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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

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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%!

Weekly Mortgage Update: November 6th, 2017′

November 7, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – NOVEMBER 6, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (NOVEMBER 5TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Last week saw a torrent of data and news flowing into financial markets, and while most of it was positive, mortgage rates mostly shrugged.
  • Assuming Senate confirmation, Jerome Powell will be the next Federal Reserve Chair. All indications point to no significant change in the Fed’s trajectory. The Fed also met last week with little change to policy.
  • The monthly employment numbers did see a revision into positive territory for September and 261,000 new jobs for September. While certainly substantial, some market participants were hoping for even more new jobs.
  • The ISM Indices split direction with services edging upward and manufacturing slipping downward, but remaining at a solid 58.7.
  • We’re seeing a bit more international data, including a rate increase from the Central Bank of England, which appears to be supporting the notion that foreign economies are gaining steam.
  • This week is fairly light in terms of economic data. We may see markets pushed around as the stream of news regarding tax reform heats up, but rates are not like to move all that much in response.

PROFILE OF HOME BUYERS AND SELLERS

In the recent release of its annual Profile of Home Buyers and Sellers, NAR researchers found some interesting tidbits. Homebuyers continue to remain in their home an average of 10 years after hitting a low of 6 years in 2009. The average time a home remained on the market dropped to a historic low of 3 weeks. The age of repeat buyers continues to climb and now stands at an all-time high of 54. Buyers and sellers using agents remained at historic highs of 87% and 89%.

Weekly Mortgage Update: October 30th 2017′

October 31, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – OCTOBER 30, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (OCTOBER 29TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates moved upward last week, as economic news continued to point toward improving economic conditions.
  • For the first time since 2014, GDP posted back-to-back increases of 3.0% or better.
  • New Home Sales blew by expectations, growing 18.9%. Additionally, announcements from the European Central bank bolstered the view that their economy is also on a solid recovery track.
  • This week is a big week for economic data and events. Consumer Confidence, ISM Index, and the monthly employment report are all due against a backdrop of a Fed meeting and the potential for an announcement of the next Fed Chair.
  • There is almost zero expectation of any change in interest rates from the Fed, buts odds for a December increase have moved to nearly 100%.
  • After last month’s surprise drop in new jobs for September, many analysts are expecting a significant revision upward into positive territory or an outsized increase in new jobs for last month.
  • If that fails to materialize, then we may see any upward rate trajectory slowed, and market optimism muted somewhat.

PLAN NOW TO AVOID THE DOUBLE WHAMMY

This hurricane season provided a painful reminder that things don’t always go as planned. Sadly, many people only discover what their homeowners’ policy doesn’t cover after they need to make a claim. From natural disasters to sewer backups to rotten odors, it’s best to know where the gaps are in your coverage and fill them, before you need it.

Weekly Mortgage Update: October 23rd, 2017′

October 23, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – OCTOBER 22, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (OCTOBER 22ND, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgages rates were slightly up last week, with stock markets pulling some cash out of bonds.
  • Industrial Production did step somewhat higher, and the Beige book noted improvement in one Fed district.
  • Existing Home Sales did manage a small uptick, while Housing Starts moved in the opposite direction.
  • Storm-related issues appear to continue to impact some indicators, including weekly jobless claims and the Leading Economic Indicators.
  • To the frustration of some, we seem to be plodding along the same economic course that we have for years. While it may lack pizzazz and great headlines, we have had continued economic growth, job growth, and low inflation.
  • This week, we may see mortgage rates tick up slightly, especially if stock markets continue to rocket higher, as they did last week.
  • However, if the first estimate of last quarter’s GDP hits 3.0%, which is above most economists’ expectations, then we would see rates flaring higher.
  • However, if GDP drops below 2.0%, we could see mortgage rates end the week on a downward trajectory.

WHERE IS IT THE MOST EXPENSIVE TO BUILD A HOUSE?

The National Association of Home Builders analyzed all the data from 2016 to discover what it costs to build a house around the country. The most expensive was a contractor-built home in the Pacific region, coming in at $164 per square foot, excluding improved lot costs. The cheapest homes were spec homes built in the in the East South Central (VA, TN, AL, and MS) coming in at $91 per square foot. The national average worked out to be $101 per square foot.

Weekly Mortgage Update: 10/08/2017′

October 10, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – OCTOBER 8, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (OCTOBER 8TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates appear to be trending upward as the majority of economic data from last week pointed to solid economic growth.
  • Both of the ISM Indices stepped on the accelerator, powering past expectations.
  • The unemployment rate dropped to 4.2%, with both the participation rate and hourly earning bumping upward. Against this backdrop, analysts pointed to hurricane-related distortions to explain the 33,000 jobs lost in September.
  • While this is very likely to be the case, the bond market seems to be more hesitant than the stock market to celebrate and make significant moves.
  • If this week’s Retail Sales number blows past expectations like the ISM readings, then rates are very likely to continue moving upward.
  • It may be worth noting that the president is considering potential candidates for the Federal Reserve, along with the option of keeping the current chair. While making an appointment in the coming weeks is expected, if Trump decides to hold off on making an announcement, the market might get a little nervous, and that could keep rates from rising too much.

REAL ESTATE BACKED CRYPTOCURRENCY?

With news and investors all abuzz about Bitcoin and other cryptocurrencies, a company launched this summer called REcoin Group that pitched a currency called REcoin. They billed it as “first ever cryptocurrency backed by real estate.” While the concept of backing a currency with something of tangible value, like real estate, may seem like a great idea, the SEC has charged the company’s CEO with fraud. Right now, there are no cryptocurrencies backed by real estate.

Weekly Mortgage Update: 09/24/2017′

September 25, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – SEPTEMBER 24, 2017

Weekly Mortgage Watch - September 24, 2017Click here to download the PDF.

FIRST TEAM’S WEEKLY MORTGAGE WATCH (SEPTEMBER 24TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Many economists breathed a sigh of relief when the Federal Reserve finally announced the start of its long path to winding down its gigantic portfolio.
  • With inflation unexplainably muted, the Fed has been able to remain “accommodative” for an extended period. Indeed this has become the third longest recovery in recorded US history.
  • However, the economy moves in cycles, and another downturn will happen, although we don’t know when.
  • According to experts, if the next downturn starts before the Fed “normalizes” its policies and portfolio, the tools at the Fed’s disposal to fight a recession could be very limited.
  • Last week’s move likely marks the beginning of rates trending upward. Of course, the last few years have demonstrated how difficult predicting rates can be.
  • This week will likely start with rates continuing to move slowly upward. The final estimate of the second quarter’s GDP is due, and if it adjusted over 3.1%, then rates could move higher even quicker.
  • The increase could accelerate if Consumer Confidence numbers surprise on the high side again.

THE WINNERS OF MONEY MAG’S BEST PLACE TO LIVE

Money Magazine’s annual “Best Places to Live” report was released last week. This year, Fishers, IN took the top spot. The magazine’s researchers analyze eight areas to come up with the best place to live, including economy, cost of living, education, housing, crime, convenience, recreational and cultural amenities, and an overall sense of pleasantness. Rounding out the top six are Allen, TX, Monterey Park, CA, Franklin, TN, Olive Branch, MS, and Dickinson, ND.

Weekly Mortgage Update: 09/17/2018

September 18, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – SEPTEMBER 17, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (SEPTEMBER 17TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Both Retail Sales and Industrial Production headed lower last week, with mortgage rates holding steady in the face of mounting domestic uncertainty.
  • The hurricanes, political turmoil, and the potential for a new Fed Chair in February are creating questions for both economic growth and the Fed’s plans for next year.
  • While the 3rd quarter does appear to be softer than the previous one, August’s data did sport a little bit of inflation. This coupled with improvements in international economies could begin to create a floor for rates, even if the US economy sputters a bit.
  • This week, the Fed meets to discuss monetary policy. The market is expecting no change to the Fed’s interest rates, but we could see some more details or insights into when and how the Fed will begin to unwind its massive financial portfolio.
  • Should the Fed choose to continue to reinvest proceeds, then rates could trend just a bit further downward.
  • It’s worth beginning to pay a bit more attention to foreign economies. Some experts are expecting their gains to benefit our economy.

THE BEST PLACES TO LIVE AS A SENIOR

Looking for the best place to live out your golden years? The SeniorScore™ from SeniorAdvice.com is the first livability index designed for retirement years. The index factors in over 100 data points from multiple sources and separates them into four groups: health and safety, recreation and leisure, finances, and general quality of life. Rankings include cities and states with Virginia, Hawaii, Nebraska, Oklahoma, and Kansas currently topping the state list.

Weekly Mortgage Update: 09/11/2017′

September 11, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – SEPTEMBER 10, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (SEPTEMBER 10TH, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Hurricanes and wildfires certainly have devastating consequences for those impacted, and we don’t want to discount the tragedy or human stories that accompany these events.
  • From an economic standpoint, however, the national impact is historically limited. Of course, these aren’t normal times and these events are gigantic and widespread.
  • Because we don’t have a clear idea of what the impact will be, we are seeing some money flowing into the relative safety of treasuries and bonds. In many ways, more uncertainty is creeping into the market.
  • Will Washington be able to accomplish anything meaningful to improve the economy? Why does the economy continue to power ahead without generating any significant inflation? All of these unknowns appear to be helping hold rates low. We may have more of the same this week.
  • The wider spread the devastation is in the southeast, the more likely we are to see rates continue to be pulled slowly downward.
  • However, if we get that surprise jumps in the Producer and Consumer Prices Indices, then rates might move upward.

IS YOUR IDENTITY AND CREDIT AT RISK?

Last week, Equifax revealed that it was hacked, and up to 143 million people may have had their information stolen. The data theft snagged names, social security numbers, birth dates, driver’s license numbers, and addresses. The company has responded by launching a website that enables consumers to find if their data was part of the breach. Visit EquifaxSecurity2017.com to learn more, and also be sure to pull your free credit report at AnnualCreditReport.com.

Weekly Mortgage Update: 09/05/2017′

September 5, 2017dillonBlog0

WEEKLY MORTGAGE WATCH – SEPTEMBER 3, 2017

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FIRST TEAM’S WEEKLY MORTGAGE WATCH (SEPTEMBER 3RD, 2017) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Last week saw mortgage rates creep slightly downward, even with some strong economic news.
  • The ISM Manufacturing Index surged higher, and Consumer Confidence stepped upward again.
  • This was coupled with GDP being adjusted upward more than expected to a solid 3.0% for the 2nd quarter. However, other data and news helped pull rates downward.
  • The number of new jobs created in August fell short, and the two previous months were notched downward.
  • Inflation continues to be so negligible, that odds of the Fed raising rates again this year are sliding downward.
  • All of this comes against the backdrop of North Korea testing another nuclear weapon and concerns regarding the impact of Hurricane Harvey. Partially due to these events, investors shifted money into the relative safety of US Treasuries and bonds, even though the events may have limited economic impact.
  • This week is much lighter on the economic front, and with most of the critical monthly data behind us, rates are more than likely to drift about, in a very tight range, unless something dramatic happens.

PRESSURE FOR ALTERNATIVE CREDIT SCORING MOUNTS

America’s Homeowners Alliance, a coalition of 15 housing and finance associations, is ramping up the pressure on the Federal Housing Finance Agency (FHFA) to approve the use of alternative credit scoring models at Fannie Mae and Freddie Mac. The FHFA appears to be pushing out the date that the models could be implemented. The Alliance believes that implementing the alternative models could help stem the decline in the homeownership rate of some groups.

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