Discussing how the average home payment has increased so far this year, mortgage delinquencies and foreclosures, job growth expected to continue, rents still increasing, another lender screw up, the FTC and DOJ looking at the MLS again and much more!
Average Monthly Payment for a Median US Home Up 14%
From Black Knight:
Rising home prices and interest rates have increased the monthly payment on a median-priced home purchased with a 20 percent down payment by $150/month. Recent income growth – though better than long-term norms – has not been sufficient to keep up with rising rates and prices.
Ben Graboske, executive vice president of Black Knight Data & Analytics said:
Last month, we reported that January and February 2018 saw faster rates of monthly home price appreciation (HPA) than the start of any year since 2005. While the pace of annual home price growth slowed a bit in March, HPA is still around 6.5 percent.
We’ve also seen interest rates climb by nearly three-quarters of a percent so far this year. Together, those two factors have resulted in a $150 increase in the monthly payment on a 30-year mortgage used to purchase the median-priced U.S. home, about a 14 percent rise since the start of 2018.
Stronger-than-average income growth in recent years still hasn’t been enough to keep up with rising HPA and interest rates. Seven states are now less affordable than their long-term norms and another 12 are close to hitting that point. Though much of the country remains more affordable than long-term norms, the current trajectory would change that sooner rather than later. We’ve modeled out multiple economic scenarios, some more conservative than others, and even with historically strong income growth, the current combination of home price and interest rate increases isn’t sustainable.
Not good news for anyone looking to buy a home. I have to agree that the combination of increasing home prices and mortgage rates is not sustainable.
I still do not think we will see home prices decrease but we will see the number of sales decrease and the rate that home prices are increasing will slow down. Of course, how much of a slowdown in sales is due to higher rates/prices or the low inventory issue is hard to say…
Black Knight also reported on the latest mortgage delinquents and foreclosure numbers:
While the increase in monthly payments is bad, the data from Black Knight for mortgage delinquencies and foreclosures is very good.
Why America is the World’s First Poor Rich Country
From Eudaimonia and Co:
Consider the following statistics. The average American can’t scrape together $500 for an emergency. A third of Americans can’t afford food, shelter, and healthcare. Healthcare for a family now costs $28k — about half of median income, which is $60k.
By themselves, of course, statistics say little. But together these facts speak volumes. The story they are beginning to tell is this.
America appears to be pioneering a new kind of poverty altogether. One for which we do not yet have a name. It is something like living at the knife’s edge, constantly being on the brink of ruin, one small step away from catastrophe and disaster, ever at the risk of falling through the cracks. It has two components — massive inflation for the basics of life, coupled with crushing, asymmetrical risk.
The kind of poverty America’s pioneering today isn’t absolute, or even relative , but something more like perfectly tuned poverty, strategic poverty, basic poverty— nominally well-off people whose money doesn’t go far enough to make them actually live well, constantly living at the edge of ruin, and thus forced to choke down their bitter anger and serve the very systems which oppress and subjugate with more and more indignity and fear and servility by the year.
And you know who you can count on to do something about this?
You and only you.
It is up to each of us to work hard and do what we can so that we are no longer dependent on the soul crushing system. Harder than it sounds I know but it can be done with hard work and sacrifice..
Stop spending money on crap you don’t need. Create a budget and stick to it. Get a second job if you must.
But don’t give up! A journey of a thousand miles starts with just one step.
Solid Job Growth to Continue
From The Conference Board:
The Conference Board Employment Trends Index™ (ETI) decreased in May, after five consecutive monthly gains. The index now stands at 107.69, down from 108.00 (a downward revision) in April. The change represents a 3.9 percent gain in the ETI compared to a year ago.
Strong growth compared to the same time last year so I am not freaking out about the small decrease from the previous month. Always look for trends and not blips…
Gad Levanon, Chief Economist, North America, at The Conference Board said:
The decline in the Employment Trends Index in May is probably a reversion to trend after the very rapid increases in recent months. With the economy growing well above trend, we expect solid job growth to continue despite the difficulty in filling job openings.
I hope Levanon is correct about job growth continuing but I still think we need better income for ALL Americans…
Especially after seeing how the average monthly mortgage payment has increased according to Black Knight!
Rents Increase 1.5% YoY
From Apartment List:
Our national rent index increased by 0.4 percent over the past month as we begin to enter the peak rental season. Year-over-year growth currently stands at 1.5 percent, falling below the levels from the two prior years.
Our national rent index has now increased for each of the past four months, with a total increase of 0.9 percent over that period.
Good news for any renters that unable or not ready to take on the wealth building advantages of owning a home. This could make it somewhat easier for renters to pay off debt or to save money for buying a home.
Lender Accidentally Declares Mortgages Delinquent
Home Point Financial, a mortgage lender backed by private equity firm Stone Point Capital, said it accidentally reported to credit bureaus that some loans were delinquent, even though bills were paid on time.
The Ann Arbor, Michigan-based firm cited a system error that transmitted a test file to the credit companies, and declined to say how many customers were affected. People have complained on social media that their credit scores dropped more than 100 points as a result of the misstep.
While this is bad, at least Home Point didn’t try to sweep this under the rug or blame the customers. Considering how important it is to have good credit, I would be highly pissed if this happened to me.
The thing is that Home Point could take this as an opportunity to create raving fans by going above and beyond in fixing this. Happy customers are the best advertising…
FTC and DOJ Looking at MLS Again
It has been about 10 years since the DOJ and NAR came to an “understanding” that lead to VOWs. But it appears the FTC and the DOJ is once again on the warpath…
This is why the Council of Multiple Listing Services has has published a white paper as input to the Federal Trade Commission (FTC), Department of Justice (DOJ), and interested industry participants about the critical pro-competitive role of Multiple Listing Services (MLSs).
From the whitepaper:
On April 5, 2018, the Federal Trade Commission (FTC) and Department of Justice (DOJ) announced they would hold a joint workshop on June 5, 2018, to “explore competition issues in the residential real estate brokerage industry. As part of the workshop, the FTC and DOJ are seeking public comment.
The approximately 630 MLSs in the United States play a critical role in the market for residential real estate sales. The history of MLS over the past 20 years, but in particular the last 10, shows that MLSs seek to facilitate adoption of new technologies and content distribution without prompting from regulators. MLSs are essential conduits powering the MLS function and distribution of listing data content to brokers, consumer-facing listings websites and mobile applications, and third-party sites and apps— all increasing availability of listing information to consumers and the brokers who serve them.
Do you think there are competition issues in residential real estate? I have seen many different changes in the past 10 years that increase the amount of information available to consumers.
We are even seeing Zillow trying the “We Buy Houses” business model. We have the MLS of choice change. There are many different business models for real estate brokerages to use today.
I think the FTC and DOJ could make better use of their time and tax payer money…
Companies to Pour $2.5 TRILLION Into Buybacks, Dividends, M&A in 2018
Money is pouring into the U.S. economy and in turn helping provide support for the otherwise struggling stock market.
If current conditions persist, corporations are likely this year to inject more than $2.5 trillion into what UBS strategists term “flow” — the combination of share buybacks, dividends, and mergers and acquisitions activity.
The development comes as companies find themselves awash in cash, thanks primarily to years of stashing away profits plus the benefits of a $1.5 trillion tax break this year that slashed corporate rates and encouraged firms to bring back money idling overseas. Companies have nearly $2.5 trillion in cash parked domestically, according to the Federal Reserve, and as much as $3.5 trillion overseas, various estimates have shown.
Nice to see all the money from the tax break being used for job creation and increasing wages….
Facebook Helping to Discriminate Against Older Job Seekers
Older workers are accusing Facebook, Ikea, and hundreds of other companies for discriminating against job seekers in their 50s and 60s through targeted job ads posted on Facebook.
The lawsuit revolves around Facebook’s unique business model, which lets advertisers micro-target the network’s users based on their interests, city, age, and other demographic information. In the past, equal rights advocates have sued Facebook for accepting ads that discriminate against consumers based on their religion, race, and gender.
In the age discrimination case, plaintiffs want the court to order these companies, including Facebook itself, to stop posting job ads that filter out older workers. They argue that it’s a violation of the Age Discrimination in Employment Act of 1967, which makes it illegal to discriminate against workers over the age of 40 in employment advertising, recruiting, hiring, and other employment opportunities.
I am sure we will hear lame excuses from Fecesbook as they say it is the fault of the people placing the ads if any discrimination took place. But Fecesbook has a pretty pitiful track record of abusing it’s users…
Well that is all I have time for today! Be sure to share this post if you enjoyed it and subscribe for free email notifications when there is a new post!