Discussing the latest mortgage rate reports, the jobs report, unemployment, which homes are increasing in value faster, GSE reform and much more
Freddie Mac: Mortgage Rates Rise
Freddie Mac’s reported in their latest Primary Mortgage Market Survey that the average 30-year fixed mortgage rates increased to its highest mark in six weeks!
- 30-year fixed-rate mortgages averaged 3.85% with an average 0.5 point
- This is up from last week when it averaged 3.83%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.42%
- 15-year fixed-rate mortgages this week averaged 3.1% with an average 0.5 point
- This is up from last week when it averaged 3.13%
- Last year at this time, 15-year fixed-rate mortgages averaged 2.72%
Sean Becketti, chief economist, Freddie Mac said:
After holding steady last week, rates ticked up this week. The 10-year Treasury yield rose 8 basis points, while the 30-year mortgage rate increased 2 basis points to 3.85 percent.
Remember these are the average rates and may not reflect what is realistic or possible for you!
MBA: Mortgage Rates and Purchase Applications Increase
The MBA also reported that mortgage rates increased! Mortgage applications decreased 0.4% from one week earlier but the unadjusted Purchase Index was 5% higher than the same week one year ago.
The MBA said that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.12% from 4.11%, with points increasing to 0.45 from 0.40 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) increased to 4.09% from 4.06%, with points remaining unchanged at 0.26 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.42% from 3.38%, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
Again these are the average rates but anyone that is serious about buying a home or already looking needs to touch base with their lender.
What Homes Will Appreciate in Value Faster?
There is no doubt that home prices have been steadily increasing. As a buyer, you may be wondering which home will give me the best return on my investment if or when I decide to sell…
The most recent NAR Existing Home Sales Report said the the median home price had increased u% over the past year. The latest CoreLogic Home Price Index Report, said that U.S. home prices have risen 6.7% year-over-year.
And while that is great news, it still doesn’t answer your question…
Which is why this chart using CoreLogic data to look at the year-over-year increases of the U.S. median home price is very interesting:
The chart shows the four price ranges and their growth from July 2016 to July 2017. This is for the entire U.S. and past performance does not guarantee that how things will be in the future.
Plus, you must rely upon someone with the experience and knowledge in your LOCAL real estate market to help you REALLY know what is happening. If you have any questions about buying or selling real estate in the Anderson SC area, please contact me!
Mixed Signals in the Jobs Report
The BLS reported that the unemployment rate declined to 4.2% in September and total nonfarm payroll employment decreased by 33,000. Also buried in the Household survey was that full time jobs increased by 935,000.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents to $26.55. Over the past 12 months, average hourly earnings have increased by 74 cents, or 2.9 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents to $22.23.
The U-6 decreased to 8.3%. This is the lowest it has been since 2007. The U-6 combines the unemployment rate, discouraged and marginally attached workers plus those that are part-time for purely economic reasons.
The decrease in the U-6 and the increase YoY for hourly earnings are the biggest positives in my opinion. The fact that 33,000 jobs were lost and that YoY job growth is at the lowest since 2001 are the biggest negatives.
You may be wondering how 33,000 jobs were lost yet the unemployment rate decreased. The way the government determines if someone is employed has nothing to do with whether or not that person actually worked or got paid.
If that does NOT make sense to you, then you are starting to understand our government at work. The hurricanes did affect these numbers despite the government saying it did not. Hopefully, these losses will be temporary and we will see improvement next month.
Check out some of the charts:
Yesterday, we got the latest unemployment claims report from the DOL and they said that initial claims decreased 12,000 from the previous week and the 4-week moving average decreased 9,500 from the previous week.
This was also affected by the hurricanes so remain calm…
Record Breaking Rail Traffic
For a second straight week, the U.S. set a new weekly record for intermodal rail traffic. Total U.S. weekly rail traffic was 559,555 carloads and intermodal units, up 1.9 percent compared with the same week last year.
AAR Senior Vice President John T. Gray said:
As our economy and population grow, consumer spending will grow too, and intermodal will continue to be the best way to get many goods to consumers. The last two weeks of September were the top two intermodal weeks in history for U.S. and Canadian railroads. We’re confident that the tremendous efforts railroads have been expending in recent years to improve service and enhance capacity will translate into continued intermodal gains.
Very nice and excellent sign for the economy.
Housing Finance Reform Needs to Happen ASAP
FHFA Director spoke before Congress this week and said:
I have said repeatedly, and I want to reiterate, that these conservatorships are not sustainable and they need to end as soon as Congress can chart the way forward on housing finance reform. However, it is important for all to acknowledge that the conservatorships have led to numerous reforms of the Enterprises and their operations, practices, and protocols that have been extremely beneficial to the housing finance market and have reduced exposure and risks to taxpayers.
It is critically important for the members of this Committee to be well aware of these reforms because you will have the responsibility to ensure that the reforms are not disregarded or discarded because of assertions some will make that the Enterprises now are the same or mirror images of the Enterprises that FHFA placed into conservatorship over nine years ago. I can assure you that such assertions would be unfounded.
Among the important decisions Congress will need to make as part of housing finance reform are the following:
How much backing, if any, should the federal government provide and in what form?
What process should be followed to transition to the new housing finance system and avoid disruption to the housing finance market, and who should lead or implement that process?
What roles, if any, should the Enterprises play in the reformed housing finance system and what statutory changes to their organizational structures, purposes, ownership and operations will be needed to ensure that they play their assigned roles effectively?
What regulatory and supervisory structure and authorities will be needed in a reformed system and who will have responsibility to exercise those authorities?
I reaffirm my belief that it is the role of Congress, not FHFA, to make those housing reform decisions and I encourage Congress to do so expeditiously.
Considering how inept Congress is and how the need to do something about the GSEs has been a problem for quite a few years, I do not have much hope anything will be changed anytime soon…
Or if they they do make changes, it will benefit the banks and Wall Street while screwing over the average hard working, tax paying American…
CEO Confidence Decreased Again
From The Conference Board:
The Conference Board Measure of CEO Confidence™, which reached prerecession highs in the first quarter, declined for a second consecutive time in the third quarter of 2017. The Measure now reads 59, down from 61 in the second quarter (a reading of more than 50 points reflects more positive than negative responses).
Lynn Franco, Director of Economic Indicators at The Conference Board said:
CEO confidence declined again in the third quarter and has cooled since hitting pre-recession highs at the start of this year. CEOs still rate current conditions in the US favorably, but their short-term expectations for growth have eased.
While still positive overall, 2 decreases in a row is something to watch…
CFPB Relaxes Some Mortgage Servicing Rules
The U.S. regulator for mortgage servicers on Wednesday loosened the timing requirements for communicating with struggling borrowers under new rules that take effect later this month to help prevent wrongful home foreclosures.
The Consumer Financial Protection Bureau said last year it would begin requiring servicers, the conduits for mortgage payments, to grant certain foreclosure protections to struggling borrowers more than once over the lives of their loans and to give borrowers in bankruptcy information on possible interventions.
But servicers were confused about the frequency of sending intervention notices to customers who had requested under the Fair Debt Collection Practices Act that companies limit contacting them, raising concerns about how they could follow different federal rules that had conflicting requirements.
Give them an inch and they will take a mile…
I expect we will start hearing horror stories about how some mortgage servicers will use this change to screw consumers…
Did the Senate Just Confirm a Fox to Watch the Hen House?
From ABA Banking Journal:
The Senate today voted to confirm Randal Quarles as the first-ever vice chairman for supervision of the Federal Reserve Board of Governors. Quarles was confirmed to serve on the Fed board by a bipartisan vote of 65 to 32, after which his nomination as vice chairman was approved by a voice vote. The position of vice chairman for supervision was created in the Dodd-Frank Act but has never before been filled.
So far I haven’t heard anything negative about Quarles. Time will tell if the new top bank regulator at the Fed is working for the banks or the American people…
Alleged Fraud by JPMorgan Chase in Mortgage Settlement
From The Nation:
You know the old joke: How do you make a killing on Wall Street and never risk a loss? Easy—use other people’s money. Jamie Dimon and his underlings at JPMorgan Chase have perfected this dark art at America’s largest bank, which boasts a balance sheet one-eighth the size of the entire US economy.
After JPMorgan’s deceitful activities in the housing market helped trigger the 2008 financial crash that cost millions of Americans their jobs, homes, and life savings, punishment was in order. Among a vast array of misconduct, JPMorgan engaged in the routine use of “robo-signing,” which allowed bank employees to automatically sign hundreds, even thousands, of foreclosure documents per day without verifying their contents. But in the United States, white-collar criminals rarely go to prison; instead, they negotiate settlements. Thus, on February 9, 2012, US Attorney General Eric Holder announced the National Mortgage Settlement, which fined JPMorgan Chase and four other mega-banks a total of $25 billion.
A Nation investigation can now reveal how JPMorgan met part of its $8.2 billion settlement burden: by using other people’s money.
Here’s how the alleged scam worked. JPMorgan moved to forgive the mortgages of tens of thousands of homeowners; the feds, in turn, credited these canceled loans against the penalties due under the 2012 and 2013 settlements. But here’s the rub: In many instances, JPMorgan was forgiving loans on properties it no longer owned.
Absolutely disgusting and reprehensible! Please read this and share with everyone you know. Ask your elected officials about this and what they intend to do about it!
Poorest Americans Lost More Ground in 2016
From Pew Research Center:
Although the overall U.S. poverty rate declined and incomes rose rapidly for the second straight year in 2016, many poor Americans fell deeper into poverty, according to a Pew Research Center analysis of U.S. Census Bureau data.
The share of the U.S. poor population in severe poverty – defined by the Census Bureau as those with family or individual incomes below half of their poverty threshold – reached its highest point in at least 20 years. It was 45.6% in 2016, up from 39.5% in 1996. (The share of the total U.S. population in severe poverty has declined over the past two years, alongside the overall poverty rate.)
Obviously, this is not good. I wonder what the previous generations of Americans would think about this?
You, and only you, can change your life. Keep pushing towards your goals and dreams.
Winners never quit and quitters never win!
CFPB Cracking Down on Legal Loan Sharks
The Consumer Financial Protection Bureau (CFPB) today finalized a rule that is aimed at stopping payday debt traps by requiring lenders to determine upfront whether people can afford to repay their loans. These strong, common-sense protections cover loans that require consumers to repay all or most of the debt at once, including payday loans, auto title loans, deposit advance products, and longer-term loans with balloon payments. The Bureau found that many people who take out these loans end up repeatedly paying expensive charges to roll over or refinance the same debt. The rule also curtails lenders’ repeated attempts to debit payments from a borrower’s bank account, a practice that racks up fees and can lead to account closure.
CFPB Director Richard Cordray said:
The CFPB’s new rule puts a stop to the payday debt traps that have plagued communities across the country. Too often, borrowers who need quick cash end up trapped in loans they can’t afford. The rule’s common sense ability-to-repay protections prevent lenders from succeeding by setting up borrowers to fail.
I have never understood why these legal loan sharks are allowed to operate. Some will argue that if they did not exist, then people would be forced to turn to illegal lenders.
Just because someone wants to hang themselves does not mean we should sell them a rope…
A Goldilocks Economy?
From Cushman & Wakefield:
The U.S. economy has entered a Goldilocks scenario, one that is not too hot or too cold, but “just about right,” Cushman & Wakefield’s U.S. Macro Forecast reveals.
Real GDP is on track to grow slightly over 2% in 2017, generating nearly 2 million net new jobs this year. The economy’s temperature also seems to be “just about right” for consumers. Confidence is hovering at a near-15-year high, retail sales are accelerating at a 5% rate year-over-year and credit is flowing. In addition, the global economy is also resurgent. World nominal GDP growth is expected to be four times greater this year than it was last year, bolstering global trade and business confidence.
Just about right could prove to pretty darn good!
21% Do Not Plan to Buy a Home
According to Zumper’s Annual Renter Survey for 2017, 21% of the 14,000 polled said they do not plan to buy a home in the future.
When you first hear this, it might sound bad, Just remember these people have to live somewhere and someone will own the place they are renting.
This could be a significant opportunity for those wanting to own income producing rentals…
Bill Introduced to Break Up Big Banks That Abuse Customers
From The Hill:
The top Democrat on the House Financial Services Committee introduced on Wednesday a bill that would empower federal banking regulators to break up large banks that have records of customer abuse.
A snowball in hell has better odds…
Don’t get me wrong as something needs to be done. Sadly, I just don’t have much faith in our elected officials to do the right thing when it comes to the big banks or Wall Street…
And that is it for today! Please be sure to subscribe and share!