The U.S. housing market is getting hotter in 2018 with 52.6 percent of all homes across the country worth as much or more than they were at the peak of the national housing boom in April 2007, according to a survey on the 10 hottest housing markets of the US released by Zillow on Tuesday. The survey says that U.S. housing markets with healthy income growth, abundant job opportunities and above-average housing appreciation are likely to get hotter in 2018. These include technology hubs like the silicon valley markets of San Jose and San Francisco and markets in the Southeastern part of the U.S such as Raleigh and Charlotte in North Carolina and Nashville, Tennessee. With a median household income of $110,000 and a Zillow Home Value Forecast of 8.9 percent, San Jose tops Zillow’s list as the hottest housing market in the U.S. The survey said that home values in this Silicon Valley hub gained 17.4 percent over the past year, showing the fastest growth among the 50 largest metro areas as high-paying tech jobs continued to keep pace with climbing housing costs. The survey also ranked two North Carolina markets – Raleigh and Charlotte, second and fourth respectively. […]
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Freddie Mac recently announced the expansion of its Agency Credit Insurance Structure (ACIS) program with ACIS Forward Risk Mitigation (AFRM), a front end credit risk transfer offering. This latest credit risk transfer (CRT) offering enables Freddie Mac to transfer mortgage credit risk simultaneously with the acquisition of loans by securing committed private capital and providing stable pricing over a two-year horizon through the end of 2019. “AFRM is the first CRT product to secure private capital from investors committed to providing coverage on loans funded over the next two years and represents an important milestone in the expansion of the ACIS program,” said Gina Subramonian Healy, VP of Credit Risk Transfer. “We’ll continue to explore ways to evolve our front-end CRT offerings to transfer more credit risk away from taxpayers and provide investors new ways to invest in the U.S residential housing market.” AFRM shifts a portion of the mortgage credit risk on pools of single-family loans with a combined unpaid principal balance of approximately $21 billion to a diverse panel of reinsurers, providing insurance coverage with a maximum limit of approximately $650 million, according to the release. This covered pool will consist of 30-year fixed-rate mortgage loans with loan […]
A growing number of homeowners are in the money — big money. The amount of home equity borrowers now have at their disposal reached an all-time high in the third quarter of last year. The 42 million homeowners with mortgages have a collective $5.5 trillion in “tappable” equity, according to Black Knight Data & Analytics, which studies the mortgage industry. This is $3 trillion more than they had when the housing market last bottomed in 2012, after the financial crisis. Black Knight defines tappable equity as the amount available for homeowners to borrow before reaching 80 percent of debt to value against their home. Following the housing crash, millions of borrowers fell underwater on their mortgages, owing more than their homes were worth. Fast-rising home prices over the last two years have brought borrowers above water and beyond. Approximately 80 percent of homeowners now have equity they can use, cash which could fuel the economy. Just 2.7 percent of borrowers, or about 1.36 million, still owe more on their mortgages than their homes are worth. Generally, there are two ways to take cash out of an equity-rich home. One is to refinance the original mortgage to a larger home loan. […]
· Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic. · Low supply and high demand are fueling the gains and neither of those is expected to ease up anytime soon. The temperature may be frigid across much of the nation, yet home prices are sizzling and sellers are in the hot seat. Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic. That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon. Supply is actually falling even more now, and a strengthening economy is pushing demand. This will have potential buyers out early this year, trying to get a jump on the spring market. “Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” said Frank Nothaft, chief economist at CoreLogic, in the report. Nothaft said the limited supply is the worst at the lower end, and will hit the growing number of first-time buyers hardest. Half the homes […]
Continuing a trend that began in Q4 2016, mortgage lenders reported a negative profit margin outlook for the next three months according to Fannie Mae’s Q4 2017 Mortgage Lender Sentiment Survey. This quarterly survey of 224 senior executives from the mortgage lending industry is used not only to track mortgage lenders’ current impressions of the mortgage industry, but also their insights into the future. This outlook has persisted for the last five quarters with lenders expressing negative sentiment, primarily due to competition with three-fourths of respondents who saw deteriorating profits, citing competition as the most important reason compared with only one-third two years ago. “This is not surprising given that refinance volume continues to shrink. More mortgage lenders reported a pullback in refinance demand from the prior quarter than those who saw an increase, continuing the trend that started at the beginning of the year,” said Doug Duncan, SVP and Chief Economist at Fannie Mae. Other reported factors include consumer demand, staffing, and market trend changes. Additionally, the net share of lenders who expect to see growth in refinance mortgage demand over the next three months fell to the lowest reading in a year across all loan types (GSE eligible, […]
2018 might see first-time homebuyers facing higher rates of price growth for starter homes and further erosion of affordability according to the Home Price Index (HPI) for November 2017 and released on Tuesday by property analytics firm CoreLogic. The HPI report for November indicated home prices across the U.S. increasing year over year by 7 percent from November 2016 to November 2017. Month over month, they increased by 1 percent in November 2017, compared to October 2017. CoreLogic also released its HPI forecast, which is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighing indices according to the number of owner-occupied households for each state. The forecast projected a decrease of 0.4 percent in home prices from November 2017 to December 2017. However, it indicated that the increase in home prices is set to remain through 2018 with a projected increase of prices by 4.2 percent by November 2018 on a year-over-year basis. “Rising home prices are good news for home sellers, but add to the challenges that homebuyers face,” Dr. Frank Nothaft, Chief Economist at CoreLogic said. “Without a significant surge in new building and affordable housing […]
· Optimism over the tax bill resulted in higher interest rates, sending total mortgage application volume down 2.8 percent in the last two weeks of 2017. · Applications to refinance a home loan, which are most rate-sensitive, fell 7 percent during the two-week period. Economic policy can be a double-edged sword, and that was abundantly clear with respect to mortgage rates at the end of the year. Optimism over the tax bill resulted in higher interest rates, and that caused total mortgage application volume to drop 2.8 percent in the last two weeks of 2017. The Mortgage Bankers Association included an adjustment for the Christmas holiday. Applications to refinance a home loan, which are most rate-sensitive, fell 7 percent during the period but ended the year 1.8 percent higher than at the end of 2016. Interest rates were also higher at the end of 2016 due to a spike following the presidential election. After jumping 9 basis points during the third week of December, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged for the last week of the year at 4.25 percent, with points increasing to 0.36 from 0.35, […]
Tight inventory continued to boost home prices as housing activity remained upbeat towards the end of 2017, according to the Economic and Housing outlook released by Fannie Mae’s Economic & Strategic Research (ESR) Group on Monday. The monthly forecast, which details interest rate movements, the housing market, mortgage market, and the overall economic climate, noted that total housing starts rose in October to the highest level in a year, even as new home sales approached a decade high. ESR said that existing home sales posted the first back-to-back gains this year, and contract signings to close on existing homes increased for the first time in four months, as sales rebounded from hurricane disruptions. “The housing market continues its upward grind, as it struggles to balance strong demand and house price appreciation with inventory shortages and affordability concerns,” Doug Duncan, Chief Economist at Fannie Mae, said. As a percent of real estate value, homeowner equity rose to 58.6 percent, only 1.2 percentage points below the most recent peak at the end of 2005, ESR noted, adding that the yield on 30-year fixed-rate mortgages is expected to average 4 percent this year. ESR said that, while they had expected shortages of skilled labor […]
Get debt under control in 2018 – maybe With a debt consolidation mortgage, now may be the time to refinance your home and pay off other accounts. Depending on your equity, it’s goodbye credit card balances, car loans, and even student debt. Do it right and your monthly costs can fall significantly. Home equity up nationwide The Federal Reserve reports that at the end of the second quarter, homeowners accumulated real estate equity worth $13.9 trillion. That’s a lot more than it used to be, in part because home values in most areas have been rising. According to the National Association of Realtors, in October, existing home prices nationwide rose for the 68th straight month of year-over-year gains. Debt consolidation mortgage advantages Not only have homeowners generally gained a large amount of equity, they can also access that money. Today’s mortgage rates are around 4 percent, a rate generally below the cost to finance cars, student debt, and especially credit cards. If you’re repaying a mortgage at 4 percent and a credit card at 16 percent, the rate difference is obvious. And pitfalls While a lower mortgage rate is what you want, it’s not the only consideration. If you have […]
There has been a flurry of news about the two GSEs, Fannie Mae and Freddie Mac, in the last few weeks. The House Financial Services Committee recently advanced H.R. 4560, the GSE Jumpstart Reauthorization Act of 2017 to the full house for consideration. The proposed bill extends the GSE Jumpstart Act through January 1, 2019, and was approved 33-27. The Jumpstart Act prohibits the sale of the GSE preferred shares owned by the Treasury Department without congressional approval. The bill also permits the GSEs to suspend their payments into the Housing Trust Fund for any period when it is unable to make its full dividend payment to Treasury. We take that to mean the bill will not be a precursor to allowing the GSEs to retain any part of their net profits which are currently swept in their entirety into the Treasury. The discussion over that dividend and the related matter of whether the GSE will be allowed to begin building some capital reserves takes on more significance in light of a brief note from Bloomberg’s Felice Maranz this week. If the GOP tax bill passes in its current form, it may push the GSEs into a Treasury draw in the […]
A report released on 12/21/2017 from mortgage industry consultant STRATMOR Group debunks the myth that loan officers (LO) are too old to meet the needs of the younger borrowers—millennials in particular—who looking to buy a home. In the report, STRATMOR Senior Partner Jim Cameron draws upon the company’s four-year consensus survey to disprove the notion held by some in the mortgage industry that borrowers of any age group aren’t being satisfied by the LOs as a group because they’re too “old.” Cameron states that many lender CEOs have lately been concerned with the idea that LOs are getting too “old” for the borrowers they serve, and that age does make a difference in being able to satisfy younger borrowers. “Many believe that the average LO is 52-55 years old, that the LO’s age makes a difference in his or her productivity and that younger borrowers—like millennials—would prefer dealing with an LO closer to their own age. The data just doesn’t support this view,” Cameron said. According to the results from STRATMOR’s Originator Consensus Survey, which covers thousands of LOs working at both independent and bank-owned lenders, states the average and median age of LOs is 46 and 47 years old—four […]
FICO scores dipped across most loan types in November according to the Origination Insight Report released by Ellie Mae, a cloud-based platform provider for mortgage providers, on Wednesday. The report focuses on mortgage loans that closed in a specific month and compares their characteristics to similar loans that closed three and six months earlier. The report noted that the percentage of refinances held steady at 39 percent of total loans. Average FICO scores on all loans dropped to 722 in November from 724 in October. According to the report, refinances saw FICO scores dip across loan products with the FHA refinance scores dropping from 650 in October to 645 in November. Conventional refinance FICO scores dropped to 730 in November from 732 in the month prior and VA refinance scores also dropped to 700 from 702 in October. “We saw FICO scores drop modestly, especially across refinances, indicating that lenders may be loosening credit standards to attract the dwindling refinance market. This is certainly a trend we will continue to watch into the winter months,” Jonathan Corr, president and CEO of Ellie Mae said. The report also noted that in November the percentage breakdown of all closed loans remained steady […]
Buying a home might become an expensive proposition after the new tax bill, according to a nationwide survey conducted byRealtor.com, a website that offers information and resources on buying and selling properties. The survey, which was released on Thursday, found that 29.2 percent of potential homebuyers said they would buy a home faster after the Tax Cuts and Jobs Act, citing concerns about home prices possibly increasing. Only around 18.5 percent of respondents said that they would buy slower, and 12 percent said they would postpone purchasing a home. The survey reported that the tax bill made 36.2 percent of the respondents concerned about being a homeowner. In contrast, only 15 percent said that the bill made them feel positive. Around 22.9 percent respondents said that the tax bill would not change their plans to purchase a home, while 57.1 percent who said that the bill would not change their plans to sell. “The bill will have a significant impact on the housing market and overall economy, so it makes sense that people are wondering what it means to them,” Joseph Kirchner, Senior Economist at Realtor.com, said. Realtor.com’s report also suggests the tax bill is expected to provide many people with […]
The end of the year is a good time to look back at the economy for 2017 and, more importantly, to look ahead to 2018. In a conversation on NPR, I took a look back at the economy in 2017, what we learned, and what to expect economically in 2018. Here’s a summary of the discussion: The U.S. economy is ending 2017 in pretty good shape The U.S economy got off to a soft start in 2017, but it’s been growing at a reasonably healthy pace lately. Third-quarter growth came in at a 3.2 percent inflation-adjusted annual rate; fourth quarter growth looks to be somewhere between 2.5 percent and 3 percent. The unemployment rate has fallen from 4.7 percent at the end of last year to 4.1 percent at last count. The last time it was this low Bill Clinton was president; that was 17 years ago. The U.S. has added 2 million jobs in the past year, all of that in the private sector. Government employment has fallen a bit. We’ve drawn a lot of people into the job market who had been on the sidelines. Inflation is low. The stock market has risen 19 percent over the past […]
A group of top U.S. economists sent a letter earlier this week to U.S. Department of the Treasury Secretary Steven Mnuchin, claiming the tax reform bills being considered in the Senate will significantly boost the economy. These economists, who range from Harvard University and other professors to a former director of the Congressional Budget Office and economists who served under former President George W. Bush, said that reducing the corporate tax rates will increase economic activity. “Expensing, which allows firms to deduct the full cost of investment at the time it is made, lowers the user cost of capital relative to depreciation over time,” the economists wrote in their letter. “A lower corporate tax rate also lowers the user cost of capital, which not only induces U.S. firms to invest more, but also makes it more attractive for both U.S. and foreign multinational corporations to locate investment in the United States.” The Senate version of the Republicans’ tax plan, the Tax Cuts and Jobs Act, moved one step closer to becoming a reality on Tuesdaywhen the Senate Budget Committee approved the bill. And earlier in November, House of Representatives passed its major tax reform, sending it to the Senate, but […]
Mortgage rates were at their highest levels in roughly 1 month as of yesterday afternoon. That ran counter to many of the mortgage rate news stories that came out throughout the day due to said stories using Freddie Mac’s Primary Mortgage Market Survey as source material (a longstanding survey that accurately tracks rates over time, but often fails to account for near-term volatility). Accounting for near-term volatility is tricky business for mortgage lenders this week–especially over the past 3 days. Wednesday and Thursday saw interest rates spike quickly higher as the Senate’s version of the tax bill looked increasingly likely to pass. In general, the tax bill is good for stocks and bad for bonds. By far and away, the week’s biggest market mover landed today in the form of headlines regarding former Security Advisor Flynn pleading guilty to charges that he lied to the FBI about conversations with a Russian ambassador. This led financial markets to entertain the possibility that Flynn struck a plea deal in order to implicate Trump in the case. While that hasn’t happened yet (and it may never happen), it resulted in a massive move lower in bond yields in the middle of the day–one […]
And what’s keeping 50 million credit invisible in the U.S. Americans who don’t have a FICO score present both an opportunity and a challenge for mortgage lenders. Lenders are keen to extend credit to consumers in new market segments, but need to ensure they’re making risk-aware decisions. Some lenders are asking can scoring trended data, or more accurately trended credit bureau data, as some credit score companies claim, actually help expand credit access to these consumers? The short answer is no and let’s discuss why. First, it’s important to understand two key terms: 1.Trended data is a historical view of a consumer’s traditional credit bureau file. 2.Alternative data, according to the Consumer Finance Protection Bureau, refers to any credit data that is not found in the traditional credit bureau file. Therefore, the important question to ask is whether a credit scoring model is using traditional credit bureau data or alternative data, as defined above. Traditional credit bureau data contains the most recently reported information on consumers’ monthly balances, payment amounts and limits. Trended data consists of this exact same traditional credit bureau data going back 24 to 30 months, depending on the source credit reporting agency. Trended data can be […]
Design thinking is enabling mortgage lenders and servicers an opportunity to revolutionize the mortgage customer experience. Companies around the globe are leveraging design thinking to stay relevant and meet expectations of today’s consumers. While mortgage lenders often re-engineer processes, bolt-on technology to systems, and even integrate new rules or requirements, it is critical to consider the customer experience. Customers are demanding that we think about processes from their perspective, and as consumers, we demand the same thing. Now is the time for mortgage lenders to incorporate design thinking as a part of the customer experience strategy and use as a means for understanding and exceeding customer expectations. Whether you’re a processor, loan officer, realtor, or operational executive, you have the ability to positively transform the mortgage customer experience by taking an outside-in view of the entire process. Customer Experience Design is a Key Market Differentiator Design thinking is a way of engineering business processes to work smarter. It’s also the methodology that underpins customer experience (CX) design, which is fast becoming a key market differentiator for successful brands. Studies show companies that invest in CX record up to five times faster revenue growth than CX laggards, and that differential in […]
Third financial reform report questions rule’s effect on insurance industry On October 26, 2017, the Department of the Treasury released its third of four reports that call for sweeping financial reform. The reports come at the direction of President Donald Trump, who signed an executive order in February directing Treasury Secretary Steven Mnuchin to examine the nation’s financial laws. The first Treasury report was released in June and dealt with banks and credit unions. The second report, released earlier this month, focused on capital markets. The third report, released Thursday evening October 27, 2017, focuses on asset management and insurance, and while most of the report deals with issues outside of housing, there is one piece that touches on an item of note for the housing industry – disparate impact. In the Obama administration, the Department of Housing and Urban Development began using disparate impact theory as a way to enforce the Fair Housing Act. A 2015 ruling by the Supreme Court established that the Fair Housing Act allows lawsuits based on disparate impact, meaning a law or practice has a discriminatory effect even if it wasn’t based on a discriminatory purpose. In layman’s terms, that means that a mortgage lender’s practices […]
The recent hurricanes will cause surrounding areas to see an increase in home prices and an uptick in housing demand as residents evacuate the disaster areas in Florida and South Texas, according to Freddie Mac’s latest monthly Outlook for October. The report analyzed the effects of the recent hurricanes, saying it could create a tighter inventory squeeze along with an increase in mortgage delinquencies. “Texas and Florida together represent 24% of the total housing starts in the U.S. housing units impacted by the hurricanes are a fraction of the total starts in Texas and Florida, so we do not expect a huge national impact,” Freddie Mac Chief Economist Sean Becketti said. “However, the hurricanes won’t help with tight inventories. Building activities in the hurricane-affected areas may slow down as labor and capital gets drawn into rebuilding.” In the beginning stages of the recovery process, Black Knight Financial Services predicted the mortgage industry could see up to 300,000 new delinquencies as a result of Hurricane Harvey, with 160,000 borrowers becoming seriously past due. Later, the first numbers from Black Knight started to roll in as mortgage delinquencies rose 16%, and according to the report, the hurricane’s impact on mortgages will likely […]
· The top 5 percent of homes by price sold in the third quarter saw their values increase 4.9 percent compared with a year ago, hitting an average of $1.71 million, according to Redfin. · The number of homes for sale priced at or above $1 million fell just over 18 percent compared with the same period last year. The top 5 percent of homes by price sold in the third quarter saw their values increase 4.9 percent compared with a year ago, hitting an average of $1.71 million, according to Redfin, a real estate brokerage. The higher home prices are the result of a sharp decline in listings in the luxury sector. The number of homes for sale priced at or above $1 million fell just over 18 percent compared with the same period last year. “There is still strong home buyer demand for high-end homes,” said Redfin’s chief economist, Nela Richardson. “Despite declining inventory, luxury sales soared in the third quarter.” Sales of homes priced at or above $1 million were up 11 percent from a year ago, while sales of homes priced at or above $5 million were up almost as much at 10 percent, Richardson explained. At the […]
· New home sales soared 18.9 percent in September. · Economists surveyed by Thomson Reuters anticipated new home sales falling 0.9 percent for the month. · New home sales unexpectedly fell 3.4 percent in August. Sales of new U.S. single-family homes unexpectedly rose in September, hitting their highest level in nearly 10 years, offering hope that the housing market was regaining speed after appearing to stall in recent months. The Commerce Department said on Wednesday new home sales surged 18.9 percent to a seasonally adjusted annual rate of 667,000 units last month amid an increase in all four regions. That was the highest level since October 2007 and followed August’s upwardly revised sales pace of 561,000 units. The percent gain was the largest since January 1992. August’s sales pace was previously reported at 560,000 units. Economists polled by Reuters had forecast new home sales, which account for 11 percent of overall home sales, falling 0.9 percent to a pace of 555,000 units last month. New home sales, which are drawn from permits, are volatile on a month-to-month basis. Home sales soared 17.0 percent on a year-on-year basis in September. The housing market has trod water for much of this year, amid shortages of […]
In about two and a half months, Santa will come to town, and his elves will deliver presents. All that lenders in the mortgage industry have asked for is a technological solution that will solve their problems, and meet their needs; instead, they’re getting headaches and disgruntled phone calls. The relationship between mortgage lenders and technology is often one of love and hate – and that’s frequently the result of lenders who believe three common misrepresentations about mortgage technology. Listed below are ways to steer clear of these myths. 1. Implementation will go smoothly. Technological implementation almost never goes smoothly. In fact, according to HousingWire.com, “in a recent Stratmor Group survey of lenders, it still takes everyone 12 months to completely convert to a new loan origination system. As well, only 28% of mortgage lenders claimed they were “very satisfied” with their LOS.” Oftentimes, when the implementation does not go as expected, the results are often costly, time-consuming, and require more work for the loan originators. HousingWire suggests that, before a lender decides one way or another about mortgage technologies, they should “evaluate the architecture of innovative technology vendors to understand what the solution can or cannot do. For example, do they have flexible […]
As the ever-changing, confusing, and convoluted real estate business grows, those in the mortgage industry know the importance of having a license. Quite simply, with a license, loan officers are more confident in their work, skill, and performance. Not only does each state have their own rules, laws, and policies regulating what a loan officer can, and can’t do, but each state has different requirements for mortgage licensing as well. Licensed loan officers are professionals who are formally trained, and educated in the policies, and procedures that govern real estate financing. Confident, licensed lenders focus on two essential priorities while working with borrowers: protection and security. In July of 2008, the SAFE Act was enacted to establish common national criterion for residential mortgage originators. Although effective, it only works for those originators who have to be registered, as opposed to licensed. For example, Mortgage Porter states that the requirements for Licensed Mortgage Originators in Washington State, per the Safe Act, include: Submit fingerprints for a federal and state background check Have a unique identifier number Demonstrate financial responsibility Pass 20 hours of approved pre-licensing education Score 75% or higher on the state and national mortgage exam Enroll in 8 hours of continuing education every […]
While in our digital age online home purchasing is, in fact, becoming more of a reality, homebuyers much prefer the personal touch of interacting with real estate agents and loan officers. Personal interactions with real estate professionals are still of upmost importance to homebuyers in today’s real estate market, despite the options that the digital age offers them. According to housingwire.com, “A new report from the Fannie Mae Economic and Strategic Research Group shows buyers do, indeed want more online resources during their mortgage-shopping experience. A survey showed respondents want to use mobile devices nearly twice as often in the future…however, that does not mean they place less value on real estate professionals and other person-to-person interactions, the survey showed.” The research revealed that homebuyers viewed personal interactions – not online resources – as most influential. Mortgage lenders, real estate agents, and sometimes family and friends were all considered more reliable and dependable than online sources. Even though homebuyers value their personal interactions more than they do online information, that does not mean they neglect online information altogether. The survey above revealed that 77% sought out information from their real estate agent, 75% asked mortgage lenders and 69% researched the […]
When mortgage industry veteran Joe Parsons, a senior loan officer in California, was asked his opinion on the most essential things that homebuyers need to know, he shared very simple, factual information about the loan officer’s job duties. Parsons stated that a loan officer at a bank or a credit union accepts an applicant’s completed form, and forwards it to the underwriting department. An independent loan officer provides more services to the borrower by way of advising them of the best loans, collecting documentation, ordering appraisals, and directly communicating with the underwriter for guaranteed loan approval. But what happens if a borrower chooses not to use a loan officer? Parsons said, “A large bank or credit union relies on the underwriting department to handle all of the above tasks—and these departments aren’t working as representatives for the borrower. The takeaway for the consumer: Mortgage rates available at an independent loan originator, whether it’s a broker or a small banker, won’t be higher than those offered through a big bank.” When asked why the mortgage rates constantly change, Parson’s answer was technical, mathematical, and financially complex. From Freddie Mac to Fannie Mae, and from Mortgage Backed Security to fluctuating percentages, Parsons […]
A six-foot rise in sea levels could result in the loss of $900 billion worth of U.S. residential real estate. Coastal homes are threatened by the prospect of rising sea levels, projected to be a reality by 2100, could destroy nearly 2 million homes. Zillow, a leading real estate and rental marketplace, studied what kinds of homes would be flooded. Svenja Gudell, Zillow’s chief economist stated, “Living near the water is incredibly appealing for people around the country, but it also comes with additional considerations for buyers and homeowners…Homes in low-lying areas are…more susceptible to storm flooding and these risks could be realized on a much shorter timeline as we have seen time and time again.” By 2100, an estimated 29% of homes in the highly valuable category are expected to be underwater, with the rest of the homes listed around the median price of $220,000 or lower. Only 25% are among the least valuable homes. Making matters worse is that lower-priced homes are owned by families unlikely to have the resources to take preventative measures against the rising tides. These measures include putting in sea walls or making changes to foundations that could withstand intermittent flooding. The majority of […]
It’s clear. The housing market can’t take the shock of a natural event. While the exact numbers are still too difficult to determine, an estimated 10,000 homes and other structures have been demolished by floods, winds, or fires sometime during the last three months. Another disaster lies at the threshold of residential real estate as one considers the construction labor shortage that was already present prior to these disasters; thus making reconstructions and its repercussions severely problematic. According to cnbc.com, “’The housing market can’t take the shock of a natural event,’ said Nela Richardson, chief economist at a real estate company. ‘It can’t take any shock because we are so tightly wound with inventory. Any change is a big change, and you’ll see that play out across the South.’” According to the National Association of Realtors, available home inventory is acutely low across the nation. It continues to fall, resulting in the drop of home sales during the past 3 months and causing entry-level home buyers to step aside. Even before Hurricane Harvey, Houston was the most active U.S. market for home construction, and yet, the number of homes destroyed by the storm “…surpassed the total number of single-family building […]
In our personal lives, the holidays can be a fun, exciting, and memorable time, but in our professional lives – especially within the mortgage industry – the holidays may cause a sense of dread as traffic dies down, and businesses cease to grow. So, what strategies can you implement to grow your business during the holidays? First, explore the effective strategies that work year round; then, tweak those strategies to accommodate the societal mindset that most individuals have between Thanksgiving and the New Year. According to loanofficerhub, there are five strategies that professionals in the mortgage industry use throughout the year to consistently attract more business. Strategy Number 1: Spread the Word. It’s so important within the mortgage industry to connect, and reach out to other people. A good place to start is by building your network with other industry professionals, and establishing relationships so that you can enhance your business. For example, you can connect with these types of professionals: Accountants CPA Firms Appraisers Real Estate Agents Real Estate Attorneys Relocation Specialists Listing Agents Strategy Number 2: Sell Yourself. Promoting your services on your own website is a great tool to sell yourself. By providing your contact information, showing […]
More affordable real estate is on the horizon for fortunate future homeowners. According to CoreLogic’s most recent U.S. Home Price Insights report, home prices are stalling, and only grew 0.9 percent during July and August. The firm suspected that growth would slow down even more with prices rising just 0.1 percent for the month of September. From August 2017 to August 2018, CoreLogic forecasts a price growth of just 4.7 percent. That’s the lowest annual growth rateCoreLogic’s Chief Economist, Frank Nothaft, has seen in three years. “While growth in home sales has stalled due to a lack of inventory during the last few months, the tight inventory has actually helped stabilize price growth,” he said. “Over the last three years, price growth in the CoreLogic national index has been between 5 percent and 7 percent per year, and CoreLogic expects home prices to increase about 5 percent by this time next year.” After analyzing 100 of the country’s largest metropolitan areas based on housing stock as of August 2017, an overvalued housing stock was discovered in 34 of cities in the nation. As of August 2017, after CoreLogic Marketing Conditions Indicators (MCI) categorized home prices in individual markets as undervalued, […]
According to some news outlets and to the opinions of certain economists, at any moment the U.S. is on the brink of recession. But, over and over again for the last few years, the economy has remained steady. Technically speaking, the Great Recession began in December 2007 and ended in July 2009, but many Americans continued to deal with the effects – particularly from the housing market crash – into 2012 and 2013. With approximately 5 million homeowners owing more on their home than what they were worth, some homeowners still haven’t fully recovered. That’s down from the nearly one-third of homeowners sinking in their mortgages in 2012 when negative equity was at its peak. According to Zillow, home values continue to rise in most major markets and are expected to increase to a total of nearly 5.1% nationally this year. Even though the economy continues to grow, as it has for the last few years, people are nervous about a slow-down. Many wonder how negatively they’ll be affected if there is another downturn. In spite of the recession, and current issues that could potentially harm the economy, many don’t believe the housing market crash will reoccur in a future […]
Year after year, as early as the first day of school in autumn, many of us see holiday merchandise advertised on television or online – we may even see holiday items already for sale at local retailers. And what do we usually say? Probably something to the equivalent of: “It’s not even Halloween yet!” Many of us experience the stress that’s exacerbated by increased activity during the holiday season, but imagine how much more overwhelmed we would feel if we bought a home during that time, as well. Home buyers have a lot to do before they can close on a home. They must: search for the right house, interview different real estate agents, research interest rates, get credit checks, monitor their finances – the list goes on and on. So, is there any real advantage to buying a house during the holidays, or is waiting until spring a better idea? Unbelievably, there are 5 primary benefits to purchasing a house during the holiday season: 1. Less competition in the market. During the holidays, most people are too busy trying to complete a slew of tasks on their “to-do” lists, but looking for a new home is generally not one […]
In Northern California, over 170,000 acres – an area larger than the island of Manhattan – were ravaged by 22 wildfires that spread through seven counties, and destroyed 3,500 homes, and incinerated countless buildings. The cause of the fire that spread through San Francisco’s northern region – an area recognized as one of California’s economic powerhouses – has not yet been established. However, the damage, wreckage, and destruction it caused in this usually highly prosperous region, will result in slashed home prices, scarce availability, and wrecked infrastructure – all factors that need to be considered as displaced homeowners decide whether or not they should return and rebuild, or start somewhere fresh as homebuyers. As a multibillion-dollar tourist industry, the jobs it provides and the services it offers, will take a long time to recover. Rebuilding the homes, businesses, and schools will likely take up to a decade to complete should residents choose to return. The average home price for a residence in Napa County alone was $876,200, while the average home price for a residence in neighboring Sonoma County was $750,000. But after the fires, and with more than 172,000 homes gone in the blaze, it will cost an estimated […]
Turkey. Mistletoe. A ten-second countdown. That’s right. The holidays are just around the corner, and corporations throughout the country have already been preparing for the effects the celebratory time will have on their business operations. Are you prepared? What effect are you anticipating the holidays to have on your growth, your revenue, and your overall success? According to the National Retail Federation (NFR), 2017 holiday sales are expected to grow between 3.6 and 4 percent. According to their website, “NRF expects holiday retail sales in November and December – excluding automobiles, gasoline and restaurants – to increase between 3.6 and 4 percent for a total of $678.75 billion to $682 billion, up from $655.8 billion last year.” NFR President and CEO Matthew Shay says that although 2017 hasn’t been “perfect, especially with the recent devastating hurricanes,” he believes NFR’s forecast reflects the economy’s “realistic, steady momentum, and overall strength of the industry.” “We believe that a longer shopping season and strong consumer confidence will deliver retailers a strong holiday season,” he said. But when it comes to the sectors related to the housing and/or mortgage industries, NFR reports the following: “Consumers continue to do the heavy lifting in supporting our […]
Month after month, college graduates slowly pay off their student loan debt. These loans represent the four to five years students studied for an array of classes and pulled all-nighters to cram for exams. Now that their education is complete students also have outstanding student loan debt in the tens (or even hundreds) of thousands of dollars. So how does student loan debt affect a college graduate’s ability to purchase their first home? According to a recent study by the National Association of Realtors, and the nonprofit group American Student Assistance, millennials attributed their student loan debt for the delay of their first home purchase by approximately 7 years. The results of the above study are based on a 41-question survey answered by more than 2,200 people aged 22 to 35 who are currently repaying their student loans. Saving for a down payment for a home or qualifying for a mortgage is difficult due to the student loan bills that can add up to hundreds of dollars per month. A potential borrower’s debt–to–income ratio increases due to their loan balances, a circumstance often thoroughly analyzed by loan officers before they issue a mortgage. According to realtor.com®’s chief economist, Danielle Hale, […]
Potential homebuyers are seeking out ways to afford their monthly mortgage payments. While the number of adjustable-rate mortgage (ARM) originations rose just over 40 percent from the first quarter to the second quarter of this year, ARM’s have lower interest rates than fixed-rate loans, as well as have a fixed period of at least five years. So after years, the rate can change, and still ARM’s are considered riskier than the classic 30-year fixed mortgage. By definition, an adjustable-rate loan’s rate will be different after the fixed period, either increasing or decreasing depending on the broader market rate. According to CNBC.com, “ARM demand usually rises from the first quarter to the second quarter, because spring is the busiest season for home buying, and it’s when families dominate the market, searching for bigger, higher-priced homes. Still, the jump in ARMs in the spring of 2016 was 15 percent compared with this year’s 40 percent jump. This makes the case that buyers this year are struggling with affordability and opting for a lower-rate product. While mortgage rates remain very low, historically speaking, they have been inching up. The vast majority of homebuyers favored the safety of the 30-year-fixed rate mortgage since the […]
Housing, holidays, and interest rates are an intriguing concoction when it comes to the mortgage industry. Consumers, who are caught up in the excitement of the holidays while in the process of purchasing a home, may neglect to consider the effect the season may have on the mortgage industry’s ever-changing interest rates. So, what are the effects of this concoction, and how do they affect home buyers in today’s market? As people wait for the Fed’s next move, speculation about a change in housing interest rates lingers. CNBC reported in December of 2016, that “mortgage rates [were] sitting solidly at the highest level in two years, and could move even higher…”. But, CNBC goes on to report that perhaps interest rates don’t affect housing as much as we thought they did. CNBC states that “…there is great debate over whether rising rates really matter to housing. After all, increasing rates are indicative of a stronger economy, and a stronger economy favors housing.” Chief economist at Fannie Mae, Doug Duncan, told National Mortgage News that, “…[if] interest rates are rising because the economy is growing more rapidly, then, typically, incomes also rise, and the rise in incomes offset the increase in […]
The volume of mortgage applications increased last week for the first time since early September. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, rose 3.6% on a seasonally adjusted basis during the week ended October 13. It did decline 7% on an unadjusted basis from the week ended October 6, a week was shortened by the Columbus Day holiday. The week’s results included an adjustment to account for that event. The increase in the Composite Index was the result of gains in both refinance and purchase mortgage applications. The seasonally adjusted Purchase Index was up 4% compared to the previous week although the unadjusted version fell 6%. The Purchase Index was 9% higher than during the same week in 2016. Refinancing also gained ground, ending a four-week slide. That index rose 3% although the share of total applications that were for refinancing ticked down to 48.6% from 49.0%. FHA mortgage applications made up 10.4% of the total, compared to 10.3% the prior week, while the VA share ticked down to 10.5% from 10.6%. USDA loans applications increased their share from 0.7% to 0.8%. Mortgage interest rates showed little movement from the previous week. […]
As the holidays approach, (only to end up shocking us with their fast arrival), home buyers, loan officers, and real estate agents continue to work through their home buying processes. But when the Fed changes things up, homeowners may face increased rates, affecting both the borrowing costs and the price tags on homes across the nation. But the looming increase doesn’t necessarily mean people need to expedite buying or selling a house. The most common loan that people generally apply for is a 30-year mortgage with an average interest rate of 3.9%. So, if a home buyer borrowed $200,000 at that rate, their monthly payment would be approximately $944. Money articles found in Time magazine, often address the mortgage industry. Time states that, “…[low] rates have helped the housing market in other ways. After all, the less you pay to borrow, the more you can afford to spend, so cheap money has enabled home prices…to climb at a steady pace… the Federal Reserve is likely to continue raising rates as long as the economy improves. So, mortgage rates may be set to rise a lot further. But that process is likely to take years.” Time states that in the event […]
Home prices in August surged 7.7 percent, the largest year-over-year price gain since May 2015. The national median sale price was $293,000, flat from July. None of the metro areas Redfin tracks saw prices decline in August. The median value of off-market homes in August was $251,000, as measured by the Redfin Estimate, up 0.7 percent from July. Sales in August fell 5.5 percent compared to last year, the largest decline posted since July 2016. This follows the 5 percent decline posted in July by the Redfin Housing Demand Index. The number of homes for sale plunged 12.4 percent, the largest year-over-year decline in a 23-month streak of declining inventory. The number of new listings in August was down 1 percent from a year ago, leaving just 2.8 months of supply. Less than six months of supply signals the real estate market is tilted in favor of home sellers. In the San Jose, Calif. metro area, inventory plummeted 50 percent in August compared to a year ago, leaving less than a one-month supply, the lowest of all markets Redfin tracks. Nearly a quarter (24.9%) of homes sold above their list price. The average sale-to-list ratio was 98.5 percent. The typical […]
The CFPB today issued policy guidance on the loan-level Home Mortgage Disclosure Act data it will make available to the public under the revised HMDA data collection rules, which take effect in 2018. Noting concerns over consumer identity protection—which ABA raised several times to the bureau in previous comments—the CFPB is proposing to not publicly disclose a number of data points, including the universal loan identifier, the application date, the date of action taken by the bank on a covered loan or application, the address of the property securing the loan and the credit score or scores relied on in making the credit decision. The bureau also proposed changes that would reduce the precision of values reported for several data fields, such as the amount of the covered loan applied for, the age of an applicant or borrower, or a borrower’s debt-to-income ratio.
The Internet has changed the way the real estate market and real estate marketing operate. The traditional mainstays and methods of advertising and promotions no longer function as effectively. Who has a phonebook? How are you going to cold call an e-retailer? You can buy an ad in the newspaper, but the only customers it will attract are the kind of customers who still have a newspaper subscription. Our Internet habits are also leading to the fragmentation of the digital universe, where no two people are seeing the same combination of information sources. The world is also more media savvy than ever. This means advertising simply does not work as well as it used to. People are less likely to see your ad, no matter where you put it, and are inclined to view it with suspicion when they do. People are intolerant of solicitation in general. Most people won’t open up for a door-to-door salesperson, viewing them as an anachronism at best and a nuisance at worst. Cold calls are practically useless, especially now that so many people have cell phones and unlisted numbers. Most cities do not even print home phonebooks anymore, and the commercial phonebooks are usually […]
Buy a house without your spouse: sensible or sleazy? Can you (or should you) buy a house without your spouse? Yes; you can take title in many ways, and one of those ways is “a married man / woman as his / her sole and separate property.” But what does that mean? And just because you can, does it mean you should? Why would you buy a house on your own? There a several reasons you might want to purchase a house in your name only: to protect your interests, to plan your estate, to save money, or to qualify for a mortgage. To get a mortgage Many mortgage programs have minimum FICO scores that would get a couple declined if one spouse’s score is too low. Whether it’s bad credit or just a too-short credit history, if the result is a FICO under 620, you’ll be disqualified under many mortgage programs. So it would make sense to put the mortgage in your own name if you can qualify without your significant other’s income. To save money A few years ago, the Federal Reserve studied mortgage costs and found something startling. Of over 600,000 loans studied, ten percent could have […]
Fed’s George pushes for more rate hikes despite low inflation · Kansas City Fed President Esther George tells CNBC that inflation running below 2 percent shouldn’t prevent more interest rate hikes. · George made the remarks from the annual Fed conference in Jackson Hole, Wyoming. · While Fed officials have indicated a desire to hike interest rates once more this year, traders in the funds market are expressing doubt. Low inflation shouldn’t stop the Federal Reserve from continuing to hike interest rates, Kansas City Fed President Esther George said Thursday. Inflation has been running persistently below the 2 percent target the central bank likes to see as indicative of healthy economic growth. Some officials have expressed caution about the Fed’s collective desire to keep raising rates in that climate. However, George said she feels confident enough in where things stand to keep advocating for tighter policy. “I think we should continue with the gradual rate path,” she told CNBC in a live interview from the annual symposium in Jackson Hole, Wyoming, that the Kansas City Fed hosts. “While we haven’t hit 2 percent, I’m reminded that 2 percent is a target over the long term, and in the context of […]
What Is A Home Appraisal? A home appraisal is the process by which a licensed person assigns a “fair market value” to a property. Appraisals are performed by professionals known as appraisers and, with photos, research, and analysis, home appraisal reports can sometimes stretch to 30 pages of more. The home appraisal process helps to determine whether a home buyer is over-paying for a home relative to similar for-sale homes. This protects the home buyer, refinance applicant, and the mortgage lender providing financing on the home. Home appraisals are used for refinance loans, too. Depending on a home’s appraised value, a borrower will get access to different mortgage rates and options; and, may even get to submit less documentation as part of the mortgage approval process. However, home appraisals don’t always come in “at-value”, which is to say that — sometimes — home appraisals assign a home value that is less than for what you hoped or planned. What do you do then? What Happens When A Home Appraises For Less Than Its Purchase Price? When your home appraises for less than its purchase price, it affects your mortgage, and can affect your contract, too. Remember that mortgage lenders use […]
The Federal Housing Finance Agency today extended the Home Affordable Refinance Program through Dec. 31, 2018. The program was scheduled to phase out in September upon the launch of Fannie Mae and Freddie Mac’s new streamlined refinance program for borrowers with high loan-to-value ratios. However, the agency today announced that the new high loan-to-value refi program would only be available for borrowers who originate their loans on or after Oct. 1, 2017; as a result, FHFA determined that HARP remained necessary to serve eligible existing borrowers. More than 143,000 homeowners may still be able to benefit from HARP, the agency added. Since its inception in 2009, more than 3.47 million refinances have been done through HARP. The eligibility date for the new high loan-to-value refi program was necessary to support the GSEs’ credit risk transfer programs, which since March have seen $54.2 billion worth of risk transferred. Fannie and Freddie will modify future credit risk transfers to accommodate the new streamlined refi program. Meanwhile, FHFA today announced that nearly 357,000 refinances of Fannie or Freddie loans were completed in the second quarter, with 9,700 of them coming through HARP. HARP refinances dropped by one third since the prior quarter. Fourteen […]
FDIC-insured banks and savings institutions earned $48.3 billion in the second quarter, up 10.7 percent from the industry’s earnings a year before, the FDIC said today. The rise in net earnings was largely driven by a 9.1 percent increase in net interest income as the Federal Reserve continues the process of normalizing interest rates, the agency said. Return on assets, a benchmark for industry performance, hit 1.14 percent — a level not seen since 2007. “America’s banks continue to finance the businesses that drive growth and create jobs,” said ABA Chief Economist James Chessen. “Small business lending was particularly strong in the second quarter, showing confidence by entrepreneurs that our eight-year expansion will continue well into 2018.” With interest rates slowly rising, net interest margin improved to 3.22 percent, up from 3.08 percent the year before and the highest level since 2013. Higher net interest margins were reported at larger institutions, which have a greater share of assets that reprice or mature in the short term. Noninterest income was 1 percent higher compared to the same point in 2016. Total loans and leases increased by 1.7 percent, or $161.2 billion, during the second quarter. While loan growth remains strong — […]
Inflation is falling “well short” of target so the Federal Reserve should be cautious about raising interest rates until it is confident of a rebound, an influential Fed policymaker said on Tuesday in making the dovish case ahead of a key policy meeting. In a speech highlighting months of weak data that has pushed core U.S. inflation down to 1.4 percent, Fed Governor Lael Brainard said the central bank should go so far as to make clear it is comfortable pushing prices modestly above a 2-percent target. Brainard, a permanent voting member on the Fed’s monetary policy committee who has in the past convinced colleagues to delay tightening, noted that the U.S. economy is on a “solid footing” and benefiting from two years of an “extremely welcome” rebound in global peers. Yet she seized on the fact that core U.S. price readings have sagged for five straight years. “We should be cautious about tightening policy further until we are confident inflation is on track to achieve our target,” Brainard lends in a speech at the Economic Club of New York. “There is a high premium on guiding inflation back up to target so as to retain space to buffer adverse […]
Fannie Mae recently raised the cap on its maximum debt-to-income (DTI) ratio to 50 percent. Will it help? NAR Research queried lenders about this change in the Survey of Mortgage Originators for the 2nd quarter of 2017. Mortgage lenders were optimistic about the change, but some will maintain overlays to mitigate potential risks. In July, Fannie Mae began buying and insuring loans with DTIs up to 50 percent. This change was an increase from the DTI cap of 45 percent maintained by Fannie Mae in recent years. Some analysts pointed to this change as a potential expansion of the credit box which would result in more home sales in the face of rising home prices and student debt. Others have panned it as simply taking mortgage loans from the Federal Housing Administration (FHA) or other channels. 57.1 percent of lenders in the survey indicated that the change would result in a modest increase in total originations as more borrowers take advantage of the change. Only 21.4 percent felt that this market segment was already served by the FHA, while 7.1 percent felt that the risk was too great to originate. When asked whether they or the investor/aggregator with whom they […]
Natural disasters affect real estate and mortgage rates If you’re searching for a modern American nightmare, you don’t have to look much further than the damage done by Hurricane Harvey. The late-summer storm tore through Eastern Texas, displaced millions of people, created more than $100 billion in damage — and perhaps increased mortgage rates? Mortgage rates and Hurricane Harvey The worldwide supply and demand for money determines what we pay for all kinds of financing, including mortgages. As much as Hurricane Harvey was a huge event, its impact on mortgage rates has been minimal. Freddie Mac reports that prime mortgage rates were 3.86 percent for the week of August 24th just before the storm. They actually fell to 3.82 percent for the week of August 31st. Today’s mortgage rates are remarkably low by historic standards, and did not spike as a result of Harvey. This is good news for mortgage borrowers nationwide, and it’s also good news for Harvey victims because it means cheap funding will be available as they re-build. New home construction At this early point, it’s difficult to know just how many homes Harvey destroyed and damaged. Experts estimate above 100,000 units, but it’s likely that the […]
Total nonfarm payroll employment rose by 156,000 in August, a decrease from July’s downwardly revised figure of 189,000, according to the Bureau of Labor Statistics. The national unemployment rate ticked up to 4.4%, staying within a 10 basis point range in the last five months. Private service-providing industries added a net 95,000 jobs, led by gains in professional and business services, which added 40,000 jobs during the month, and by the health care and social assistance sector, which added 17,000. Goods-producing employment rose by 70,000 jobs during the month, as gains in durable goods manufacturing and construction led by both adding 28,000 jobs in August. The civilian labor force participation rate was 62.9%, the same as in July. Workers unemployed for less than 14 weeks increased by 87,000, while the number of long-term unemployed, those jobless for 27 weeks or more, was essentially unchanged and accounted for 24.7% of the unemployed. The number of discouraged workers was 448,000, a 128,000 decrease from a year earlier. Average hourly earnings increased by 3 cents to $26.39, after a 9-cent increase in July. Over the past year, average hourly earnings have risen by 65 cents, or 2.5%.
The Financial Choice Act, which is sponsored by FSC Chairman, Jeb Hensarling, would modify or repeal many of the modifications made by the Dodd-Frank Wall Street Reform and Consumer Protection Act, including wide-ranging changes in financial regulations, revising the structure of the Consumer Financial Protection Bureau, and restraining much of its power. It also contains provisions that will touch the home mortgage industry. In fact, if passed, the bill would incorporate over two dozen proposed regulatory relief bills for local and community financial institutions, which we include for reader’s reference; H.R. 2896, H.R. 1210, and H.R. 766. House Majority Leader, Kevin McCarthy, has stated that he anticipates a full House vote shortly on H.R. 10, The Financial Choice Act, which was voted out of the Financial Services Committee (FSC) on May 4. Information provided by associates at the Ballard and Spahr law firm, Richard J. Andreano, Pavitra Bacon and Barbara Mishkin has been used to explain some of the impact the passage of the law could bring to the mortgage industry, as well as shed light on the impact on CFPB and other regulatory agencies. H.R. 10 would create a safe harbor under the Regulation Z ability to repay requirements […]
According to the Census Bureau, the homeownership rate for those under the age of 35 is currently at 34.3%. That’s significantly lower than the pre-recession level of 43%. A new study conducted by Apartment List revealed that 80% of apartment-dwelling millennials (those born between 1982-2004) would, given the right circumstances, become first-time home buyers instead of making monthly rent payments. Whether they can afford to do that, however, is another question completely. With housing inventories as tight as they are today, prices continue to escalate and leave out would-be millennial homebuyers. Researchers surveyed 24,000 renting millennials across the country and discovered that close to 70% of them have saved less than $1,000 for a down payment. Only 15% have put away $5,000 and only 29% are regularly saving a minimum of $200 each month to eventually put towards a down payment for purchasing a home or condo. Researchers further uncovered that millennials significantly underestimate how much it will actually cost to be in the position to make a 20% down payment. At their current pace of saving, millennials who intend to put 20% down for an average condo would need to save for at least 19 years in high-priced real […]
Patrick Harker, Philadelphia Federal Reserve Bank President and voting member of the Fed’s rate-setting committee for 2017, has stated that the U.S. central bank continues to be on track to reach the Fed’s 2% goal near the end of the current year. In light of his forecast, Harker once again stated his support for two additional interest rate increases this year. “Turning to inflation, things are still on track, despite a couple of months trending in the wrong direction,” Harker said in prepared remarks for a speech to an economics conference in Reading, Pennsylvania. Within the last 6 months, the US central bank raised its benchmark interest rate twice – both in December, 2016 and March, 2017 FOMC meetings. Despite concerns from some Fed officers regarding inflation, expert analysts anticipate the US central bank will raise rates again at its June 13-14 policy meeting. Harker also remarked that he believes the U.S. economy is now “essentially at normal.” He added that he feels there is very little “slack” remaining in the labor market and that he expects the national unemployment rate to fall to 4.2% by the close of 2018. He showed confidence regarding wages, estimating they would escalate between […]
Persistently depleted supply levels restrained existing-home sales in April and pushed the average number of days on the market for homes to a new low of 29 days, according to the National Association of Realtors®. Total existing-home sales, which include completed transactions of single-family homes, condominiums, co-ops and townhomes, decreased 2.3% to a seasonally adjusted annual rate of 5.57 million in April. Despite last month’s decrease, sales remain at 1.6% above the same period 12 months ago. NAR Chief Economist, Lawrence Yun, commented that the decrease in real estate closings was “somewhat expected”. He added that “a strong sales increase in March at 4.2% and [the fact that] new and existing inventory is not keeping up with the fast pace homes are coming off the market, demand is easily outstripping supply in most of the country and it’s stymieing many prospective home buyers from finding a home to purchase.” Properties sat on the market for 29 days in April, which is down from 34 days in March and 39 days 12 months ago. It also surpasses last May’s low of 32 days as the shortest timeframe since NAR started tracking the data in May of 2011. Fifty-two percent of homes […]
President Trump’s $4.1 trillion spending plan contains a stark shift in language regarding government-sponsored enterprises. Specifically, the President’s proposed budget calls for improvements in the housing finance system, yet it makes no mention of the elimination of Fannie Mae or Freddie Mac. According to Dick Bove, Vice President of equity research at Rafferty Capital Markets, this language is notably an important position change and clearly differs from the course that the former administration intended. In essence, President Donald Trump’s budget appears to reverse previous calls to “wind down” Fannie Mae and Freddie Mac. Bove noted that Obama made it clear he intended to eliminate the entities while “President Trump makes no such statement,” Bove said in a research note. “This is a major change in policy,” he added. As former cornerstones of the US mortgage industry, Fannie and Freddie played important roles before the financial crisis. However, when the agencies ran into financial trouble, mortgage loans to less-qualified buyers defaulted and the government bailout that ensued triggered a great deal of public outrage. As a result, Fannie and Freddie then were effectively nationalized during the crisis. In a recent interview with CNBC, Bank of America CEO, Brian Moynihan, expressed his […]
Mortgage applications rose 4.4% from the previous week, according to reporting from the most recent Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The Market Composite Index, which measures mortgage loan application volume, rose 4.4% on a seasonally adjusted basis over one week ago. On an unadjusted basis, the Index showed growth of 3% compared with the week prior. The Refinance Index increased 11% from the previous week to its highest level since March 2017. The refinance share of mortgage activity increased to 43.9% of total loan applications from 41.1% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.2% of total loan applications. The seasonally adjusted Purchase Index dipped slightly, 1% from the previous week. The unadjusted Purchase Index fell 2% compared with the week prior, which was 3% above the same week 12 months ago. National Association of Realtors® Chief Economist, Lawrence Yun, in a recent NAR report commented, “With [housing] price growth showing little sign of slowing, prospective first-time home buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”* The FHA loan share of total mortgage loan applications grew to 10.8% from 10.6% the previous week. The […]
While the financial world watches with baited breath each time the Federal Open Market Committee meets, constant debate arises amongst analysts and economists regarding whether the Federal Reserve will keep conditions the same or raise interest rates. The Fed has indeed increased the interest rate on three separate occasions since December of 2015 and more of them are anticipated before the end of this year. Obviously, the ultimate objective is to maintain a healthy economy for all Americans. Many discussions omit the important topic of what the Fed intends to do with its immense portfolio of bonds. Currently valued at $4.5 trillion, economists believe that the central bank will reduce its portfolio in further efforts to support the economy’s health. The question remains: what impact will reducing the Fed’s portfolio have on monetary policy and rates? According to economists, nothing more than a modest one. Approximately 55% of economists in a Wall Street Journal poll believe that the Fed reducing its balance sheet by allowing assets to mature will raise the yield on 10-year Treasury notes no more than 0.2%. Another 40% thought the impact would be practically negligible, increasing the yield up 0.1% or less. Correspondingly, speaking to what […]
The first quarter of 2017 displayed the best quarterly current sales in precisely a decade, with sales of 5.62 million, with expectations of finishing at nearly 5.64 million – the best since 2006 (6.47 million) – which is a full 3.5% above 2016 sales figures. As a result of substantial price increases in several metro areas, the national median existing-home price is forecast to jump nearly 5% this year. “The housing market has exceeded expectations…despite depressed inventory and higher mortgage rates,” stated Lawrence Yun, Chief Economist for the National Association of Realtors® (NAR). Yun accredited healthy job gains over several years as well as “improving household confidence” to the quickened sales pace and added expectations that sales will hit a decade-high in 2017. Said Yun, “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence are giving more households the assurance and ability to be homebuyers.” Despite the good news that sales are at a decade high level, inventory supply and home price affordability along with modest economic growth threaten to suppress the homeownership dream. The culprits? Listings in the lower- and mid-market price range are […]
The Mortgage Bankers Association (MBA) released its National Delinquency Survey, revealing that delinquency is down on mortgage loans for the first quarter of 2017, specifically on 1-4 unit residential properties. The delinquency rate was reduced by nine basis points from the prior quarter, and was six basis points lower than the previous year. The survey showed a seasonally adjusted rate of 4.71% of all outstanding mortgage loans. “Employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January 2017 and 232,000 jobs in February. Average hourly wage growth increased 2.8% over the year, and has maintained a generally increasing trend since late 2015. These fundamentals have helped to support the performance of all loan types – whether FHA loans, VA loans or conventional loans,” commented MBA’s Vice President of Industry Analysis, Marina Walsh. There was a slight increase in the percentage of loans on which foreclosure actions were started during the first quarter, coming in at 0.30%. This was a rise of two basis points over last quarter yet still an optimistic reduction of five basis points over one year ago. Loans in the foreclosure process at the end of the first quarter were lower, having […]
The most recent National Housing Survey from Fannie Mae reveals a slight yet significant decrease in the number of consumers who believe mortgage rates will increase in the next twelve months. Following a record-high 64% last month, the number dropped to 62%. What makes this dip noteworthy is that it indicates that consumers are rapidly gaining hope for more affordable mortgage rates in 2018. After mortgage rates fell below 4% for the first time in 2017, homebuyers and refinancing homeowners indicated hope that the trend will continue into the next year. To put things into perspective, Freddie Mac reports that mortgage rates have averaged about 8.25% over the past 45 years, making today’s rates nothing to grumble about as they linger in the low 4’s. While consumer concerns over mortgage rates decrease, their worries increase about housing availability. Fears are mounting particularly for renters who are getting priced out of their rented spaces. The latest Fannie Mae survey showed consumers fully anticipate rent increases of 4.0% over the next year. Rising rental prices – along with fees associated with a move into a rental unit – are lowering the relative cost of homeowner ownership every day. In addition, savvy renters […]
Nine years after the housing crisis, housing construction as an industry hasn’t yet fully healed. The slow but steady growth, however, might be a positive factor in boosting new home construction – and the economy. As a reaction to the slow pace of recovery, housing construction will likely continue to add significantly to economic growth for some time. Recent data illustrates the strength of the residential construction sector. With inventory of previously-owned homes persisting at long-time lows, housing analysts and economists turn to home builders for relief from the supply pressures in the housing market. That’s good news for housing and, at the same time, good news for the economy. Aside from providing more units for homebuyers to choose from, housing construction – especially single-family homes that need furniture, appliances, flooring and more – helps improves economic growth that could lengthen the business cycle in the process. The National Association of Home Builders (NAHB) estimates that building the average single-family home generates about three jobs. For a construction industry that lost 1.5 million jobs in the wake of the financial crisis, this explains why the rate of recovery for home construction has been so slow to some extent. Builders are […]
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey showed that the Market Composite Index (MCI) – which measures mortgage loan application volume – increased 2.4% on a seasonally adjusted basis from the previous week. The seasonally adjusted Purchase Index rose 2% from the previous week, reaching its highest level since October of 2015. On an unadjusted basis, the Index climbed 3%. The seasonally adjusted Conventional Purchase Index rose 2% from one week ago, hitting its highest level since April of 2009. The adjustable-rate mortgage (ARM) share of activity fell to 8.2% of total mortgage applications. The FHA loan portion of total applications rose scantily to 10.5% from 10.4% the previous week. The VA loan portion and USDA portion of total loan applications both remained unchanged at 10.8% and 0.8% respectively, from one week ago. The Refinance Index rose 3% from the previous week. The unadjusted Purchase Index rose 2% compared with the prior week and was 6% higher than the same week one year ago. The refinance share of mortgage activity rose slightly to 41.9% of total loan applications from 41.6% the previous week. On the heels of industry gains illustrated by the Weekly Mortgage Survey, the Fannie Mae […]
Americans are still as confident in the U.S. housing market as has been recently reported, yet they are decidedly more cautious. The quarterly Modern Homebuyer Survey*, released by ValueInsured, revealed the Q1 index finished at 67.7 out of 100. Sixty-three percent of Americans said they are hopeful that 2017 will be a better year for housing opportunities than in 2016. This is a slight dip from the 69% that felt the same optimism in January. The survey was conducted following the most recent Federal Reserve interest rate increase. Despite assuaged confidence, Americans still have a strong desire to buy and still value owning a home in America. In fact: 76% of Americans said owning home is an important part of their American Dream. 77% of Americans believe buying a home is one of the best financial investments they can make. 79% believe buying a home is more financially favorable than renting. 79% of non-homeowners said they would like to purchase a home. Guarded sentiment came mostly as a result of prospective first-time homebuyers and upgrading homeowners, who reported a sense of increasing risk when it comes to escalating home prices and rising interest rates. Sixty-one percent of interested homebuyers expressed […]
The Federal Reserve announced it had decided against raising its benchmark interest rate following central bankers’ two-day summit recently in Washington. Citing the fact that economic progress had “slowed” at the start of 2017 and that household spending “rose only modestly,” the Federal Open Market Committee (FOMC) declared in a statement that it would “maintain” nationwide interest rates for the moment. “The committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2% over the medium term,” according to the statement . The decision was largely anticipated following the FOMC’s third meeting of this year, with the Fed having already increased rates in March. “The outcome of the meeting is not a surprise. However, the Fed should continue raising rates at a modestly faster pace than previous years – two to three rate hikes total this year,” Jason Pride, Director of Investment Strategy at Glenmede, commented. Fed officials seemed willing to overlook the 2017 Q1 relaxed growth rate, under the presumptions […]
The economic case for a Federal Reserve interest-rate hike at their next meeting in June just lost its footing. Two recent U.S. government reports revealed that inflation showed a slight setback in March while at the same time retail sales decreased sharply for a second consecutive month. Labor Department data showed the consumer-price index (CPI) dropped 0.3%, while a measure that excludes energy and food decreased by the most since 1982. “Both reports would be arguments in a case that a dove would make for why the Fed needs to be more patient,” commented Stephen Stanley, Chief Economist at Amherst Pierpont Securities LLC. “It’s a relatively soft consumer performance in the first quarter, and you couple that with a pretty abrupt halt in the gradual uptrend in inflation.” Retail sales were down 0.2% last month after a 0.3% drop in February that had previously been reported as a gain, Commerce Department data showed. Six of 13 major retail categories recorded lower receipts for the month of March. Auto purchases dipped 1.2% following a 1.5% slip in the previous month. While the pullback at retailers highlights a weak first quarter for consumer spending – one that economic experts had already accounted […]
March marked the best month for real estate sales since February of 2007, with sales increases of 5.9% over the previous month. The amount of home buyers for existing homes boomed in March after stumbling unexpectedly in February for various speculated reasons. The National Association of Realtors® (NAR) said sales of existing single-family houses, townhouses, condominiums, and cooperative apartments were at a seasonally adjusted annual rate of 5.71 million, an increase of 4.4% from the adjusted February number of 5.47 million. NAR Chief Economist Lawrence Yun attributed the solid sales during the month to strong gains in the Northeast and Midwest. “Although finding available properties to buy continues to be a strenuous task for many home buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.” Sales of single-family homes rose 4.3% to a seasonally adjusted annual rate of 5.08 million from 4.87 in February, marking 6.1% higher sales over the same month in 2016. Condo sales also increased, growing 5.0% to a seasonally adjusted annual rate of 630,000 units, a 5.0% annual gain. The median existing-home price for all housing types […]
The Q1 2017 U.S. Home Sales Report released by ATTOM Data Solutions reveals that the typical U.S. home seller earns 24% return on their investment (about $44,000 per sale), which is the highest profit for home sellers since the middle of 2007. According to Daren Blomquist, Senior Vice President for ATTOM Data Solutions, many homeowners aren’t ready to sell to home buyers despite the increased ROI, which is causing the market’s ever-worsening inventory problem. “The first quarter of 2017 was the most profitable time to be a home seller in nearly a decade, and yet homeowners are [staying] in their homes longer before selling,” Blomquist commented. “This counterintuitive combination is in part the result of the low inventory of move-up homes available for current homeowners, while also perpetuating the scarcity of starter homes available for first-time homebuyers.” Nonetheless, Blomquist reports some promising signs that inventory may be loosening up. “There are some early signs this inventory logjam may be loosening up in some markets,” Blomquist said, “with the average homeownership tenure down from a year ago in nine of the 66 markets we analyzed, including Memphis, Dallas, Boston, Portland, and Tampa. Sky-high potential price gains may be finally prompting more […]
In a surprising move, Fannie Mae announced its new programs to make it easier for consumers to qualify to be first time home buyers, or pay off their student loans via a refinance. The new program is called Student Loan Solutions. This is undoubtedly fantastic news for Americans who hold some of the $1.4 trillion in student loan debt. Effective immediately, Fannie Mae is easing the home loan process with three major changes so that becoming home buyers or reducing student loan debt may become a reality. Change #1: Student Loan Payment Calculation Fannie Mae has changed how lenders calculate student loan payments. Whereas before the change, mortgage lenders had to use 1% of the outstanding balance or the fully amortizing repayment amount, now lenders can calculate debt to income ratio (DTI) based on the student loan payment just as it appears in the credit report. This is good news for borrowers on an income-driven repayment (IDR) plan such as PAYE and REPAYE. Change #2: Student Debt Paid By Others In the case that a parent or other third party pays the bill, Fannie Mae is disregarding the payment altogether. That applies not only to student loans, but payments for […]
The most recent GDP numbers report a meager 0.3% increase in consumer spending for the first quarter of 2017 – the smallest amount since 2009. But economists are counting this as good news. While it may seem contrary, a closer look at what consumers spent less money on tells the real story. For example, they spent less on things like gasoline, winter heating bills, and out-of-season clothing- all things consumers would prefer to spend less money on in the grand scheme of things. It’s true that the scant jump in GDP is far below the 3.5% increase reported at the end of 2016 and leaves the increase in growth at a low 0.7%. However, a close look at the details reveals that the drops in spending are in the “right” places. Americans cut spending on gasoline by $6 billion in the first three months of this year, which is a result of lower prices at the pump – a good thing for U.S. citizens. An atypical warm weather trend allowed households to use less fuel to heat their homes. February was unusually the second hottest on U.S. record. The result was lowered spending on “housing and utilities”, with a drop […]
The U.S. Treasury has received billions in profit from post-crisis Fannie Mae and Freddie Mac revenues – and investors are suing for it. For decades, Fannie Mae and Freddie Mac helped in causing a steady rise in home buyers—until the subprime crisis hit and Fannie and Freddie were on the hook for billions in losses. Legislators swore to reorganize the two companies and some planned to phase them out entirely. However, over eight years later, Fannie and Freddie still operate under government control—and they’re now a bigger part of the system, guaranteeing payment on nearly 50% of all U.S. mortgages, an increase from 38% before the crisis. There is one crucial difference: Any profits the companies generate go to the government instead of investors. In 2012 the government altered the terms to say that every quarter Fannie and Freddie would send Treasury all their profits except for a certain amount of money kept in reserve. That reserve started at $3 billion in 2013 and was scheduled to fall by $600 million every subsequent year, until hitting zero in 2018. The latest payment, a combined $9.9 billion to the U.S. Treasury at the end of March, made the total amount of […]
The proposal, GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market, was released by the Mortgage Bankers Association (MBA), offering a detailed outline of a secondary mortgage market that MBA believes could emerge reformed and revitalized if changes are instituted. In the spotlight are two critical areas: the appropriate transition to the reformed system, and the role of the secondary mortgage market in advancing an affordable housing strategy. Anxious to create a sustainable solution regarding the government’s role in the housing industry that doesn’t create a reprise of the errors that led to the financial crisis, MBA Chairman Rodrigo Lopez CMB, Executive Chairman of NorthMarq Capital, stated that the paper “…not only lays out a detailed end state solution that will work for the residential and multifamily markets, but also the transition steps to accomplish this goal.” MBA’s proposed approach to GSE Reform includes specific changes that will: Introduce considerably higher levels of risk-bearing private capital into the mortgage system, aiming to drastically reduce the system’s reliance on government support. Heighten the stability of the mortgage system with numerous Guarantors that will function as privately-owned utilities. Better the level of service and performance in the secondary mortgage […]
Mortgage applications for new home purchases rose 6.7% in comparison to March of 2016 according to the recently released Builder Application Survey (BAS) for March 2017. Compared to February of this year, mortgage applications soared by 23% relative to the previous month. These changes do not include any adjustments for usual seasonal patterns. Based on data from the BAS, the Mortgage Bankers Association (MBA), which conducts the survey, estimates new single-family home sales hit a seasonally adjusted annual rate of 670,000 units in March 2017. The seasonally adjusted estimate for March marks an increase of 14.3% from February’s pace of 586,000 units. On an unadjusted basis, the MBA estimates that there were 62,000 new home sales in March 2017, an upsurge of 21.6% from 51,000 new home sales in February. “Mortgage applications for new homes accelerated in March, with the Builder Application Survey Index reaching its highest point since the series began in August 2012,” commented MBA’s Vice President of Research and Economics Lynn Fisher. “The pick up from a fairly modest February showing suggests that developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale in the US. […]
Despite 2016’s strong pace of home sales – the highest in a decade – there was a marked drop in activity from vacation home buyers, according to an annual second-home survey released by the National Association of Realtors® (NAR). NAR’s 2017 Investment and Vacation Home Buyers Survey revealed that vacation home purchases last year decreased to an estimated 721,000, down 21.6% from 2015 (920,000) while investment-home sales in 2016 rose 4.5% to 1.14 million. Owner-occupied purchases bounded upward 12.5% to 4.21 million last year – the highest level since 2006 (4.82 million). The two highest cited reasons for buying a vacation home were a) vacations or as a family retreat (42%) and b) future retirement (18%). Investors, on the other hand, purchased to generate income through renting (42%) and for potential price appreciation (16%). “The ability to generate rental income or remodel a home to put back on a market with tight inventory is giving investors increased confidence in their ability to see strong returns in their home purchase,” commented Lawrence Yun, NAR Chief Economist. The NAR survey additionally implicated that vacation and investment buyers were more inclined to use their property as a short-term rental in 2016. Forty-four percent […]
The Consumer Financial Protection Bureau just released its proposal intended to make the adoption of mortgage data reporting requirements – set to take effect in January, 2018 – less complicated. While it does add more data points to be reported, the CFPB’s new HMDA rule will make reporting data online easier. “The Home Mortgage Disclosure Act (HMDA) shines a much-needed spotlight on the mortgage market, which is the largest consumer financial market in the world,” CFPB Director Richard Cordray said in a statement. “Today’s proposal reflects the bureau’s ongoing and substantive engagement with stakeholders in the marketplace, and will help [the] industry meet its new reporting obligations.” Under the 1974 Home Mortgage Disclosure Act (HMDA), the CFPB introduced new data reporting requirements in the fall of 2015 In it, the CFPB updated existing rules which will force mortgage lenders to provide information on the subject property’s value, loan terms, prepayment penalty terms and the duration of teaser (or introductory) interest rates. The HMDA was intended to speak to problems minorities faced in gaining access to a mortgage. It requires lenders to collect data from the purchase, home improvements and refinancing as well as report that data to federal regulators. However, […]
Fannie Mae’s Q1 2017 Mortgage Lender Sentiment Survey reveals that mortgage lenders are more confident in the economy than ever. Learn why in this article.
The recently published April Mortgage Monitor revealed that mortgage servicers are having difficulty retaining customers post-refinancing.
With home prices that are rising faster than incomes and mortgage rates nearly three-quarters of a point higher than just a few months ago, new borrowers are on the hunt for the best deal they can get on home loans.
The Market Composite Index, which tracks mortgage loan application volume, increased 3.3%, taking into account a seasonally adjusted basis from the previous week.
FHA’s mortgage share is on the decline. However, that may turn out to be the good news, FHA’s portion has decreased to 20% as of the most recent reports.
In recent interviews, Fed Chairwoman, Janet Yellen, gave clear indication that, barring any dramatic and unexpected changes in the economic reports, the central bank would lend an increase in rates.
According to the MCAI, credit availability increased in March led by a swell in jumbo mortgage loans and an uptick in government loans.
Data reveals that purchase mortgage loans spiked to a 57% share of all mortgage loan originations in February, an increase of 5 percentage points.
Generation X is finally on the mend and on the move. Young Boomers are buying homes with enough room for their adult children to live with them. Millennials are heading to the suburbs with their kids. All this was revealed in a recent study by the National Association of Realtors® (NAR), the 2017 Home Buyer and Seller Generational Trends, which evaluates the generational differences of recent home buyers and sellers.
Consumer spending fell short of January’s projections as rising prices hit Americans where they feel it most – the wallet. As a result, leading inflation-adjusted purchases dropped by the largest margin since September of 2009 when it sank a full 1%. The 0.2% advance in spending followed a 0.5% increase in the prior month, the Commerce Department reported on Wednesday in Washington.
Despite persistently low inventories of homes for sale and recently increased mortgage rates, new construction sales rose 6.1% on the month and increased an impressive 12.8% on the year, according to the Census Bureau. The Midwest led the charge, with sales increases of close to 31% month over month and more than 50% on the year. Transactions in the Northeast fell just over 21% in February from January but were still up.
Mounting consumer consciousness and demand for sustainable, green properties is spurring an exchange of ideas between Realtors® and homebuyers and sellers. Over 50% of Realtors® find that consumers are interested in real estate sustainability issues and practices, according to the National Association of Realtors®’ (NAR) recent REALTORS® and Sustainability report.
Ben Carson has officially been awarded the title of the 17th secretary of the Department of Housing and Urban Development after a majority Senate vote of 58-41 and will begin immediately serving his term with the housing agency.Securing one of the few remaining cabinet members left to be approved, Carson’s inaugural first day is scant more than a month after President Donald Trump was sworn into office.
The most recent Millennial Tracker report released from Ellie Mae indicates that the mortgage market FHA loans are on the rise – and will likely continue to be – as increasing numbers of Millennials take on the rite of homeownership. Millennials, who make up a growing number of homebuyers in the U.S., are leveraging FHA loans to maximize the advantages of lower down payments and lower average FICO score requirements.
Markets are more confident that there is a 94% likelihood of a rate hike this month, up from 40% a week ago. Much talk has been had about the possibility of a rate spike in March and as the time looms closer, evidence shows that the probability is ever more likely. Janet Yellen, Chairman of the U.S. Federal Reserve, has given the strongest indication to date that policymakers will indeed raise interest rates this month.