Discussing Small Business confidence, mortgage delinquencies and the foreclosure rate, a hot summer in real estate and much more…
Small business confidence shot up to near record levels last November and is still flying high, according to the latest National Federation of Independent Business (NFIB) Index of Small Business Optimism.
The Index for May matched its strong performance in April of 104.5. That means the Index has been at a historically high level for six straight months. Five of the Index components posted a gain, four declined, and one remained unchanged.
Small business owners hit the hiring pavement with a surge, reporting an adjusted average employment change per firm of 0.34 workers per firm over the past few months. Few readings in the past 43 years of the survey have been higher.
Over all, a very positive report. Let’s hope the streak continues!
Mortgage Delinquency Rate Falls to a 10-Year Low
From CoreLogic’s latest Loan Performance Insights report:
The 30-plus delinquency rate, the most comprehensive measure of mortgage performance, is near a 10-year low. The share of mortgages that transitioned from current to 30-days past due was 0.6 percent in March 2017, down from 0.7 percent in March 2016 and the lowest for any month since January 2000.
By comparison, in January 2007, just before the start of the financial crisis, the current to 30-day transition rate was 1.2 percent and peaked in November 2008 at 2 percent.
Frank Nothaft, Chief Economist at CoreLogic said:
Early-stage mortgage performance continues to improve at a steady pace, especially for 30-59 day delinquencies which fell to 1.7%, the lowest rate for any month since January 2000. Late-stage serious delinquency rates continue to decline, falling to their lowest levels since November 2007.
Folks, this is some seriously good news. In South Carolina, CoreLogic said that the 30+ Days Delinquent, 90+ Days Delinquent and Foreclosure rate all improved compared to the same time period in 2016.
With spring and summer rolling in, REALTORS® expect the conditions in the single-family homes market outlook in the next six months to be “strong” to “very strong” in all states and “moderate” in the District of Columbia, based on the April 2017 REALTORS® Confidence Index Survey Report.
I agree and must caution buyers to expect stiff competition for the good homes. Sellers need to understand this does not mean they can over price their homes. Speaking of correctly pricing a home…
Time to Look at the Price of Your Home for Sale?
The real estate market in Upstate SC area is hot hot hot. If we look at the latest statistics for May 2017 in our area, we will see that home sales were almost 3 times the amount way back in February 2010.
Not only that, the average days on market tied last months 71 days. 71 days is the lowest it has been since January 2013, when I started tracking the average days on market!
Demand is strong and inventory limited. If your house is for sale and you have not got any offers, it is time to look at the list price!
The best time to list your correctly is day one! If you mucked that up, TODAY is the next best time to get realistic about your home’s price!
Listing your property 10% higher than it should be significantly reduces it’s visibility!
I was looking at a home I have listed in Anderson just last night. I looked at the recently sold homes, the active competition and even the similar homes that did not sell. We are still right where we need to be which is great because today’s buyers are too smart to over pay!
The real estate market is smoking hot. If you aren’t getting the result you desire, it’s time for a “come to Jesus talk” with your Realtor about the list price of your home. If you are thinking about selling your home in the Anderson SC area and have any questions, you can contact me!
Does a Fed Rate Increase Matter to Housing?
With the Federal Reserve Open Market Committee (FOMC) meeting to decide whether to increase the Federal Funds rate in just a few days, the potential for an increase in mortgage rates dominates the housing news and industry chatter. Yet, changes to the short-term rate matter little to the housing market.
The truth is changes to short-term interest rates, like the Federal Funds rate, tend to have very little influence on mortgage rates. That’s because mortgage rates, particularly the very popular 30-year, fixed-rate mortgage, are benchmarked to the 10-year Treasury bond. A wide range of global political and economic factors can influence the yield on long-term bonds, such as the ten-year Treasury bond.
Very true BUT we do have to be concerned about other possible negative implications coming from the Fed raising their benchmark rate. This is why buyers need to have a really good mortgage lender who helps them get the best possible mortgage at the best possible rate…
We have heard that mortgage rates are going to increase for so long it has become almost funny. The experts all said that 2017 was the year that mortgage rates would go up.
After many years of historically low rates, as well as an improving economy, the question wasn’t if rates would increase but how much! Some of the experts predicted that mortgage rates would increase to 5-5.5% by the end of 2017.
Yet, the complete opposite has occurred. Rather than higher interest rates, we’ve got the best mortgage rates of the year according to Freddie Mac. Check out the chart of mortgage rates since the beginning of 2017:
Obviously we have been lucky so far. But Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are still predicting that mortgage rates will increase by the end of 2017:
Hey, nobody knows with 100% certainty what the future holds or what mortgage rates are going to be like in 6 months. But if you are thinking about buying a home, you can still get a historically low mortgage rate NOW!
Inflation’s Effects on the Housing Market
Inflation, the economic term which refers to the de-valuation of your money, can sound like a blaring car horn to the ears of many investors. While its consequences are simple enough— a rise in the cost of goods and services— it’s also comprised of many less obvious negative aspects as well. For example, the direct effect that it has on the housing market (which includes impacting the many financial aspects involved in buying an investment home).
So what are some of the effects? They mentioned increased construction costs, higher home prices and fewer people getting mortgages. But they also said:
With inflation slowly rising, now is an ideal time to invest in an asset class that can provide a hedge against it. By doing so, you’re protecting your portfolio with a smart investment expected to maintain or increase its value over a specified period of time. In fact, residential rental homes even tend to increase in value during times of prolonged inflation.
Investing in rentals isn’t for everyone. But there is no doubt that real estate is a great way to build wealth and invest. The demand for rentals is strong and I doubt it will decrease much in the coming years. If anything, the demand for rentals will grow…
Appraised values were an average of 1.93 percent lower than what homeowners expected, according to Quicken Loans’ National Home Price Perception Index (HPPI). The gap between estimated value and appraised value, on a national level, continued to widen for a sixth consecutive month.
Home owners may not like what the appraiser says, but it is going to realistic, accurate and impartial. If it does not appraise, the bank will not lend. Remember, correct pricing is essential to sell a home quickly and for top dollar.
Do you want to list your home or sell it?
That’s it for today!