Discussing the latest report on economic confidence, missing boomerang home buyers, home prices, mortgage rates and much more…
Economic activity in the non-manufacturing sector grew in May for the 89th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
Anthony Nieves, Chair of the IISM® Non-Manufacturing Business Survey Committee said:
Although the non-manufacturing sector’s growth rate dipped in May, the sector continues to reflect strength, buoyed by the strong rate of growth in the Employment Index. The majority of respondents’ comments continue to indicate optimism about business conditions and the overall economy.
Good news, especially with all the bad news about retail lately.
A federal judge June 2 blocked Ocwen Financial Corp.’s bid to test the constitutionality of the Consumer Financial Protection Bureau in the early stage of a closely watched enforcement case ( Cons. Fin. Protection Bureau v. Ocwen Fin. Corp. , S.D. Fla., 17-cv-80495, 6/2/17 ).
The ruling by Judge Kenneth Marra of the U.S. District Court for the Southern District of Florida allows the CFPB to proceed unimpeded with its April lawsuit alleging that Ocwen violated consumer protection laws in servicing loans of distressed borrowers.
While this is a loss for Ocwen, if those opposed to the CFPB have their way, this victory won’t mean much. I wonder what happens if the CFPB ceases to exist?
While I am not fan of over regulation or government bureaucracies, recent history shows we need someone to look out for consumers…
Though still historically high, Americans’ confidence in the economy fell to a six-month low in May, largely dragged down by Democrats’ worsening economic attitudes.
Even as some Americans become more pessimistic about the economy overall, attitudes about the economy’s current conditions have been relatively stable. Last month, 32% of Americans assessed the economy as “excellent” or “good,” while 22% said the economy was “poor.”
Meanwhile, perceptions about the economy’s outlook have more clearly deteriorated. In May, slightly more Americans (49%) said the economy was “getting worse” than said it was “getting better” (45%).
While you never know what the future holds, I am still pretty confident about the economy and the upcoming year. Yes, the tight inventory of homes for sale is seriously hurting some markets. I am amazed at how tight inventory is in some areas and price ranges in Upstate South Carolina.
A foreclosure is a serious black mark on a consumer’s credit report, making mortgages and other types of credit more expensive to obtain. But most negative credit information is erased after seven years, so, in theory, homeowners who experienced a foreclosure during the first few years of the crisis should have the damage to their credit behind them now. As those foreclosures began to clear, many observers speculated that a slew of “boomerang buyers” was poised to return to the housing market.
Those buyers have been slow to materialize, which might seem surprising in light of rising home prices and reports of bidding wars in many areas of the country. Higher prices, however, appear to reflect a relatively low supply of housing rather than a surge in demand. To the extent the housing market contributes to GDP, the absence of boomerang buyers could have implications for near-term economic growth in the United States. So what’s hindering
I cannot tell you how many times I heard that all these people that were foreclosed on were going to flood the market…
And I rolled my eyes because I knew that some would have been completely soured by the foreclosure ordeal. I knew that some would never buy a home again simply because of the way they got screwed over by the banks, mortgage servicers, and court system.
This is an excellent report and today’s must read!
Home prices nationwide, including distressed sales, increased year over year by 6.9% in April 2017 compared with April 2016 and increased month over month by 1.6% in April 2017 compared with March 2017 according to the latest CoreLogic Home Price Index.
CoreLogic is predicting that US home prices will increase by 5.1% on a year-over-year basis from April 2017 to April 2018, and on a month-over-month basis home prices are expected to increase by 0.7% from April 2017 to May 2017.
Dr. Frank Nothaft, chief economist for CoreLogic said:
Mortgage rates in April dipped back to their lowest level since November of last year, spurring home-buying activity. In some metro areas, there has been a bidding frenzy as multiple contracts are placed on a single home. This has led home-price growth to outpace rent gains. Nationally, home prices were up 6.9 percent over the last year, while rent growth for single-family rental homes recorded a 3 percent rise through April, according to the CoreLogic Single-Family Rental Index.
Home buyers can expect to stiff competition for homes that are priced correctly in our area. This does NOT mean that sellers can overprice their homes…
ATTOM Data Solutions and UtilityScore just released a joint white paper titled “Power Conversion” that analyzes the impact of utility costs on overall housing costs, home affordability and home seller profits:
Monthly utility costs require 7.0 percent of average wages on average across 931 U.S. counties analyzed for the white paper. When utility costs are included, buying a median-priced home requires more than the 43 percent of income recommended by the Consumer Financial Protection Bureau (CFBP) in 323 of the 931 counties (35 percent). That’s 122 more counties exceeding the CFPB affordability threshold than when utility costs are not included.
This is why how well a home is insulated and how it is heated / cooled is so very important. Look at the windows and doors since they can be huge sources for energy loss.
You may find that some bargain priced homes are NOT such a bargain once you consider how much it costs to heat and cool it!
The Consumer Financial Protection Bureau is conducting an investigation into alleged improprieties in Wells Fargo’s mortgage fee practices.
The CFPB is looking into allegations, first reported by ProPublica in January, that the bank inappropriately charged customers fees to extend their promised interest rates when their paperwork was delayed. The CFPB probe is in its early stages, according to a person familiar with it, and there is no certainty that the agency will take action. The CFPB has the power to levy fines and seek restitution if it finds a financial firm has violated the law.
I guess you can see why the banks and big financial institutions are wanting to see the demise of the CFPB…
The Business Roundtable CEO Economic Outlook Index reached its highest level in three years, since the second quarter of 2014. The Index in the second quarter of 2017 increased from the first quarter of 2017. For the second quarter in a row, the Index was above its historical average.
CEO plans for capital investment rose by 4.6 points from the last quarter, while expectations for sales stayed steady, increasing by 0.5 point. Plans for hiring for the next six months dropped a modest 3.3 points. CEOs project 2.0 percent GDP growth in 2017, down two-tenths from their projection for 2017 made in March.
Check out the chart of highlights:
This is great news and hopefully will translate into more economic growth. Remember, we must have a sound economy for the housing market to be healthy!
Mortgage applications increased 7.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 2, 2017.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.14% from 4.17%, with points increasing to 0.34 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This is the lowest level for 30-year fixed-rate mortgages with conforming loan balances since November 2016!
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.08% from 4.11%, with points decreasing to 0.21 from 0.30 (including the origination fee) for 80 percent LTV loans. This is the lowest level for 30-year fixed-rate mortgages with jumbo loan balances since November 2016!
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.39%, from 3.42%, with points increasing to 0.43 from 0.39 (including the origination fee) for 80 percent LTV loans. This is the lowest level for 15-year fixed-rate mortgages since November 2016!
While the decrease in rates is great news, please remember these are the average mortgage rates. You may do better or pay a higher rate and you can ONLY find out what is truly possible for you by talking to a real live human mortgage lender!
NAHB commissioned a nationwide survey by the polling firm Morning Consult of more than 11,300 registered voters earlier this year that found more than 70 percent of these respondents place a high value on homeownership.
Great but we still must work on ensuring ALL Americans can obtain the American Dream. Political bickering and grandstanding will not improve the situation. Insulting posts and outright lies on social media do not help either…
Let’s work together to make America better than ever before…
The count of unfilled jobs in the construction sector climbed in April, rising to the highest level since September of last year. According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) stood at 203,000 in April.
The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.
Sad that we keep hearing about the problems that builders are having finding workers. With the tight inventory of homes for sale, the last thing we need is anything stopping home construction.
Mark Fleming, chief economist at First American:
Overall, confidence among title agents and real estate professionals in transaction volume growth in the coming year swelled this quarter, surging 9.1 percent. The increase was driven by the rise in expectations for both purchase transactions and refinance transactions amid persistent low mortgage rates.
Like I said earlier, I am pretty confident about the economy and the coming year. But as I always say, hope for the best but plan for the worst…
In the last half century, economic, political and social changes have altered not only the makeup of the workforce, but also what it takes to get a job and support oneself, let alone a family.
It amazes how some arrogant pricks think that anyone not doing well has no one to blame but themselves…
Once dominant industries, like manufacturing – which paid well even without a college degree – have been overtaken by service sector jobs, most of which are low-paying, according to the Bureau of Labor Statistics. At the same time, knowledge-based jobs, which exclude lower-skilled workers, are continuing to grow.
As someone that worked in manufacturing for many years, it is sad to see this change. However, there is a dire need for construction workers. While this may be a step down in pay for some, it can pay more than the service sector.
The cost of getting a college degree is up more than 1,000% since 1978, according to Bloomberg. Millennials are saddled with more student loan debt and, despite being more educated, earned 20% less in 2013 than Boomers did at their age in 1989, adjusted for inflation.
I feel for those that have huge student loans to pay off. Or even worse, those that have a useless degree and huge student loans.
Decades of stagnant wages mean both parents must often work to make ends meet, creating a need for child care and elder care that didn’t exist in 1950, for example, when two-thirds of women were full-time “homemakers” aka caregivers, according to the Bureau of Labor Statistics. Women now make up nearly half of the U.S. workforce, but are paid less than men on average in the same jobs, according to the non-profit Institute for Women’s Policy Research.
Stagnant wages are something I have talked about for years. Maybe we will see wages increase as the competition for quality employees increases.
Remember, people need a decent income if they are going to buy homes…
That’s all I have time for today! Be sure to subscribe or hit the share buttons!