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Weekly Mortgage Update: March 26th 2018

March 27, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – MARCH 26, 2018

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (MARCH 25TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates may be moving back into neutral after last week’s meeting of the Federal Reserve.
  • As expected, the Fed raised its interest rates which had little impact on mortgage rates.
  • The bigger news from the gathering was that the Fed Governors’ predictions continue to show a split on how many rate increases to expect this year. Markets are now betting on only two more rate increases this year.
  • While the economy started 2018 with a bang, it appears to have significantly decelerated, potentially to under 2%. This makes the probability of inflationary flare-ups less likely and could help keep rates flat for a while.
  • However, even if the economy does shift into a lower gear, the potential of a trade war, with China scaling back US Treasury purchases, could push interest rates upward.
  • Final GDP numbers for the last quarter of 2017 are due this week. With the reduced concerns around accelerating growth, a reading of less than 2.2% could help push mortgage rates downward.
  • However, political news could push rates either way, especially if we see more threats of a trade war.

ADULTING IS INHIBITING HOUSING FOR YOUNGER FOLKS

According to the latest from Freddie Mac, the housing market is being held back to some degree by the financial challenges facing younger generations. Since 2000, young adults’ average annual expenditure has climbed by 36%, with both housing and healthcare more than doubling. Add in skyrocketing education costs and debt, coupled with lower labor market participation rates, and young people are having a more challenging time accessing the housing market.

Weekly Mortgage Update: March 7th, 2018

March 7, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – MARCH 7th, 2018

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

Weekly Mortgage Update: January 28th, 2018

January 29, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – JANUARY 28, 2018

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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.

Weekly Mortgage Update: 01/23/2018

January 24, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – JANUARY 23, 2018

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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.

Weekly Mortgage Update: January 14th, 2018′

January 17, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – JANUARY 14, 2018

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (JANUARY 14TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates moved upward last week.
  • Economic news continues to point toward solid economic growth both here and abroad, with some signs that inflation may finally be taking hold.
  • Retail Sales grew 0.4%, right in alignment with expectations.
  • While both the Consumer and Producer Price Indices’ headline numbers were soft, the core readings revealed some increasing price pressures.
  • International news also pressured rates upward. The European Central Bank has tagged September as the end of their quantitative easing program, and Japan is showing signs of ending its long program of holding rates at zero.
  • Markets got a little spooked when news broke that China, the world’s largest investor in US treasuries, was considering trimming its purchases. Chinese officials denied the news.
  • This week would easily see rates continuing to march slowly upward, especially if we see Industrial Production numbers beat predictions.
  • Additionally, if weekly jobless claims drop back below 250K, easing labor market concerns, mortgage rates will feel even more pressure to climb higher.

SOCIETAL OCD KICKING IN THE KITCHEN

The 2018 U.S. Houzz Kitchen Trends Survey revealed that the number one priority in the kitchen is storage. While we love our kitchen gadgets, tools, and appliances, clutter in the kitchen seems to be driving us crazy. The growth in sales of recycling baskets, cookie sheet organizers, revolving corner trays, drawer organizers, and pull-out or swing-out trays and shelves supports these results. Runners-up for kitchen priorities include easy-to-work in, entertain in, and clean.

Weekly Mortgage Update: January 7th, 2018

January 8, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – JANUARY 7, 2018

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (JANUARY 7TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates launched into 2018 with a small dip. Despite another week of mostly positive economic data, rising stock markets, and many other interest rates moving upward, mortgage rates moved slightly downward.
  • While much hay was made over the under-expectations employment report, the sub-par 148,000 new jobs number will likely be revised higher in the coming months, as December’s data is often incomplete.
  • The ISM reports split direction with manufacturing surging ahead and services cooling. Both remain well on the “expansion” side of their equations.
  • Some of the trepidation of raising mortgage rates may have come from the minutes of the last Fed meeting.
  • There was ample concern about how the tax bill may impact the economy, which adds to future uncertainty.
  • This week is likely to see rates working to move upward. However, the lack of growing inflationary pressure seems to be significantly helping hold rates in check.
  • If the Producer and Consumer Price Indices reveal another month of non-threatening prices increases, rates could even dip slightly.

FINDING YOUR PERFECT WORK-LIFE BALANCE

Looking for that work-life balance? SmartAsset released an analysis attempting to find the perfect cities for perfect balance. The factors studied included the concentration of entertainment establishments, bars and restaurants, housing costs, home values, average weeks worked, average hours worked, average commute times, unemployment rate, and labor force participation rate. The top cites are Madison, WI, Lincoln, NE, Omaha NE, Lubbock, TX, and Columbus, OH.

Weekly Mortgage Update: 01/02/2018′

January 2, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – DECEMBER 31, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (DECEMBER 31ST, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • 2017 ended with mortgage rates remaining at astonishingly competitive levels. Despite year-after-year predictions that rates would be climbing, we’ve finished another year with low rates.
  • Much of last week’s increase was due to traders locking in profits, as the one economic report, Consumer Confidence, posted a significant decline, which was likely due to the drama about the tax legislation.
  • This week starts with the ISM Manufacturing Index and ends with the monthly employment data.
  • According to some models, GDP for the fourth quarter may be running at 2.8%. If this week’s data reveals that December was a better month than expected, then we could see those models adjusted upward to 3.0% or better.
  • This would be significant as we haven’t seen three quarters with 3.0% GDP or better growth since 2004-2005.
  • As we watch pundits and experts make their predictions for rate trends in 2018, it is well worth noting that we are in completely uncharted economic territory. The most important thing, when dealing with mortgages, is to work with someone that you trust.

LOAN LIMITS MOVING UPWARD AGAIN

Every year, Fannie Mae and Freddie Mac adjust their loan limits. This year the limits will be raised by about seven percent. The standard loan limit is increasing from $424,100 to $453,100. In high-cost areas, the limit can go as high as $679,650. The Federal Housing Administration is required to match the Freddie and Fannie limits, so FHA loan limits will also rise. Want to know what this means for you? Please give me a call and we can discuss how this impacts you.

Weekly Mortgage Update: November 27th, 2017′

November 28, 2017dillonBlog0

WEEKLY MORTGAGE UPDATE – NOVEMBER 27, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (NOVEMBER 26TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates remained mostly flat during the holiday week. However, we did see some signs of more volatility to come.
  • The minutes from the last meeting of the Federal Reserve revealed some concern about the length of time that inflation has remained muted. Some members seem to believe that they need to start pushing rates upward, while others are concerned about raising rates.
  • The Conference Board’s Leading Economic Indicators jumped upward, which may point to more economic momentum than previously thought. This was the largest increase in the LEI since 2014.
  • We end November and start December next week with many important data points. GDP is expected to notch higher for last quarter, and core PCE Prices are predicted to increase. If both of these come to pass, then rates might move upward for the week.
  • However, both the ISM Manufacturing Index and Consumer Confidence are expected to slip downward.
  • If all of this week’s expectations come in on target, then we are likely to see another week with mortgage rates moving in a tight range.

TIME TO HIT THE SLOPES WITH YOUR OWN PAD?

If you’ve ever dreamed of owning a vacation home in a ski resort town, do you really need big bucks? The answer is yes if you’re considering Aspen with its median home price of $2.1 million. On the other end of the spectrum, you could buy a pad in Harrison, MI, near Snow Snake, for $64,000. Or, you could plunk down $94K for a median-priced home in Paoli, IN, near Paoli Peaks. Keeping under $100K, you could buy in Biwabik, MN, Malone, NY, or Scranton, PA.

Weekly Mortgage Update: November 20th, 2017

November 20, 2017dillonBlog0

WEEKLY MORTGAGE UPDATE – NOVEMBER 20, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (NOVEMBER 19TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates stepped slightly higher last week on mostly positive economic data mixed with some additional political uncertainty.
  • Retail Sales posted a 0.2% increase, while Industrial Production powered ahead by 0.8%.
  • Inflationary data revealed a continuation of upstream price pressure in the Producer Price Index, but not much is flowing through to the consumer level.
  • A few analysts are talking a bit more about the potential for inflation to flare in the coming months, but most experts don’t expect any dramatic increases.
  • All interest rates are very likely to increase, especially if the Fed continues even small rate increases, along with the slow unwinding of its massive portfolio.
  • The wide variances in the Senate and House tax plans, including the impact of housing also created some additional uncertainty, which may have generated a little extra upward pressure on rates.
  • The most important economic news of this week could be the Fed’s latest meeting minutes. If we see hints of a few more governors taking more hawkish stances, then rates would likely move upward.

IT’S A SELLER’S MARKET, BUT WHERE ARE THE SELLERS?

According to ValueInsured’s latest, Modern Homebuyer Survey, 79% of homeowners believe that now is a good time to sell. However, many are reluctant to put their home on the market. 72% of those who are interested in selling are concerned with “timing the real estate market.” Almost two in three believe that now is a good time to sell, but also believe that it is a bad time to buy. 61% are holding on and “waiting until prices to buy are better to make a move.”

Weekly Mortgage Update: November 12th, 2017

November 13, 2017dillonBlog0

WEEKLY MORTGAGE UPDATE – NOVEMBER 12, 2017

Click here to download the PDF.

FIRST TEAM’S WEEKLY MORTGAGE WATCH (NOVEMBER 12TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Last week saw average mortgage rates drift slightly downward. With limited economic data or news, markets appeared to focus more on the tax reform news flowing out of Washington.
  • The wide gaps between the Senate and House versions may have created some disappointment that the probability of a bill moving quickly through Congress has decreased.
  • We could see politics surrounding this tax bill playing a role in mortgage rates. If the process of reconciling the two versions becomes extremely acrimonious, and odds of having a bill to the President before the end of the year drop, we could see mortgage rates struggling to move upward, or at least muting any upward movement.
  • This week brings us the Producer and Consumer Price Indices, along with Retail Sales and Industrial Production.
  • If we get another unexpected flare upward in any of the inflation readings, rates could be pressured upward.
  • However, Retail Sales is expected to only post a very small increase, and if it comes in as a decline instead, then we could see mortgage rates drifting slowly downward.

WAS AFFORDABILITY BETTER IN THE LATE 1990’S?

According to new research from Black Knight, Inc., home affordability is better today than it was in the late 1990’s. While many people are concerned about increasing home prices, data reveals that buyers today need a smaller percentage of their median income for a down payment on a home. Currently, a homebuyer would need 21.4% versus 24.2% in the 1990’s. The payment-to-income ratio required for a mortgage payment has also dropped by 2.8%!

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