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

Housing is on fire in this week’s Markets in a Minute!
December 1, 2017 Fred Kreger

 

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.

 

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