FIRST TEAM’S WEEKLY MORTGAGE WATCH (MARCH 4TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:
- While rates stepped higher again last week, they spent part of the week looking as if they might drive even further upward.
- In his first testimony to Congress, the new Fed Chair, Jay Powell, expressed that he is increasingly optimistic that the US economy will continue to experience strong growth, and that he is confident that inflation will hit the Fed’s target level relatively soon.
- Coupling this with a strong reading from the ISM Manufacturing Index, and Consumer Confidence returning to levels not seen since 2000, rates could have moved even higher.
- However, comments from the President about the potential of starting a trade war dampened market enthusiasm in both stocks and bonds.
- This week could end up focused on the potential for a trade war. The likely result of one could be higher prices.
- As markets are already concerned about inflation, the more aggressive stance that the US takes against imports, the more likely that rates may rise. However, if the details are less aggressive than feared, rates might retreat. Of course, a strong employment report could change that.
HOME PRICES PASS HISTORIC PEAK LEVELS
In the third quarter of last year, average home prices passed their peak level from 2006. The Great Recession saw home prices across the nation fall by an average 33%. However, the rebound is not evenly distributed. Illinois, Nevada, Florida, and Arizona still remain below their historic highs, and almost 2.5 million homes are still underwater. Other states faired better, like North Dakota which only dropped 2% during the recession and is now up 48% since 2006. > Historic Peak Levels
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FIRST TEAM’S WEEKLY MORTGAGE WATCH (JANUARY 28TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:
- Market momentum and positive economic news continue to press interest rates higher, with little relief on the horizon.
- While the first GDP estimate for the final quarter of 2017 did come in at 2.6%, which was lower than expected, markets shrugged it off.
- We still have two more estimates before the final reading, and other economic data point to upward revisions in the offing.
- Inflation data in the GDP report also point to firming pressures that may push the Fed to more rate increases this year.
- This week is jam-packed with economic news and data.
- Changes in language are expected in the Fed’s policy statement that would push odds of a March rate hike to near 100%.
- While chances of an increase this month are low, an unexpected hike by the Fed would certainly drive all interest rates even higher.
- The ISM Manufacturing Index is expected to slip, but as long as the slip is less than 1.0 point, the impact will be muted.
- Friday’s Employment report could easily send rates even higher if November’s new jobs number is adjusted upward and December’s comes in over 180,000.
ARE OLD BUILDINGS WORTH PROTECTING?
The January 10th demolition in Whitefish, MT of a building designed by architecture legend, Frank Lloyd Wright, highlights the tension between owners and preservationists. The tension often balances between the rights of owners, perceived historical value, potential market value of the land upon which the building sits, and the cost of maintaining or renovating. Unbeknownst to many, even a building on the National Register of Historic Places can be demolished.
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FIRST TEAM’S WEEKLY MORTGAGE WATCH (JANUARY 21ST, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:
- Mortgage rates continue to move upward as the third-longest economic expansion on record powers along.
- With global economies also growing, major interest rates are all trending upward.
- Last week, average 30-year mortgage rates stepped over 4%.
- The cold winter weather helped propel Industrial Production numbers higher than expected, and weekly jobless claims fell to a 45-year low.
- Market sentiment remains on the positive side, with equities on a march to set new high after new high.
- With the long-held axiom that markets hate uncertainty, one might believe that the government shutdown would hurt equities, drive more cash into the relative security of treasuries, and pull rates downward. However, it appears that markets have simply accepted that Washington is dysfunctional.
- Should the week’s economic news prove to be positive, we are very likely to see rates continuing to step upward. This would be especially true if Congress can get a deal in place to fund and reopen the government, and especially true if the week ends with GDP coming in over 3.0%.
FORECLOSURE RATES ARE DOWN
Across the US, the foreclosure rate has been steadily heading downward. On a national basis, the foreclosure filings, which include default notices, scheduled auctions, and bank repossessions dropped to a 12-year low. In 2017, only 676,535 properties faced foreclosure, compared to almost 3 million in 2010.