Talking about Freddie Mac’s serious delinquency rate, mortgage servicers still screwing consumers over, weak GDP, home ownership levels and more…
The Census Bureau just reported that the homeownership rate in Q1 2017 was 63.6%. This is up slightly from Q1 2016 (63.5%) but down slightly from Q4 2016 (63.7%). Check out the chart:
Not really enough of a change from either the Q1 2016 or Q4 2016 to get excited about. But then I saw an article on Bloomberg:
The U.S. homeownership rate is finally poised to rise significantly as household formations by owners grew faster in the first quarter than those by renters — the first time that’s happened in more than a decade.
While the share of Americans who owned their homes was up only slightly from a year earlier, at 63.6 percent, the number of new owners jumped by more than 850,000, compared with an increase in renter households of 365,000. The 1.1 percent year-over-year gain in owners was also the biggest since 2006
Are we seeing a shift in the number of renters and home owners? Too early to say but let’s keep our fingers crossed!
Should You Switch From Renting to Owning?
With rents increasing across and becoming less affordable, maybe you are thinking about buying a home. Although the cost of a house as well as the related expenses could be scary after renting, let’s look at some reasons you really should think about switching from renting to owning!
The money give the landlord every month is gone as soon as pay the rent. But putting your hard earned money into a house every month ensures that you’re putting it into something that you could use later. Even though there are no guarantees that the value of your property will increase, there’s a high probability you’ll make a profit that should cancel out the expense of insurance, maintenance, and taxes that come with owning a home.
The Uncertainty Of Renting
The advantage of owning a home is it gives you the freedom of having something that belongs to you. You probably won’t have to be worrying as much about your next door neighbors or a landlord that never fixes anything ina timely manner. Plus you can make you home match your personal style and tastes!
You Can Think About a Roommate
A rental could mean a smaller place to live but it’s entirely possible that you can buy a larger home. A with the extra room, you could rent a room to help with the monthly bills. This can be a good way to make owning a house less expensive while giving you the ability to build wealth!
Plus, owning gives you the option to help out a friend or family member that needs a place to stay! You don’t have to ask the landlord or sign a new lease. All you have to is open your door and tell them to come on in!
With rent continuing to increase dramatically, buying a house is becoming a more attractive option for lots of people. If you’re serious about what exactly is available in the Anderson area and wondering about owning a home, you should contact me!
Freddie Mac Seriously Delinquent Rate Decreased
Freddie Mac reported this week that their single-family seriously delinquent rate decreased from 0.98% in February 2017 to 0.92% in March 2017. Their single-family seriously delinquent rate was 1.20% in March 2016.
They also said that their multifamily delinquency rate remained flat at 0.03% in March. The multifamily delinquency rate in March 2016 was 0.04%.
This doesn’t sound impressive but it is yet another step in the right direction.
Through its supervisory activities, the Consumer Financial Protection Bureau has determined that some mortgage servicers are failing to provide adequate legal protection to struggling borrowers and have therefore violated the law. According to the Bureau’s Supervisory Highlights report released on Wednesday, CFPB examiners also found that some servicers mishandled escrow accounts, kept borrowers in the dark about their potential foreclosure prevention options, prematurely entered the foreclosure process, and sent incomplete bills and statements.
Sadly, the CFPB doesn’t name names in the report. If the CFPB ceases to exist or is made powerless, who will protect consumers from this type of behavior?
Economy Expands at Slowest Pace in 3 Years
Real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the first quarter of 2017, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2016, real GDP increased 2.1 percent.
The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed investment, exports, residential fixed investment, and personal consumption expenditures (PCE), that were offset by negative contributions from private inventory investment, state and local government spending, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter reflected a deceleration in PCE and downturns in private inventory investment and in state and local government spending that were partly offset by an upturn in exports and accelerations in both nonresidential and residential fixed investment.
GDP is short for gross domestic product and refers to the value of the goods and services produced by the nation’s economy minus the value of the goods and services used up in production. This is the “advance” estimate so we will have to wait until next month to get the final number.
That being said, this is pitiful and slower than expected. While this is mainly due to weak consumer spending and seems to be a pattern of weak first quarter since the recovery began.
However, residential investment did increase at a healthy pace so there was some good in this weak report. Residential fixed investment increased 13.7% and residential investment contributed 0.5 percentage point to the quarter’s growth rate.
From Richmond Fed:
Firms in North Carolina and South Carolina remained upbeat in April. The general business conditions index improved notably — from 30 in March to 40 in April — as did the sales index, which increased from 18 to 44. In fact, the only current conditions index to show a decline was the employment index, which also remained strong with a reading of 19 in April. A higher share of firms in the Carolinas reported an increase in average workweek and an increase in wages. In addition, more firms reported spending increases, with the indexes for business services expenditures, capital expenditures, and spending on equipment or software all rising.
Looking ahead six months, most indexes for expected conditions remained strong. The largest changes were in the index for expected employment, average workweek, and wages.
Price growth changed little in April, according to firms in the Carolinas. Growth in prices paid for inputs did rise slightly from 1.34 in March to 1.67 in April. But growth in prices received for outputs grew only from 1.16 percent to 1.21 percent. Expected price growth variables also remained very similar to March levels.
I shared yesterday that the Richmond Fed had positive reports for both the manufacturing and service sector in the Fifth District (we are in the Fifth District). And this is just the icing on the cake!
That’s it for today!