EQUITY – 10/25/19

The average loan-to-value ratio in the US housing market as of 6/30/08 was 55%, i.e., the average homeowner had home equity of 45%.  The average loan-to-value ratio in the US housing market as of 6/30/19 was 36%, i.e., the average homeowner had home equity of 64%(source: Federal Reserve).

 

*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.

/0 Comments/by

WRONG – 10/17/19

As of 12/17/18, 10 Wall Street strategists predicted where the yield on the 10-year T-note would be as of 12/31/19.  All 10 forecasted an increase in the 10-year note yield from its actual 12/31/18 yield close of 2.68%.  However, the yield on the 10-year note has fallen to 1.50% as of Friday’s close 8/30/19 (source: Barron’s).

*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.

/0 Comments/by

ALMOST A MILLION BUCKS – 10/16/19

If the nation’s aggregate net worth of $113.5 trillion was spread equally across all 122.5 million US households, every American household would be worth $927,000 (source: Federal Reserve).

*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.

/0 Comments/by

 DISAGREEMENT – 10/12/19

The Federal Reserve Board consists of the 7 members of the Fed’s Board of Governors (which has 2 vacancies currently) and the presidents of the 12 regional Federal Reserve banks, i.e., there are 17 current members of the Federal Reserve Board.  At the 9/18/19 Fed meeting where an interest rate cut was approved, 7 of the 17 supported an immediate rate cut and saw the need for an additional rate cut later in 2019, another 5 of the 17 supported an immediate rate cut but anticipated no further action during 2019, and the final 5 of the 17 did not support the most recent rate cut or any other reductions in 2019(source: Federal Reserve).

*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.

/0 Comments/by

TWELVE-YEAR HIGH – 10/9/19

New residential construction in the US totaled 121,100 housing units in August 2019, its highest total recorded since August 2007.  The total includes 82,600 single family homes, 1,800 apartment buildings with 2-4 units and 36,700 apartment buildings with 5 or more units (source: Census Bureau).

*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.

/0 Comments/by

BORROWERS WERE GOUGED – 10/8/19

When banks and investors need to borrow cash on a short-term basis (e.g., overnight), other banks make their “excess” reserves available in multi-billion-dollar electronic transactions that take place late in the trading day.  In today’s interest rate world, the borrower would pay approximately 0.005% per day ($50,000 per day per $1 billion borrowed).  When the regular flow of “overnight” money (about $75 billion a day)disappeared on 9/16/19, lenders exploited the shortfall and the daily rate that was charged increased “fivefold,” i.e., a cost of $250,000 per day per $1 billion borrowed (source: Federal Reserve).

*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.

 

/0 Comments/by

SLOWING ECONOMY – 10/7/19

The People’s Bank of China, aka the Fed of China, has reduced the reserve requirements for banks 7 separate times since 1/01/18, most recently on 9/06/19.  By reducing the amount of reserves that banks are required to hold, the Chinese banks are able to make new loans (source: PBOC)
*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.

/0 Comments/by

MOST OF THEM – 10/4/19

The sales of existing homes account for 90% of all homes sales in the United States (source: Treasury Department).

*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.

/0 Comments/by

HOW DID YOU DO? – 10/3/19

An average single-family home in America increased in value by +5.0% over the 1-year period from 6/30/18 to 6/30/19, by +5.9% per year over the last 5 years from 6/30/14 to 6/30/19, and by +3.6% per year over the last 10 years from 6/30/09 to 6/30/19 (source: Federal Housing Finance Agency).

*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.

/0 Comments/by

FANNIE AND FREDDIE – 10/2/19

 Treasury Secretary Hank Paulson announced on 9/07/08 (i.e., 11 years ago) the government’s plan to take control of mortgage giants Fannie Mae and Freddie Mac.  Fannie and Freddie received $191 billion of taxpayer aid but have paid back $297 billion (source: Treasury Department).

*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.

/0 Comments/by