|For the Week Ending September 29, 2017|
The Stock Market and the Fed:
The stock market has been trading in a relatively narrow range for the week with the Dow remaining within 70 points from the beginning of the week through Thursday. Since last week’s Fed announcement regarding a likely rate increase in December, along with their plan to begin unwinding the Fed balance sheet, investors have been looking for other significant news to trade on. Overall, there has been little geopolitical news or domestic economic surprises that have given investors cause to make significant changes to their investment positions.
Mortgage Rates and Applications:
Good news in the housing market in that the Mortgage Bankers Association of America reported that applications for purchase loans increased 3.0 percent for the week ending September 22nd. This bump upward follows the prior week’s unusually steep loss of 11.0 percent. Refinance applications declined once again for the same period by 4.0 percent.
Overall the housing market is showing signs of some softness. The talk over the Summer that the year could end up finishing strong to make up for the slow Spring market seems to have been quelled. Limited housing inventory continues to remain the culprit of holding down home purchase activity. There are plenty of buyers in the market, however their ability to locate suitable properties continues to frustrate both purchasers and real estate professionals. Seller’s remain the big winners as property prices continue to rise.
Case-Shiller Home Price Index & Pending Home Sales Index
Although we are in September, this benchmark housing report shows that home prices increased 0.3 percent for the month of July. Unfortunately, home price data typically runs approximately 2 months behind the current calendar date due to the time it takes to gather all of the data. Compared to the same time last year, prices are up 5.8 percent. The spread between the last report and the current one, related to year-on-year growth, increased by 2/10th of one percent.
Existing home sales have been on the decline recently, and the latest data on pending home sales confirms this trend is likely to continue. The August report of homes currently in contract to sell is down a significant 2.6 percent. However, a major factor in the reduction of homes in contract is likely related to the two recent hurricanes in Texas and Florida, which represent large real estate markets.
Next week’s potential market moving reports are:
• Monday October 1st – ISM Manufacturing Index, 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.
|President Trump released his plan for tax reform this week, which is expected to stimulate economic growth. A hotter economy could contribute to higher rates.|
|Consumer confidence fell slightly in September, despite a strong labor market. The decline is likely temporary and due mainly to Hurricanes Harvey and Irma.|
|The economy grew a bit faster than previously estimated in the 2nd quarter, with a GDP of 3.1%. Consumer spending was also strong for the 2nd quarter.|
|Home prices are still on the rise, with Case-Shiller reporting increases of 5.9% in July. Strong demand and tight inventory continue to drive up prices.|
|New home sales were at an 8-month low in August. Part of the blame can be placed on weather, which held back completion of homes under construction.|
|Pending home sales were down slightly in August, 2.6% less than July, largely due to low inventory. Demand continues to overwhelm supply in most markets.|
Have you heard the rumor going around about butter? Never mind, I shouldn’t spread it.
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
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