Discussing this week’s average mortgage rates, the big jobs report, more predictions for housing in 2018, tax reform and housing and more!
Mortgage Rates This Week
Freddie Says Rates Increased
- 30-year fixed-rate mortgages averaged 3.94% with an average 0.5 point
- This is up from last week when it averaged 3.90%
- Last year at this time, 30-year fixed-rate mortgages averaged 4.13%
- 15-year fixed-rate mortgages averaged 3.36% with an average 0.5 point
- This is up from last week when it averaged 3.30%
- Last year at this time, 15-year fixed-rate mortgages averaged 3.36%
Len Kiefer, Deputy Chief Economist at Freddie Mac said:
This week’s survey reflects last week’s uptick in long-term interest rates, with the 30-year fixed mortgage rate up 4 basis points to 3.94 percent. The 30-year mortgage rate has been bouncing around in a 10 basis point range since September.
Not a huge increase but higher rates will cost you more money if you are buying a home…
The Mortgage Bankers Association Reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.19% from 4.20%, with points increasing to 0.40 from 0.34 (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 $424,100) increased to 4.16% from 4.14%, with points increasing to 0.28 from 0.27 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.59% from 3.57%, with points increasing to 0.48 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Not all of the rates reported by the MBA increased but since these are the average rates, the best thing for you to do is to talk to the lender of your choice.
You will never know exactly what is possible until you take the first step and talk to a lender. Mortgage rates are STILL super low and waiting could prove to be costly…
Buoyed by Healthy Economy, Contractors Upbeat
The majority of commercial and industrial contractors are confident about sales growth, profits and staffing levels heading into 2018. Despite rising construction labor and materials costs, 55 percent of contractors expect their profit margins to expand in the first half of 2018.
Nice! Let’s hope this confidence turns into more jobs and economic growth in 2018.
Great News in the Jobs Reports
Total nonfarm payroll employment increased by 228,000 in November, and the unemployment rate was unchanged at 4.1 percent.
The labor force participation rate remained at 62.7 percent in November and has shown no clear trend over the past 12 months.
In November, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.55. Over the year, average hourly earnings have risen by 64 cents, or 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 5 cents to $22.24 in November.
The increase in employment is above what economists had forecast. However, wage growth is still weak and was below what was forecast.
The 1% Owns More of the Country’s Wealth Than Any Time in 50 Years
From The Washington Post:
The wealthiest 1 percent of American households own 40 percent of the country’s wealth, according to a new paper by economist Edward N. Wolff. That share is higher than it has been at any point since at least 1962, according to Wolff’s data, which comes from the federal Survey of Consumer Finances.
From 2013, the share of wealth owned by the 1 percent shot up by nearly three percentage points. Wealth owned by the bottom 90 percent, meanwhile, fell over the same period. Today, the top 1 percent of households own more wealth than the bottom 90 percent combined. That gap, between the ultrawealthy and everyone else, has only become wider in the past several decades.
Ouch! This will eventually leads to problems but what can or should be done?
What Will Happen to Housing in 2018?
Trulia recently had a survey conducted and had some interesting findings:
- Americans Less Optimistic on Home Buying
- Housing Optimism Decreases Since Trump Became President
- Americans More Enthusiastic About Selling
- Natural Disasters Become Bigger Concern Especially in the South
- The Homeownership Rate Will Continue to Rebound
- Only 10% of Americans Plan to Buy a Home in Next 12 Months
Kind of mixed signals. They are saying that people are less optimistic about buying but somehow the homeownership rate will increase?
And it is easy to see why people are more optimistic about selling…
Median Days on the Market Drops to 34!
Check out how quickly homes are selling across the US according to the latest NAR Realtors Confidence Index:
You can see why more people are feeling optimistic about selling their home! The thing to remember this are the averages. Every property and market is different so your best bet is to talk to a local Realtor see what is possible for your home.
The Tax Bill Is Bad for Homeowners, Good for Landlords
Bloomberg has an interesting article that explains how home owners will get the short end of the stick because of changes to tax deductions. But landlords will benefit because “they tend to do business via pass-through entities — real estate investment trusts, partnerships, limited liability companies, S corporations and sole proprietorships — that are set to get big tax breaks in both the House and Senate bills”.
What will this mean for real estate? I am not thinking we will see a dramatic decrease in home values unless something else negative happens. We may see an uptick in the number of people investing in rental properties because of these tax advantages.
It Isn’t What You Say, It’s What You Do
Reuters reported on Thursday that the new acting head of the U.S. consumer finance watchdog agency was reviewing whether Wells Fargo should pay tens of millions of dollars over alleged mortgage lending abuse, according to three sources familiar with the dispute.
President Donald Trump took aim at the third-largest U.S. bank on Friday, writing on Twitter that government fines and penalties against Wells Fargo & Co could be hiked amid an ongoing sales scandal.
I shared this yesterday and wondered if Mulvaney will turn the CFPB into a friend of Wall Street and the banks. Trump is saying no but we will have to wait to see what happens…
That is it for today! Be sure to subscribe and please share if you enjoyed this post!