Discussing mortgage rates, optimism about economic opportunity in America, real estate picked as the best investment and much more…
Looking at Mortgage Rates
Time to once again look at the latest info on mortgage rates from the MBA and Freddie Mac!
Freddie Mac said:
- 30-year fixed-rate mortgages averaged 3.93% with an average 0.5 point
- This is up from last week when it averaged 3.92%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.43%
- 15-year fixed-rate mortgages averaged 3.18% with an average 0.5 point
- This is down from last week when it averaged 3.20%
- A year ago at this time, 15-year fixed-rate mortgages averaged 2.74%
The MBA reported:
Mortgage applications decreased 2.8 percent from one week earlier
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged at 4.17%, with points decreasing to 0.36 from 0.40 (including the origination fee) for 80% 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 4.11% from 4.06%, with points increasing to 0.25 from 0.24 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.45%, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
Both Freddie and the MBA reported that most rates were steady. While this is good news, remember these are the average rates.
You may get a lower rate or a higher rate. You need to sit down and discuss your budget and options with the lender of your choice. You need to get your credit pulled and go through the Pre-Approval process to get a better idea of what is possible for you.
Looking at Rail Traffic
U.S. railroads originated 1,019,239 carloads in July 2017, down 0.6 percent, or 6,079 carloads, from July 2016. U.S. railroads also originated 1,058,354 containers and trailers in July 2017, up 5.6 percent, or 55,997 units, from the same month last year. Combined U.S. carload and intermodal originations in July 2017 were 2,077,593, up 2.5 percent, or 49,918 carloads and intermodal units from July 2016.
AAR Senior Vice President John T. Gray said:
The decline in total rail carloads in July 2017 from July 2016 was very small at 0.6 percent, but it was the first carload decline since October 2016. Beginning in July last year, certain categories of rail traffic — coal and grain in particular — saw a surge in rail volumes. That surge suddenly made comparisons to this year much tougher. That largely explains July’s carload decline. Meanwhile, intermodal continues to do well — July’s 5.6% gain is the sixth straight year-over-year monthly increase, and intermodal is on track to set a new annual record this year.
Interesting. I hope we are not going to see more declines and this is only a blip.
More People Are Optimistic About Economic Opportunity in America
From Rasmussen Reports:
With the Dow closing at new highs this week and unemployment down, Americans are more confident than they have been in years that it’s possible for just about anyone to find a job – and even get rich – in America.
A new Rasmussen Reports national telephone and online survey finds that 63% of American Adults think it’s possible for anyone who really wants to work to find a job in this country. That’s up from the previous high of 61% in October 2014 and is the highest level of optimism in more than eight years of surveying. Prior to this survey, this number generally remained in the mid-40s to mid-50s. Just 26% disagree and say it’s not possible for anyone who wants to work to find a job, a new low. Eleven percent (11%) are not sure.
Good news and hopefully this optimism will translate into more people buying and selling homes.
Jobless Claims Fall
In the week ending July 29, the advance figure for seasonally adjusted initial claims was 240,000, a decrease of 5,000 from the previous week’s revised level. The 4-week moving average was 241,750, a decrease of 2,500 from the previous week’s revised average.
The good news about jobless claims should mean that the Fed will stick to it’s plans to start reducing their holdings. Since we have never seen this kind of situation before, it could get very interesting…
Service Sector Still Booming
Economic activity in the non-manufacturing sector grew in July for the 91st consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
More good news that hopefully will help the housing market.
Was There Ever A Bubble In Housing Prices?
From Niskanen Center:
Housing prices have been on a tear over the last five years. The Case-Shiller national composite has risen 35 percent since its post-crash bottom in 2012, and is currently just above its pre-crisis peak, set in the spring of 2006. This has R Street’s Alex Pollock wondering whether the Fed has re-inflated the real estate bubble.
There is a conceptual paradox with timing the market by buying when prices are low. If you’re right and this really is the best time to get in, then everyone should be getting in. Yet, if everyone was getting in, then prices would already be rising due to the high demand. Thus, low prices which are attracting you are at the very same time a signal to stay away. Wise investment counselors advise their clients to ignore the ups and downs as much as possible, and buy and sell based on your own needs, not your perception of market trends.
Could the same thing be true of housing?
That is, might it be the case that we have entered a phase where sometimes housing prices will go down? Wise homeowners buy and sell based on their own needs, not in some attempt to judge the market. The market will be buffeted by forces that are nearly impossible for the average homeowner to gauge—forces like international changes in liquidity.
Very interesting stuff. There is so much more to owning a home than just the numbers.
Yes the numbers must work and you must be financially ready and able to afford owning a home…
And home prices could go down. Or continue to rise….
The key thing is to remember to buy smart and plan for staying put for a long time. Despite the claims of gurus and their seminars, real estate is NOT a get rich scheme.
Owning your home is a long term investment that will help you build wealth.
As reported by the latest Bankrate Financial Security Index Poll, Americans that have money to invest for the next 10 years would prefer real estate over any other investment.
Real estate was number one with 28% of all respondents. This is 3% higher than last year.
Cash investments (savings accounts or CD’s) was number 2 with 23%. This is the same as last year.
Check out the chart:
The article points out several reasons for these results:
After bottoming out at the end of 2011 following the worst housing collapse in generations, home prices have gone gangbusters recently, climbing back above their record pre-crisis levels. Prices jumped 6.6 percent during the 12 months that ended in May, according to CoreLogic.
Toss in persistently low interest rates, tax goodies that come with owning a mortgage, and the psychological payoff from planting your roots, and maybe it’s no wonder real estate remains popular.
I have written many times about the financial and non-financial benefits of home ownership.
Like I said, owning your home is a long term investment that will help you build wealth.