Sales sputtered, rate reprise & great gains

02-08-2019
DOWN DECEMBERPending home sales dropped 2.2% in December according to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI). The drop is due to several factors according to NAR Chief Economist Lawrence Yun who said, “The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December.” Yun predicts solid market activity for this year, adding, “The longer-term growth potential is high…the forecast for home transactions has greatly improved.”
RATES RISEThough mortgage interest rates trended slightly upward in Freddie Mac’s Primary Mortgage Market Survey for the week ending January 31, analysts note that the uptick is tempered by slowing home price appreciation and should not be a detriment to the spring home-buying season.
EQUITY ASCENSIONAmericans who sold homes in 2018 reaped the biggest profit in 12 years according to the Year-End 2018 U.S. Home Sales Report from ATTOM Data Solutions. Home sellers realized an average home price gain since purchase of $61,000 – up from $50,000 in 2017 and $39,500 in 2016. Last year’s average equity gains reached their highest level since 2006.
FEB FACTSOnce every six years, February is the only month that has four, full seven-day weeks. February ends on the same day of the week as October every year. In leap years, it’s the only month that begins and ends on the same weekday.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Hobbling home sales, market measures & date rating?

01-25-2019

DOWN DECEMBER

Existing home sales fell 6.4% between November and December and 10.3% year-over-year according to the latest National Association of Realtors’ (NAR) Confidence Index. NAR Chief Economist Lawrence Yun cited interest rate activity as the cause. “The housing market is obviously very sensitive to mortgage rates,” he said. “Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”

STAYING STABLE

Though mortgage interest rates are nearly 1/2% higher than a year ago, Freddie Mac is reporting that they were unchanged for the week ending January 17. The Primary Mortgage Market Survey credits a manufacturing slowdown and signals that the Federal Reserve may back off the pace of its own rate increases.

FORECLOSURES FLAT

The national delinquency rate dipped to its lowest rate since 2000 last month, according to Black Knight Financial Services (BKFS). December’s 3.9% U.S. mortgage delinquency rate was the lowest year-end number since the turn of the century, and 17.55% below 2017’s closing total.

PRE-APPROVED PEOPLE?

The answer to a whimsical question posed by creative market research agency Atomik Research in the December 2018 Homebuyer Sentiments Survey provides interesting insight into modern dating. Nearly half – 48% – of survey respondents answered “Yes” to this question: “Just like with getting a loan for buying a home, do you wish finding a dating partner also required a pre-approval letter?”

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Homebodies, financial flashback & marital money

01-18-2019

HOARDING HOMES

The housing inventory crunch is largely due to a spike in the amount of time Americans are staying in their homes. Based on a joint analysis of indicators with Moody’s Analytics, First American Chief Economist Mark Fleming said, “…today, we are in a near unprecedented homebody era, as increasing mortgage rates, low supply, low rates of foreclosure and tight credit have increased homeowner tenure to the highest level in 18 years.” The long-term historical tenure for U.S. homeowners is six years.

BORROWING BOOST

A rate decline led to an application incline according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending January 10. The PMMS credits lower energy prices and continued income growth for a 20% increase in mortgage applications last week as rates for a 30-year fixed rate mortgage dipped to the lowest levels since March of last year.

REFINANCE REASONING

The number of Americans who tapped home equity reached a 10-year high in November as the number of borrowers who refinanced to get better interest rates or terms dropped to the lowest level since 2005. Cash-out refinances comprised the largest share of loan origination activity since 2008 according to Black Knight Financial Services’ November Mortgage Monitor report.

MATRIMONIAL MONEY

While wages of men and women with at least a HS diploma are similar early in life, they diverge dramatically with age. The gap peaks at about age 50 with men earning about $76,000/year and women earning about $49,000/year. However, at all ages there is no gap between single women, single men and married women. Married men, however, earn much more and are the cause of the entire gap.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Attitude, equity, income & world wealth

01-11-2019

SELLING SEASON

The December 2018 Fannie Mae Home Purchase Sentiment Index® (HPSI) shows an array of opinions. Fannie Mae Senior Vice President and Chief Economist Doug Duncan said, “Consumer attitudes regarding whether it’s a good time to buy a home worsened significantly in the last month, as well as from a year ago, to a survey low.” The December survey also revealed that the net share of Americans who said it is a good time to sell a home increased, along with those who say they are not concerned about losing their jobs.

RECESSIVE RATES

Rates for a 30-year fixed rate mortgage dropped back again for the week ending January 3, according to Freddie Mac’s Primary Mortgage Market Survey. Rates have trended mostly downward since the middle of November, but they’re still over a half a percent higher year-over-year.

RISKY RELEASE?

A concept called “equity release” is gaining momentum in the financial world, promising homeowners the ability to tap equity without incurring debt. There’s a growing number of companies offering cash in exchange for the ability to share in a home’s appreciation over time, as well as some who offer sale and leaseback options. Dubbed “innovative” by market watchers, these new finance vehicles seek to capitalize on future property value increases by providing homeowners with cash in hand today.

WILD WEALTH

In 2017, the wealthiest 1% of the global population (77 million people) was estimated to hold 50% of world wealth. Due to better data and estimates, it’s now estimated that they only hold 47% of global wealth. To be in this group, your net worth must exceed $870,000. Thirty-one million of these lucky folks live in the US, followed by 7 million in China.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Sluggish sales, retro rates & moving mischief

01-04-2019

SEASONAL SLOWDOWN?

The ramp up to the holiday season marked a slowdown in home sales according to the latest Pending Home Sales Index (PHSI) from the National Association of Realtors (NAR). NAR Chief Economist Lawrence Yun says November’s 7.7% year-over-year decline “…does not yet capture the impact of recent favorable conditions of mortgage rates.”

RATE ROLLBACK

Mortgage interest rates flashed back to early summer in the last week of 2018 according to Freddie Mac’s Primary Mortgage Market Survey for the week ending December 27. Rates for the 30-year fixed rate mortgage continued their downward trend, dipping close to the point where home sales slowed in the traditionally busy buying season.

EXTENDED EXPANSION

U.S. economic growth needs to continue for seven more months in order to set the record for the longest expansion in U.S. history according to CoreLogic Chief Economist Frank Nothaft, who bases his estimation on over 160 years of business cycle data. Nothaft also predicts 2.4% overall economic growth for 2019 and the potential for 3.4% unemployment, which would mark its lowest rate in 50 years.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Ascending equity, rate retreat & the cost of kids

12-21-2018

EQUITY ESCALATES

Homeowner equity reached $15.2 trillion in the second quarter this year according to the U.S. Federal Reserve. The new high is approximately 13% higher than the previous peak of $13.4 trillion in 2006. The Mortgage Bankers Association credits home price growth, a healthy job market, contextually low interest rates and efforts by homeowners to reduce their mortgage principal balances.

SENIOR STRIDES

Continued home price appreciation fueled a 1.4% increase in housing wealth for homeowners age 62 and older according to the Risk/Span Reverse Mortgage Market Index (RMMI). Seniors gained $97 billion dollars in home equity for Q3 according to the RMMI, for a new index high of 251.57. The National Reverse Mortgage Lenders Association has been publishing the index since 2000.

REMEMBER SEPTEMBER

Rates for a 30-year fixed rate mortgage retreated to the lowest point since September according to Freddie Mac’s Primary Mortgage Market Survey for the week ending December 13. Rates have been trending downward or flat for the last five weeks.

COSTLY KIDS?

Children have a huge impact on home-buying preference and purchase power according to the National Association of Realtors’® (NAR) 2018 Moving with Kids report. Buyers with child care expenses said they compromised on size, price, style and condition of homes, while 27% said care costs delayed their home purchases.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Agent attitudes, rate reasoning & daunting debt

12-14-2018

SLIGHTLY SLOWER

Homes are staying on the market a tad longer according to the National Association of Realtors (NAR). NAR’s Realtor Confidence Index Survey shows that listings were on the market for an average of 33 days in October, up from 29 days the previous month. Responding Realtors® cited “interest rate” and “low inventory” as the major issues affecting transactions in October.

HIKE HIATUS

Though mortgage interest rates have trended upward most of this year, recent stock market volatility has presented prospective home buyers with an early holiday gift. Rates for a 30-year fixed rate mortgage receded .06% for the week ending December 6 according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). The PMMS has tracked U.S. mortgage interest rates since 1971.

RATE REMINDER

The Federal Reserve is fulfilling expectations and will likely raise rates again when the Board of Governors meets next week, but that doesn’t mean mortgage interest rates will follow suit. Freddie Mac Chief Economist Sam Khater reminds the public that the Fed funds rate and other oft-mentioned indicators such as the stock market aren’t the true drivers of mortgage rate activity, saying, “When stock prices drop, it causes a flight to safety and Treasury bonds. In the short term, this is good for consumers.” The next meeting of the Federal Reserve Board was rescheduled from December 5 due to the declaration of a national day of mourning for former president George H.W. Bush.

AVERAGE OWED

NerdWallet released its 2018 American Household Credit Card Debt Study and it shows big numbers. U.S. consumers with mortgages owe an average of $184,417 nationwide. Average student loan debt is $47,671, while Americans with credit card debt carry an average balance of $6,929.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

A tempered trend, possible peak & affordable add-ons

12-7-2018

UP AGAIN

Home appreciation is up again, gaining 5.4% year-over-year in October according to the latest CoreLogic Home Price Insights (HPI). Prices were also up .5% month-over-month, but CoreLogic forecasts the November numbers will show negative gains. Despite higher mortgage rates and declining affordability, CoreLogic Chief Economist Frank Nothaft says, “Many renters view a home purchase as a way to build wealth through home-equity growth.”

STAYING STEADY

Freddie Mac reported a zero-percent change in rates for the 30-year fixed rate mortgage in its Primary Mortgage Market Survey for the week ending November 29. Recent trends show rates stabilizing as a result of trade concerns and weakening indicators in the auto and new home segments of the economy. The number of mortgage applications rose for the second consecutive week as a result, according to the Mortgage Bankers Association.

COSTLY CREDIT

Late credit card payments will cost more in 2019. Rates for first-time and subsequent tardy payments will rise $1 each next year to $39 and $28, respectively. The Credit Card Accountability Responsibility and Disclosure Act of 2009 – also known as the Credit CARD Act – permits watchdog agency Consumer Financial Protection Bureau to adjust ceilings for late fees on an annual basis.

SENIOR HOUSING?

In an attempt to address its worsening housing affordability crisis, Denver is “thinking outside the zoning box.” Government-sponsored entity Fannie Mae will fund a pilot program in the city that will permit property owners to install and rent out Auxiliary Dwelling Units (ADUs) to create more housing options, revenue streams for low-income homeowners and combat skyrocketing rents. ADUs are also known as “mother-in-law suites” or “granny flats.”

 

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Peak perspective, rate retreat & leapin’ limits

11-30-2018

ABOVE & BELOW

The latest Real House Price Index (RHPI) from First American Financial Corporation shows some interesting ups and downs. Though home prices are up 15.3% year-over-year from August 2018, First American says U.S. home prices average 37% below the 2006 pre-recession peak. First American Chief Economist Mark Fleming puts the numbers in perspective, saying, “Without stronger household income growth, rising mortgage rates will continue to impede consumer house-buying power, reducing affordability.” The RHPI uses incomes and mortgage rates to inflate or deflate unadjusted house prices to capture the true cost of housing.

RATE ROLLBACK

Mortgage interest rates trended downward in the week ending November 22 according to Freddie Mac. The Primary Mortgage Market Survey (PMMS) reported the largest weekly drop since January 2015. Freddie Mac has tracked mortgage rate data since 1971.

NEW NORMS

The Federal Housing Finance Agency (FHFA) announced the third increase in conforming loan limits in three years this week in compliance with the Housing and Economic Recovery Act (HERA). HERA requires annual adjustment of baseline conforming loan limits for Fannie Mae and Freddie Mac to reflect changes in home prices. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018.

BUMMED BUILDERS

This year finds builder confidence is at its lowest level since 8/16, while housing starts and building permits were highest in January and March, respectively. The most recent peaks for existing and pending home sales occurred in 11/17 and 4/16. Prices are rising noticeably slower, inventories are increasing, and affordability is near a decade low, according to economist Elliot Eisenberg, PhD. However, with solid household formation, incomes up and job growth holding strong, Eisenberg predicts, “Housing won’t cause the next recession. It’ll be something else.”

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Winter Warmup: 5 ways to soothe seasonal stressors

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FIVE WAYS TO SOOTHE SEASONAL STRESSORS
For many of us, winter means plummeting temps and navigating ice and sleet on the daily commute. But even if frozen roads and falling snow aren’t part of your picture, this time of year still has its own set of unique (and often stressful) challenges.

Try these tips to let go of the strains of the season and help yourself chill out this winter.

 image1 Ease your energy expenses

Dropping degrees don’t have to signal a rise in your heating bill.Changing air filters regularly (every 60-90 days) is an easy way to cut energy costs. Install a timer on your water heater to switch it off at night and back on just before you wake up in the morning. Turn your thermostat down a few degrees and put on a favorite sweatshirt or sweater to stay cozy.

Eliminate pest unrest

Humans aren’t the only ones who want to come inside to stay warmand have a bite to eat when it’s cold outside. Prevent mice from becoming holiday houseguests by keeping entry and garage doors closed, and putting all pantry and pet food in sealed containers. Keep crickets out of the house by sealing any gaps around doors or windows, and make sure the foundation and perimeter of your home is free of the grass, weeds and mulch they love to hide in.

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 image3 Savor the sun

The lack of sunlight that comes with shorter days can make it tough to invoke a cheerful mood. Make the most of the daylight hours that you do have by going for a walk on your lunch break.Skip the gym and try an outdoor workout. When the sun goes down, light candles throughout your house to create a calm, uplifting atmosphere.

Honor your health

Spending more time indoors with other people, coupled with colder, dryer air can help illness-causing viruses to spread more rapidly. Give your immune system a boost by drinking plenty of clean water(add a squeeze of lemon or other citrus for extra vitamin C) and getting 7-8 hours of sleep a night. Consider taking a gut-friendly probiotic, or adding more fermented foods such as raw sauerkraut and yogurt to your diet.

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 image5 Protect your pets

If it’s too cold for you to be outside for long periods, it’s too cold for your pet, as well. Limit their exposure to the elements, and dress shorthaired dogs in coats or sweaters that cover them all the way to the belly. Invest in some comfy cat and dog beds to give your furry family members some extra wintertime warmth.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.