly sell for much less than it should.
Don’t get me wrong because I do not suggest under pricing as a strategy. If you have questions about the market value of your home in the Anderson SC area, please Contact Me!
