Discussing foreclosures, good news for the economy, the down payment and credit scores needed to buy a home plus more!
Foreclosure Starts and Completions at 17-Year Lows
Excellent news from Black Knight:
Though mortgage delinquencies ended 2017 at a 23-month high (up 164K from 2016 year-end), in non-hurricane-impacted areas – representing 90 percent of the total market – delinquency rates declined. The national delinquency rate in non-hurricane-affected areas was 11 percent below long-term norms.
The total number of mortgages either past due or in foreclosure fell by more than 140K in non-hurricane-affected areas, pushing the non-current rate in these areas down to 10 percent below long-term norms. Foreclosure in 2017 was at the lowest level since since 2000.
Check out the statistics but remember that most are skewed due to the continuing effects of the hurrincanes:
Now look at the difference between delinquency rates for first lien mortgages in hurricane and non hurricane affected areas:
So while this is a positive report, we must all remember that there are plenty of Americans that are still feeling the impact of the hurricanes that hit in 2017.
I know that many people looking to buy a home think that foreclosures can be a great way to get a bargain. It can be but the numbers have decreased greatly in Anderson County.
I would ask you if you want to buy a foreclosure or get a great deal? You do not have to buy a foreclosure to get a great deal…
Service Sector Continues to Grow
Economic activity in the non-manufacturing sector grew in January for the 96th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
Anthony Nieves, Chair of the Institute for Supply Management® Non-Manufacturing Business Survey Committee said:
The NMI® registered 59.9 percent, which is 3.9 percentage points higher than the seasonally adjusted December reading of 56 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 59.8 percent, 2 percentage points higher than the seasonally adjusted December reading of 57.8 percent, reflecting growth for the 102nd consecutive month, at a faster rate in January.
The non-manufacturing sector reflected strong growth in January after two consecutive months of pullback. Overall, the majority of respondents’ comments are positive about business conditions and the economy. They also indicated that recent tax changes have had a positive impact on their respective businesses.
Excellent news for the economy and hopefully we will not see the volatility in the stock market have any negative effects on the economy. We can hope…
CFPB Puts Equifax Probe on Ice
Mick Mulvaney, head of the Consumer Financial Protection Bureau, has pulled back from a full-scale probe of how Equifax Inc failed to protect the personal data of millions of consumers, according to people familiar with the matter.
The Federal Trade Commission is examining the breach and the company may face financial penalties. The last time the FTC penalized a major credit bureau was in 2012, a $393,000 settlement with Equifax.
We see that the CFPB’s transformation from a consumer protection agency to a friend of big business continues. The good news is that the FTC is still looking out for consumers.
You must wonder if some of the functions of the CFPB are redundant since other government agencies are already tasked with investigating or enforcing consumer protections laws and regulations?
First-Time Homebuyers Still Face Headwinds
From St Louis Fed:
The number of first-time homebuyers has slowly started to slowly rebound after a significant drop since 2000. However, they still face some headwinds.
First-time homebuyers are essential to the dynamics of the housing market by allowing current homeowners to trade up. The number of first-time homebuyers plunged from 2000 until bottoming out around 2011 and 2012 for the U.S. and most of the states within the St. Louis Fed’s Eighth District.
Since 2011, the number of first-time buyers has increased 34 percent nationally.
Although increasing over the last several years, the number of first-time homebuyers is still much lower than the pre-2007 level, suggesting that tightened lending standards have been a headwind for first-time homebuyers.
Is it really that hard to buy a home because of tightened lending standards?
There are lots of people today thinking about if they should buy a home. Some might think they will not qualify for a mortgage because lending standards are too tight.
I can tell you what the typical first time home buyers look like according to NAR’s Profile of Home Buyers and Sellers:
You might not be exactly like the people that have already bought their first home. It isn’t whether or not you are like everyone else…
It is all about doing what is best for YOU!
Sitting down with a mortgage professional is the only way to figure out if buying a home is a good option for you! That being said, one of the biggest hurdles for home buyers is the down payment.
Did you know that according to NAR, 61% of first-time home buyers from October 2016 through November 2017 bought a home using a down payment below 6 percent?
Lots of people think that they need a 20% down payment to buy a home. This simply is not true! The median down payment for all home buyers last year was only 10 percent according to NAR!
Do not feel bad if you think that you need a 20% down payment to buy a home! Urban Institute recently released a report that revealed that “eighty percent of consumers either are unaware of how much lenders require for a down payment or believe all lenders require a down payment above 5 percent.”
There are plenty of options for home buyers that do NOT require a huge down payment. Something else to consider is your credit…
Quite a few people don’t understand or are wrong about the credit score needed to get a mortgage. Countless people think they must have a credit score of 780 or higher to buy a home.
This is NOT true! Check out this chart using data from Ellie Mae’s recent Origination Insight Report, that looks at recently approved mortgages:
Are you surprised to find out that 53.5% of approved mortgages had a credit score of 600-749?
As you can see, the required down payment and credit score to get a mortgage is not as restrictive as many think. It is possible that buying a home is within your reach!
I am a Realtor and not a mortgage lender so you will need to talk to the lender of your choice. I can tell you that talking to a lender is the one and only way to find out what is possible for you.
If you do not qualify today, a good lender will be able to tell you what you need to work on so you can buy a home in the future.
If you have any questions about buying a home in the Anderson SC area, please Contact Me!
Is the Fed’s Inflation Target Kaput?
As Jerome Powell prepares to take over as chairman of the Federal Reserve on Feb. 5, some of his colleagues are publicly agitating for a radical rethink of the central bank’s playbook for guiding monetary policy. Behind the push for reconsideration of the Fed’s 2 percent inflation target: a fear of running out of monetary ammunition in the next recession.
With interest rates near historically low levels—and likely to remain that way for the foreseeable future—these officials worry the Fed will have little leeway to aid the economy when a downturn inevitably hits. They argue that revamping the inflation objective beforehand could help counteract that. “The most important issue on the table right now is that we need to consider the possibility of a new economic normal that forces us to reevaluate our targets,” Federal Reserve Bank of Philadelphia President Patrick Harker said in a Jan. 5 speech.
Very interesting article with several suggested changes for what the Fed uses to guide their decision making process. I do wonder if the Fed can do much about inflation and if they can, can they cause too much inflation?
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