|For the Week Ending September 22, 2017|
The Stock Market and the Fed:
Other than a brief, and I mean for less than 30 minutes, did the stock market become concerned about the latest Fed meeting statement. You can look at stock market charts minute by minute and you will see within seconds of the Fed announcement that the Fed will likely increase rates before years end, the Dow plunged 50 points. However, within 30 minutes of the announcement the market was rising once again. In total 45 minutes from the announcement, the Dow was back to pre-announcement levels. The Dow finished the trading day up 39 points.
Mortgage Rates and Applications:
Despite the fact that mortgage rates virtually flat last week, applications for purchases and refinances both declined. Apps dropped 11.0 percent and 9.0 percent respectively, and caught may analysts by surprise. Overall applications versus the same time last year are only up 2.0 percent. This is the closest gap we have seen between present and last year’s statistics.
Limited housing inventory continues to contribute to the limited growth in housing. As of late, the inventory, which had been increasing slightly, has once again returned to contraction. There continues to be speculation that with the rise in home prices all year, the fall could drive sellers to enter the market.
This sector of the market is doing well. The latest stats for August show an increase of 7.9 percent from the prior month. To be transparent, some of the increase is due to rebuilding taking place in Texas related to the storm damage of Hurricane Harvey. It is likely that we will see additional increases in the coming months from the continuation of building in Texas, plus the addition of construction in Florida in the aftermath of Hurricane Irma. However, it is important to note that overall housing starts are higher even when you subtract out the Hurricane factor.
FHFA House Price Index
Home price increases have been cooling as of late, and the latest report for July continues to show this trend. Home prices only rose 0.2 percent from June to July. Overall prices remain 6.3 percent above last year.Th e Mountain and Pacific States remain on top with annual prices increases of 8.2 percent.
Next week’s potential market moving reports are:
• Monday September 25th – Dallas Fed Manufacturing Survey
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 Fed announced they will not raise policy rates this month. However, they did signal a rate hike in December is likely, as well as 3 more hikes in 2018.|
|In October, the Fed will also begin reducing their balance sheet by buying fewer bonds. This could adversely affect mortgage rates over time.|
|The Fed sees near-term risks to the economy as “roughly balanced.” Low unemployment and economic expansion are good, but lack of inflation is a concern.|
|Home builders are slightly less optimistic about the housing market this month. The recent hurricanes are causing worries over labor and materials.|
|Housing starts were down slightly for the second straight month in August. However, single-family home construction was up 1.6% from July.|
|Existing home sales declined to a 1-year low in August, as inventory continues to be a problem. Areas lacking activity due to recent hurricanes are also to
To this day, the guy that used to bully me at school still takes my lunch money. On the plus side, he makes a great sub sandwich.
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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