Real estate housing and economic news for March 21 2017…
Gallup’s U.S. Economic Confidence Index remained firmly in positive territory at +11 for the week ending March 19. The score is in line with most weekly results since Americans’ economic attitudes improved in mid-November, but is five points below the index’s nine-year high reached two weeks ago.
Though the index exhibited gradual, if uneven, progress over most of Barack Obama’s presidency, it turned positive shortly after Donald Trump’s election last November and has since remained positive for 18 consecutive weeks. This is the longest period of positive economic confidence since Gallup began daily tracking in 2008.
Let’s hope this positive attitude turns into a robust housing market this Spring!
Federal Reserve officials sometimes sound out of touch when they describe the labor market as having reached “full employment” when most Americans know full well that the outlook for jobs is still far less rosy than it was before the Great Recession.
A new study published by the San Francisco Fed offers a window into one source of that disconnect: low labor-force participation that reflects not only an aging population but also a significant number of people who have technically but not actually “dropped out” of the labor force and are no longer counted. They still want a job but are not actively looking in a formal sense because prospects became so dire.
The US labor force had already been shrinking for some time, but the decline accelerated during the downturn of 2007-2009. The San Francisco Fed’s research tries to isolate the impact of demographic shifts such as an aging population on the jobless rate, thereby distinguishing it from the labor-force effects.
Do you think we have reached full employment? I have never understood why people are “dropped out” of the labor force?
Why would the government want to “adjust” the numbers?
The Federal Reserve is on track to raise interest rates twice more this year after a policy tightening last week, and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration.
The public comments from Chicago Fed President Charles Evans were among the first since the U.S. central bank lifted its policy rate a notch last week, as expected. It also forecast roughly two more moves in 2017 in a nod to low unemployment and some inflation pressures.
“Three is entirely possible,” Evans, speaking on Fox Business Network TV, said of hikes in 2017. “As I gain more confidence in the outlook I could support three total this year. If inflation began to pick up, that would certainly solidify (that expectation). It could be three, it could be two, it could be four if things really pick up.”
Has the economy improved enough to warrant this many rate increases? Or is this politically motivated?
And most importantly, what is going to happen with mortgage rates? Could 2017 be the year that we finally see mortgage rates increase back to more historically normal levels?
The makers of TurboTax and other online systems spent millions lobbying last year, much of it directed toward a bill that would permanently bar the government from offering taxpayers prefilled filings.
Have I mentioned how much I hate doing my taxes. It is so much more complicated than it needs to be. If Trump wants to cut government regulations, why not look at reforming the income tax system?
BofA Completes It Obligations to Provide $7 Billion in Consumer Relief
From Independent Monitor Eric D. Green’s report:
In my eighth and final report monitoring the performance of Bank of America under its Settlement Agreement with the United States Department of Justice and six states, I am pleased to confirm that Bank of America has completed its obligations to provide $7 billion of credited Consumer Relief. The Bank has earned, in total, $7,005,373,353 of credit for Consumer Relief delivered under the Settlement Agreement, attributable to 134,990 creditable actions.
While it is great that BofA paid for their evil ways, I must again say that until bank executives do hard time, we cannot expect to see a change in bank behavior.
From Dr. Frank Nothaft, chief economist for CoreLogic:
Mortgage loans closed during the final three months of 2016 had characteristics that contribute to relatively low levels of default risk. While our Index indicates somewhat less risk than a quarter and a year earlier, this partly reflects the large refinance share of fourth quarter originations. Refinance borrowers typically have a lower LTV and DTI than purchase borrowers.
CoreLogic also said:
- New loan risk is down
- Credit scores for the bottom 1% have increased to 628
- 48% of home purchase loans have a loan-to-value of 95% or above
- 26% of loans had a debt to income of 43% or higher
Does not exactly sound less risky other than the increase in credit scores.
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