November 7, 2017
Weathering the Storms
The storms are over. The regions hit by the storms are recovering to various degrees. We all thought that the third quarter would see a pause because of the storms' devastation. However, with a preliminary reading of 3.0% economic growth, a lot of forecasters were surprised. What this number tells us is one of two things. First, the national economy could be a lot stronger than we were thinking and should sprint in the fourth quarter. Or, since the hurricanes hit during the second half of the quarter, we may see a downward revision of this preliminary number.
We do know that the storms negatively affected the jobs numbers for September. We felt that October's numbers would give us a better reading of the storms' damage -- with the revision of September's numbers just as telling as the October results. It is hard to accomplish accurate surveys when people are in shelters and the power is out. So, how did the report come out? Indeed, the numbers for October were as expected, with an upward revision to September's dismal numbers and a bounce back for October.
Looking at the two months together, we had approximately 140,000 jobs added each month, which is about 50,000 less than the previous year's average. Wage growth for the month was dismal but the unemployment rate dropped one more time. Again, we expect additional recovery as the year ends, which is important because the latest meeting of the Federal Reserve indicated that they are still on track to raise rates one more time this year, and that means December, which is the only remaining meeting date. Add that to a new Fed Chairman nomination and haggling over the tax plan -- especially the mortgage interest deduction -- and it should be a very, very busy end of the year.
Rates were flat in the past week, with the markets on hold before the jobs report and Federal Reserve releases. For the week ending November 2, Freddie Mac announced that 30-year fixed rates remained at 3.94%. The average for 15-year loans rose two ticks to 3.27%. The average for five-year adjustables also increased two ticks to 3.23%. A year ago, 30-year fixed rates averaged 3.54%. Attributed to Sean Becketti, chief economist, Freddie Mac -- "Following a strong surge last week, rates held relatively flat this week. The rate on 30-year loans remained unchanged at 3.94 percent, while the 10-year Treasury yield dipped roughly 4 basis points. The markets' reaction to the upcoming announcement of the next Fed chair may impact the movement of rates in next week's survey." Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.
Current Indices For Adjustable Rate Mortgages
November 3, 2017
|6-month Treasury Security
|1-year Treasury Security
|3-year Treasury Security
|5-year Treasury Security
|10-year Treasury Security
|| 1.798% (Sept)
|| 1.002% (Sept)
|11th District Cost of Funds
|| 0.732% (Aug)
|| 4.25% (June)
| In its most recent study, Zillow Group examined the newest generation to enter the housing market – Generation Z. Wait, what? Already? Are they even old enough to enter the housing market? As it turns out, yes, they are. Generation Z is considered to be those born from 1995 to 2010, meaning the oldest in the generation are now 22 years old. The Zillow Group Report on Consumer and Housing Trends 2017 shows this new generation now makes up more than 21% of the U.S. population, and is the most ethnically and racially diverse generation in our history. And they are beginning to enter the housing market as renters. However, this generation is just as likely as older generations to say owning a home is a key component of the American Dream. In fact, 57% responded that they already considered buying a home while looking for their last rental. “It’s encouraging to see that Generation Z is inheriting the same notion of what home means as their parents and Millennial siblings,” Zillow Chief Marketing Officer Jeremy Wacksman said. The 2017 Zillow Group Report is the second annual survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them and what frustrations and aspirations color their decisions. Source: HousingWire
Finding and evaluating a home improvement contractor is a difficult process. Do it right, and you will be happy with the work. But do it wrong, and your project could be a nightmare. Unfortunately, most people don’t have a clue how to go about it. According to a survey of its members by the National Association of the Remodeling Industry, customers are asking the wrong questions. The most common ones: When can you start? When will you finish? What time will you start each morning? What time will you stop working for the day? Are you going to work every day? Can you finish by a certain date? How much will it cost per square foot? In other words, “How fast and how much?” Certainly, these are important questions, to which you will want answers. But there are far more important things you need to know. After all, you are not only going to be inviting a stranger into your home, you are asking the contractor to rip up your house and interrupt your life, perhaps for a long period of time. Here’s what you really need to ask. Ask for the contractor's license number and confirm it is valid and current. Verify the experience of the contractor and how long they have been in business. Also confirm their insurance is up-to-date and obtain referrals. Source: Lew Sichelman, UExpress
A new study by Redfin has concluded it is more cost-effective for students at some public colleges to buy their own condo rather than rent an on-campus dorm room. According to Redfin, dorm rents range from $232 to $1,817 per month, with a median monthly rate of $705. Redfin compared the monthly dorm rate at 195 public colleges with the median monthly payment on a condo in each of those cities and found 47 locations where owning was a better financial option than renting. Redfin real estate broker Misty Hurley noted that this solution could ultimately benefit students in their post-college lives. “Homeownership can be a great way to build wealth,” said Hurley. “Students will build equity that they can one day use as a down payment on a move-up home or to pay off student loans. If they choose not to sell right away, they’ll have a piece of property that’s ripe for renting, as there are always new college students looking for rentals.” Source: National Mortgage Professional