Discussing mortgage delinquencies and foreclosures, the economy, small business optimism, flood insurance, remodeling heating up plus more!
Mortgage Delinquencies Decrease to 11 Year Low
Good news from CoreLogic:
In August 2017, 4.6% of home mortgages were in some stage of delinquency, down from 5.2% a year earlier and the lowest for any August since 2006, when it was 4.4%.
The share of mortgages in some stage of the foreclosure process was 0.6%. This is down from 0.9% a year earlier and at the lowest level in 10 years. Before the foreclosure crisis began in mid-2007, the foreclosure inventory rate averaged 0.6 percent.
It has been a long rough road to get to this point! Remember this is talking about the entire country but it is still great news.
U.S. Economy in a Snapshot
Highlights from the latest NY Fed Economy in a Snapshot:
Real consumer spending showed a strong rebound in September. Motor vehicle sales picked up notably in September and October after declining through much of the year.
Housing indicators still point to continued gradual improvement in this sector. Multi-family starts remained appreciably below their recent peaks, but tight market conditions continued to promote a gradual rise in single-family starts.
Payroll growth recovered in October from the effects of Hurricanes Harvey and Irma. The unemployment rate, the employment-to-population ratio, and the labor force participation rate all declined. Growth of labor compensation remained subdued.
Monthly readings on PCE inflation indicated that core inflation continues to run somewhat below the FOMC’s longer-run objective.
The increase in consumer spending would be great IF we also saw an increase in wages. Single family starts are still too low if you think about household formation and the current inventory issue. The low inflation probably will NOT stop the Fed from raising their benchmark rate in December.
Where Are We Going and Why Am I in This Hand Basket?
How are Americans feeling about the direction of the country?
According to Gallup, Americans’ satisfaction with the way things are going in the U.S. has edged up to 25% in November. 33% of likely U.S. Voters think the country is heading in the right direction according to the latest Rasmussen Reports phone survey.
Pretty pitiful numbers and it makes me wonder if people are being overly pessimistic.
Bipartisan Regulatory Relief Deal
It appears that some changes are coming because of a new bipartisan deal announced today by Senate Banking Committee. This legislation is supposed to improve financial regulations and promote economic growth.
Senate Banking Committee Chairman Mike Crapo (R-Idaho) said:
A strong and vibrant economy is important for American consumers, businesses, and the stability of the financial sector. The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks.
This is supposed to help community banks, credit unions, mid-sized banks, regional banks and custody banks. It includes important consumer protections, particularly for veterans, senior citizens and victims of fraud.
It is also supposed to help with consumer access to mortgage credit.
I was quite surprised to see the politicians working together to improve something that will help the average American. I guess miracles still happen…
Mortgage Customer Satisfaction Declines
According to JD Power, the use of technology in the mortgage industry isn’t making it faster and easier for consumers. JD Power found that overall satisfaction with mortgage originators has declined this year because consumers think it is taking too long.
The way consumers are submitting a mortgage application has changed dramatically. 43% of mortgage customers applied digitally in 2017 compared to only 28% in 2016. Despite this increase, consumers were less satisfied with applying digitally compared to applying in person.
Many consumers need the expertise of a mortgage broker more than the convenience and technology of getting a mortgage online. Sadly, most of these consumers do not know they may not be getting the best mortgage for their unique situation.
Small Business Optimism Increases
The Index of Small Business Optimism gained 0.8 points to 103.8 in October, maintaining a streak of robust readings. Four of the 10 Index components posted a gain, 5 declined and one was unchanged. Labor market indicators point to continued good jobs reports, as reports of actual employment gains for October posted solid numbers and reports of job openings surged to record territory. Reports of increased compensation remained strong, and the incidence of reported price increases rose a bit, good news for the Federal Reserve, which wants more inflation. Plans to spend on inventory and capital projects didn’t advance but held at solid levels. Owners became much more optimistic about the environment for expansion, which implies a more positive longer-run view. In the nearer term, they are more optimistic about real sales growth and improved business conditions through the end of the year. The net percent of owners reporting positive sales trends did not improve but did remain positive.
NFIB Chief Economist Bill Dunkelberg said:
Consumer sentiment surged based on optimism about jobs and incomes, an encouraging development as consumers account for 70 percent of GDP.
Much better than the pessimistic survey results from Gallup and Rasmussen. Hopefully we will see strong sales this Christmas and 2018 will be a very robust year for the economy.
Wall Street Penalties Have Fallen in Trump’s First Year
In its latest fiscal year, Wall Street’s top regulator sought the smallest amount of penalties since 2013, a drop that took place as the agency went months without permanent leadership and could show a softer approach to policing wrongdoing.
I guess this is part of the swamp draining?
House Passes Flood Insurance Reform
The House of Representatives voted to pass H.R. 2874. This would reauthorize the National Flood Insurance Program through September 30, 2022. The legislation also would increase insurance premiums and make several other amendments to the program’s operations.
2 interesting changes is this bill would make it easier for private insurance companies to get into the flood insurance business and stop the NFIP from covering properties the repeatedly flood.
I feel sorry for the people that own homes that will no longer be covered by the NFIP. The NFIP is deeply in the red and we cannot keep paying for it as it is.
However, these changes have to get through the Senate and we know how dysfunctional Washington can be…
Economy is Heating Up Remodeling
The RRI, measuring overall remodeling activity in the nation, improved to a new high of 110.0 in third quarter 2017. The latest RRI gained 4.8 percent from one year earlier and 1.2 percent from the previous quarter. Third quarter 2017 marks twenty-two consecutive quarters of year-over-year gains in the index since 2011, the bottom of remodeling activity nationwide.
This is good news for the economy but some of this increase may be due to rebuilding after the hurricanes. Or it could be that many buyers are finding homes for sale that need some remodeling are the best deals.
That is it for today! Be sure to hit those share buttons and subscribe so you never miss another post!