Talking about the if the housing market is too hot, the number of underwater homes decreasing, mortgage rates and more…
From ATTOM Data Solutions Q1 2017 U.S. Home Equity & Underwater Report:
As of the end of the first quarter of 2017 there were nearly 5.5 million (5,497,771) U.S. properties seriously underwater — where the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value — up from 5.4 million seriously underwater properties in Q4 2016 but still down by more than 1.2 million from the 6.7 million seriously underwater properties in Q1 2016.
The 5.5 million seriously underwater properties at the end of Q1 2017 represented 9.7 percent of all U.S. properties with a mortgage, up from 9.6 percent in Q4 2016 but down from 12.0 percent in Q1 2016.
Great news but there are still too many homes that are still underwater. And with the news that 19% of HELOCs to reset in 2017, this could become a problem.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.23% from 4.20%, with points decreasing to 0.32 from 0.37 (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 4.18% from 4.15%, with points decreasing to 0.23 from 0.27 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.51% from 3.46%, with points decreasing to 0.32 from 0.50 (including the origination fee) for 80 percent LTV loans.
Remember this is talking about the average mortgage rates and you may get a higher or lower rate depending on your credit, type of mortgage you select, etc etc.
Private sector employment increased by 177,000 jobs from March to April according to the April ADP National Employment Report®.
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute said:
In April we saw a moderate slowdown from the strong pace of hiring in the first quarter. Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labor market nears full employment. Looking across company sizes, midsized businesses showed persistent growth for the past six months.
Mark Zandi, chief economist of Moody’s Analytics said:
Job growth slowed in April due to a pullback in construction and retail jobs. The softness in construction is continued payback from outsized growth during the mild winter. Brick-and-mortar retailers cut jobs in response to withering competition from online merchants.
Good news despite the slowdown in job growth.
Economic activity in the non-manufacturing sector grew in April for the 88th consecutive month according to the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
In April, the NMI® registered 57.5 percent, 2.3 percentage points higher than the 55.2 percent registered in March, indicating continued growth in the non-manufacturing sector for the 88th consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.
An NMI® above 48.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the April NMI® indicates growth for the 93rd consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 88th consecutive month.
Good news and it is nice to see this trend continue.
When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.
We found that the majority of homes in the U.S. have not recovered to their pre-recession peak, but several markets have either fully recovered, or not recovered much at all.
More or less, this is a fancy way of saying you should always look locally to find out what is happening in your real estate market. I am guilty of sharing national housing reports far too often. But then again, I have weekly for Anderson County SC…
And even these reports only give a glimpse of what is happening. You really have to compare a specific house against all the recently sold homes that are similar and located close by. And you need to look at the active listings for homes that are similar.
Determining the market value of a home and the best initial list price is something a website such as Zillow cannot do. And national reports do not always translate into what is happening in each local real estate market across the US.
Ben Carson does not like the creature comforts, at least not for low-income Americans reliant on the government for a helping hand. Compassion, Mr. Carson explained in an interview, means not giving people “a comfortable setting that would make somebody want to say: ‘I’ll just stay here. They will take care of me.’”
When Mr. Carson assumed the helm of the Department of Housing and Urban Development, he had no government experience, no political experience beyond a failed bid for the Republican presidential nomination and no burning desire to run a major federal bureaucracy. But his views on poverty alleviation were tough-minded and well-known, informed by his childhood in Detroit and his own bootstraps journey from Motor City urban grit to the operating theater of Johns Hopkins University.
While I understand what Carson is saying, I am concerned that any changes must be done in a manner to ensure those that truly deserve help get it. On the other hand, people that abuse or use the system shouldn’t get to live in government housing.
In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 3/4 to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.
Remember that the Fed does not determine mortgage rates. That being said, it does mean that one factor that could cause rates to increase isn’t going up for now.
U.S. railroads originated 1,023,300 carloads in April 2017, up 8.4 percent, or 78,949 carloads, over April 2016. U.S. railroads also originated 1,052,001 containers and trailers in April 2017, up 2.3 percent, or 23,448 units, from the same month last year. Combined U.S. carload and intermodal originations in April 2017 were 2,075,301, up 5.2 percent or 102,397 carloads and intermodal units over April 2016.
Total U.S. rail traffic for the week ending April 29, 2017 was 527,830 carloads and intermodal units, up 5.1 percent compared with the same week last year. Total carloads for the week ending April 29 were 258,476 carloads, up 6 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 269,354 containers and trailers, up 4.2 percent compared to 2016.
Nice! The tightening of lending standards for cars did cause rail shipments of motor vehicles and parts to fall again in April. If this didn’t happen, the numbers would have been even stronger.
Freddie Mac: Mortgage Rates Hold Steady
- 30-year fixed-rate mortgages averaged 4.02% with an average 0.5 point
- This is down from last week when it averaged 4.03&
- Last year at this time, 30-year fixed-rate mortgages averaged 3.61%
- 15-year fixed-rate mortgages averaged 3.27% with an average 0.5 point
- This is the same as last week
- Last year at this time, 15-year fixed-rate mortgages averaged 2.86%
Just like I said above, these are the average rates and you need to talk to a lender to see what is possible for you!
Ninety percent of CEOs responding to a Business Roundtable survey say that delaying tax reform will harm the U.S. economy by causing slower economic growth, hiring and capital investment. Fifty-seven percent of the responding CEOs say delaying tax reform means their company will delay capital spending, the investment that drives jobs and growth. Fifty-six percent say their companies will delay hiring plans.
Successful reform, however, will mean more jobs, investment and growth in the U.S. economy, the survey finds. Eighty-two percent of CEOs say that reform will prompt companies to increase capital spending, and 76 percent will increase hiring, the CEOs report. Seventy-seven percent say reform will improve their company’s global competitiveness.
So how likely do you think it is that we will see tax reform? It sure would be nice to see more jobs, investment and economic growth. But my faith in our elected official making anything good happen is very slim…
A Glenview lawyer sued Zillow, alleging that the real estate site’s relatively modest estimate of her home’s value has created a “roadblock” to selling at what she thinks it’s worth.
Zillow’s estimate, known by the trade name “Zestimate,” is “effectively a sloppy computer-driven appraisal” of the value of her home, Barbara Andersen says in a complaint suit she filed late last week in Cook County Circuit Court.
As of yesterday, her asking price was $626,000 for the three-bedroom townhouse, but Zillow’s Zestimate was about $555,000.
I have to laugh when I hear someone get upset by how bad the Zestimates can be. If you want to know what your home’s value, please don’t rely on Zillow!
Is the Housing Market Too Hot?
You may have heard the phrase “housing bubble” again. Some industry experts are wondering if the current rate of residential home sales is too hot. This leads us to wonder if too many people are purchasing homes like back in 2004-2006? Are we in another housing bubble and if so, will it “pop”? The truth is, if we look at the statistics, we will realize that we are actually experiencing a very healthy real estate market.
Some people are comparing the last 4 years of home sales to the 3 years right before the housing bubble. If you look at the chart below, you can see why people think the housing market is too hot:
But, if we look further back, we can start to see the true picture. If we “ignore” the “boom & bust” period, the rate of home sales is increasing at a normal speed. Check out the chart:
I would even suggest that home sales should be higher than since the population has grown since 1990. And home sales are also lower because of the low inventory in some areas.
So when you hear we are in another housing bubble, think about these charts and how the population has grown. Think about how the low level of homes for sale means sales are lower.
Do not let fear, uncertainty or doubt stop you from doing what is best for you!
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