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  • Fed raises policy rates but mortgage rates stay low in this week’s Markets in a Minute!

     

     

    For the Week Ending December 15, 2017

    The FOMC Meeting:

    As expected, the Federal Open Market Committee voted to raise the Fed Funds Rate by 25 basis points, bringing the rate to a range of 1.25 to 1.50 percent. The board members voted 7-2 in favor of the interest rate
    increase. The two members who voted against the rate increase, do not seem to agree with the other members views on the likelihood of wage-push inflation due to the high levels of employment. The Fed has indicated that their current plan for 2018 is three
    more 25 basis point rate increases.

     

    The Stock Market:

    The stock market met the Fed announcement with little more than a yawn. There was nothing in the Fed message that was a surprise. For the last few months, the majority of investors and analysts have been expecting
    the rate increase, so the stock market was business as usual.

     

    Mortgage Rates and Loan Activity:

    Until this week, mortgage rates have been inching higher. The Mortgage Bankers Association reported for the week ending December 8th, applications for purchases declined 1.0 percent, and refinances dropped 3.0 percent.

    In what was a little bit of a surprise, bonds rallied after the Fed announcement on Wednesday of this week. The 10 Year Bond yield, which is a representation of mortgage rate movement, but not the basis for them,
    declined after the Fed announcement.

    The stock market declined on Thursday as did bond yields as investors placed more money into the bond market after digesting the Fed’s announcement. There is some investor sentiment that now exists in that the Fed’s
    plans for interest rate increases over the next year may slow economic growth.

     

    Housing:

    There is growing concern in regard to the future of the housing market. With all of the talk on the proposed tax reform and the lowering of the real estate tax deduction limit, concerns exist on how this could impact,
    and potentially hurt the housing market. We just have to wait and see what will be passed.

     

    Next week’s potential market moving reports are:

    • Monday December 18th – Housing Market Index
    • Tuesday December 19th – Housing Starts
    • Wednesday December 20th – MBA Mortgage Applications, Existing Home Sales
    • Thursday December 21st – First Time Jobless Claims. FHFA House Price Index
    • Friday December 22nd – New Home Sales, Durable Goods Orders

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    Tax reform is moving forward. Lawmakers are currently reconciling the Senate and House versions. The GOP is trying to get it done before 2018.
    The Fed raised policy rates at this week’s meeting, as expected. The rate increase actually helps to keep mortgage rates low for the near term.
    The Fed is expected to raise rates 3 times in 2018, based on current forecasts. The policy rate increases could pressure mortgage rates higher for next year.

     

    Homebuilders that focus on entry-level housing are expected to flourish in 2018. A growing economy, solid job market, and low mortgage rates are driving demand.
    In its 2018 forecast, Realtor.com predicts home prices will go up 3.2% and sales will increase 2.5%. Inventory is also expected to rise.
    Mortgage rates remain low, and mortgage applications remain high. New purchase apps were 10% higher than a year ago this time.

    Sister: “What are you giving Mom and Dad for Christmas?”

    Brother: “A list of everything I want!”

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
    rate trends can differ from our own and are subject to change at any time.

     

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    28368 Constellation Road
    Suite 398
    Santa Clarita, CA
    91355

    www.fredkreger.com

     

    ©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
    do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
    may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

     

     

    Read more
  • Housing is on fire in this week’s Markets in a Minute!

     

    For the Week Ending December 1, 2017

    Stock Markets:

    Investor are loving the ever-increasing likelihood that the House and Senate are going to present a new tax plan for the President’s signature before the end of the year. The two biggest drivers of excitement in
    the markets are the plan to reduce the corporate tax rate from 35 percent down to 20%, and to allow companies to repatriate their offshore cash holdings at the lower tax rate. Simply put, this will be a tremendous financial windfall for corporations, and to
    investors alike.

     

    Many large national corporations have made promises to the White House that if this plan passes with the lower tax rate, they will invest a significant amount of money into corporate expansion. This in-turn will
    be great for the labor market and increasing wages, as employment demand will soar.

     

    As expected, the tax plan is divided down party lines. Most Republicans are for it, while there is not a single Democrat who will vote “yes” for the plan. Currently the House, Senate, and White House are all Republican
    controlled, which means that there is little that can be done to prevent the passage of tax reform if every elected Republican votes for it to be implemented.

     

    Mortgage Loan Limit Changes:

    This week Fannie Mae, Freddie Mac, and HUD, all announced they are raising their loan limits based on the data showing average home prices increasing around the country. Depending on where a property is located determines
    how much, if any, the loan limits have been increased.

     

    Home Prices:

    On Tuesday both the Federal Housing Finance Agency and Case-Shiller released their latest data on home prices. The FHFA Index showed that home prices continued to rise in September at the rate of 0.3 percent. Home
    prices compared to the same time last year are higher by 6.3 percent.

     

    The Corelogic Case-Shiller Home Price Index showed similar findings. This index showed home prices up 0.5 percent, and an increase of 6.2 percent from the prior year.

    Both reports show considerable strength in housing. Mortgage application activity for home purchases has remained stable. Refinance applications have declined 8.0 percent with the rise in mortgage rates.

     

    Next week’s potential market moving reports are:

    • Monday November 27th – New Home Sales
    • Tuesday November 28th – FHFA House Price Index, Corelogic Case-Shiller HPI
    • Wednesday November 29th – MBA Mortgage Applications, Pending Home Sales
    • Thursday November 30th – First Time Jobless Claims
    • Friday December 1st – ISM Manufacturing Survey, Construction Spending

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way
    I possibly can.Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    Third quarter GDP numbers showed the economy grew by 3.3%, in line with expectations. This was the quickest pace of growth in 3 years.
    The likelihood of tax reform being signed into law by the end of the year is increasing. The tax reform is expected to spur economic growth for 2018.
    The Fed is expected to raise policy rates this month, but that shouldn’t have much effect on mortgage rates. Markets have already anticipated the rate hike.

     

    New home sales in October unexpectedly rose to the highest level in a decade. Single-family home sales rose 6.2% over September, the highest since October
    2007.
    Home prices rose in September 6.2% over last year and are expected to continue to increase. Prices are rising at the fastest annual rate since June 2014.
    Pending home sales jumped 3.5% in October. Led by the hurricane stricken South, the growth was more than double what was expected.

    What happens to a frog’s car when it breaks down?

    It gets toad away.

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
    rate trends can differ from our own and are subject to change at any time.

    Sincerely,

    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    28368 Constellation Road
    Suite 398
    Santa Clarita, CA
    91355

    www.fredkreger.com

    ©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
    do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
    may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

     

    Read more
  • Strong housing and a growing economy in this week’s Markets in a Minute!

     

     

    For the Week Ending November 17, 2017

    Stock Markets:

    In what has seemed like forever that elected officials have talked about revamping the outdated and often considered absurd tax code, change may finally be coming. On Thursday House Republicans passed their version
    of the tax code revisions. By no means does this represent that the tax code will change, however it is a big first step, and a milestone in the road to change. There are many more steps to the tax code being changed, that had eluded Congress for decades.
    The Dow Jones Industrial Average soared almost 200 points on this news. The other major indices were up significantly as well.

     

    Housing Market Index:

    Home builders are reporting that they are seeing an increase in activity. In fact, builders are saying that this is the best market since March. Current and future sales are coming in at a very strong level of 77.
    Traffic to home building sites is also up by 2 points for the best reading since May. It is uncommon for this time of year to see significant increases in activity, so this is welcome news for the housing market.

     

    Mortgage Rates and Applications:

    Purchase applications rose 0.4 percent for the week ending November 10th. Refinance applications, despite mortgage rates remaining relatively flat, rose 6.0 percent for the week. What is exciting in the latest report
    is that purchase applications are 17.0 percent higher than the same time last year. The strong year-on-year gain of purchase applications points to future strength in underlying home sales.

     

    Inflation:

    On the wholesale level, pressure for price increases showed signs of life for the month of October. The Producer Price Index rose by a larger than expected 0.4 percent. Even when you remove volatile food and energy
    prices, wholesale inflation remained at 0.4 percent.

    On the retail end, unfortunately the story was not the same. Consumer prices for October were up slightly by 0.1 percent. The year-on-year rate was actually down by 2 tenths of a percent. The core rate of inflation
    was up only 0.2 percent when food and energy prices were removed from the calculation.

     

    Next week’s potential market moving reports are:

    • Monday November 20th – Leading Indicators
    • Tuesday November 21st – Existing Home Sales
    • Wednesday November 22nd – MBA Mortgage Applications, Jobless Claims
    • Thursday November 23rd – Markets Closed
    • Friday November 24th – NYSE Closes at 1:00PM

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    The Producer Price Index, which measures wholesale inflation, rose 0.4% in October. Core PPI was also up, supporting a Fed rate increase next month.
    Retail sales were also improved in October, coming in stronger than expected. The increase of 0.2% signals a growing economy and could pressure rates.
    Tax reform continues to make progress in both chambers of Congress. Once passed, the reform is expected to spur further economic growth.

     

    Home builder confidence hit an 8-month high in November, despite increased costs and labor shortages. Buyer demand remains high on reduced inventory.
    National mortgage delinquency rates continue to fall, down 0.6% year-over-year in August. Foreclosure inventory was also down 0.3% year-over-year.
    The House passed legislation to extend the National Flood Insurance Program for 5 years. However, the Senate still must approve the bill for it to take effect.

    I had a job tying sausages together, but I couldn’t make ends meet. 

     

    Please note: We will not publish The Markets in a Minute next week. Wishing you a wonderful Thanksgiving Day!

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
    rate trends can differ from our own and are subject to change at any time.

    Sincerely,

    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    28368 Constellation Road
    Suite 398
    Santa Clarita, CA
    91355

    www.fredkreger.com

     

    ©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
    do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
    may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

     

     

    Read more
  • Tax reform the big topic in this week’s Markets in a Minute!

     

    For the Week Ending November 10, 2017

    Tax Reform:

    All the talk as of late is the forthcoming tax plan to be released by the White House in the coming days. It seems that the like and dislike, for the most part, is split directly down party lines, However, there appears to be some Republicans in office that are struggling to support the proposed changes the way they are. The bottom line is almost every President, in as long as I can remember, has said they would reform the tax code. However, we have yet to see it,or even have any President come close to getting it passed. My feeling is that once again we will not see changes that are so badly needed, because there is no agreement on what they should be.

     

    Mortgage Rates and Applications:

    We have the trifecta of “1”’s this week. Purchase applications rose by a seasonally adjusted 1.0 percent for the week ending November 3rd. This is a slight reversal from the prior week’s minor decline of 1.0 percent. Refinancing declined only 1.0 percent as there was little movement in interest rates. Purchase applications are ahead of the same time last year by 9.0 percent. Overall purchase and refinance application activity is split almost even. Purchase loan applications represent 51.0  percent versus refinancing being at 49.0 percent.

     

    The Stock Market:

    With very little economic data being released this week, along with Friday’s Veteran’s Day Holiday, investors appear to be sitting on the sidelines. All of the major exchanges have been trading in a relatively narrow range. The stock market continues to hover near record highs, and for this week, there is little for investors to latch onto to make significant changes in strategy.

     

    Job Opening and Labor Turnover Report (JOLTS)

    With all of the job openings that supposedly exist, how is it that so many people in the workforce continue to struggle to locate better jobs, or receive significant pay increase where they work currently?

     

    The latest data for the month of September shows that job openings increased slightly to a very abundant 6.093 million. This is up over August’s revised 6.090 million. All of the other measurements related to this report show little to no change in the relationship between new hires, layoffs, quits, and discharges.

     

    Next week’s potential market moving reports are:

    • Tuesday November 14th – Producer Price Index
    • Wednesday November 15th – MBA Mortgage Applications, Consumer Price Index, Retail Sales
    • Thursday November 16th – First Time Jobless Claims, Industrial Production
    • Friday November 17th – Housing Starts

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way
    I possibly can.

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    Traders continue to drive stocks to new heights and new records. However, concerns over the new tax reform plan going through have started to surface.
    The tax reform plan is expected to drive economic growth and corporate profits. If the plan doesn’t go through as anticipated, it could help interest rates.
    The labor market remains strong. Job openings posted by employers in September were steady from the prior month, a near record high.

     

    Rents have been increasing far faster than the pace of inflation. However, rising homeownership numbers could curb demand, slowing the increases.
    New applications for purchase mortgages increased 1% last week. That’s 9% higher year-over-year, as buyers seem less concerned about rates.
    The tax reform plan, as proposed, would lower the mortgage deduction on new purchases. There are lots of opinions of what effect, if any, it would have on
    sales.

    I was called into my manager’s office today because of my dress code. 

    He said, “You can’t wear pajamas for work.” 

    I said, “Everyone else does.” 

    He said, “That’s because they’re patients.”

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
    rate trends can differ from our own and are subject to change at any time.

     

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    28368 Constellation Road
    Suite 398
    Santa Clarita, CA
    91355

    www.fredkreger.com

     

    ©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
    do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
    may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

     

    Read more
  • Lots of Fed action in this week’s Markets in a Minute!

     

    For the Week Ending November 3, 2017
     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    The Fed announced at this week’s meeting that there would be no policy rate hike this month. They did however signal a December hike is very likely.
    Markets have been rallying on the probable nomination of Jerome Powell as the next Fed Chair. Powell is expected to continue the trend of current Fed policies.
    The tax reform proposals issued by the House GOP have sparked a stock rally. A proposed cut to corporate taxes is expected to fuel the economy.

     

    Home prices hit a new all-time high in August, according to Case-Shiller. National home prices rose 6.1% annually, better than the 5.8% economists expected.
    Construction spending increased 2.0% year-over-year in September. Month-over-month spending fell for non-residential construction and was unchanged for residential
    construction.
    Despite tight inventory and rising home prices, the homeownership rate rose in the 3rd quarter. The 63.9% rate is the highest level since 2014.

    My sister bet me $100 that I couldn’t build a car out of spaghetti. You should’ve seen the look on her face as I drove pasta.

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
    rate trends can differ from our own and are subject to change at any time.

    Sincerely,

    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    28368 Constellation Road
    Suite 398
    Santa Clarita, CA
    91355

    www.fredkreger.com

    ©2017 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown
    do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
    may not be available in all states and restrictions apply. Licensed by the Department of Business Oversight under the CRMLA.

     

    Read more
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