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  • Home prices soaring and jobs report Friday in this week’s Markets in a Minute!

     

     

    For the Week Ending February 2, 2018
     

    The Markets and the Economy:

    This morning, the main headline is the Employment Situation Summary where a reading of +190,000 compared to last month’s +148,000, came in at +200k. Hourly Earnings were +.9%, +2.9% year over year, and the Unemployment Rate came in at 4.1%.

     

    As expected, on Wednesday the Federal Open Market Committee announced that they are leaving interest rates where they are for now. In what is a rare occurrence, all 9 members voted to leave rates where they are.
    It has been a very long time since all the board members could be in agreement on monetary policy. The stock market had muted reaction to the Fed announcement.

    The big question on investors minds these days is… “Is the bull run for stocks coming to an end?”

     

    After week after week of new stock market records, the first half of the week saw the market tank by over 500 points in two days. The two main drivers for this change of fortune was some concern about future economic
    growth, and the bigger factor of JP Morgan Chase, Amazon, and Berkshire Hathaway getting into the healthcare business to reduce medical costs. This had almost every stock related to healthcare in some fashion take a nose dive.

     

    Pending Home Sales and Overall Housing:

    The tight supply of homes available for sale continues to restrict significant growth of pending home sales. December showed an expected increase of 0.5 percent, which although not a significant movement, does point to sales improvement in the coming months.

     

    The South is the strongest region for property resales. Pending sales in this area increased 2.6 percent in December, and is higher from the same time last year by 4.0 percent. Sales in the West increased 1.5 percent, however unlike the South, sales compared to last year are down by 3.1 percent.

     

    Until more sellers place their homes on the market, significant growth in this sector is unlikely. There continues to be very high demand for housing, however, with the recent increase in mortgage rates, home affordability has declined slightly. If interest rates continue to rise, it is likely we will see a decline in the number of buyers out searching for home for a brief period of time. Once people accept the new reality of slightly higher mortgage rates (which are still very low by historical standards) the buyers that took a pause on purchasing, will likely return.

     

    The most recent Core-Logic housing data shows that prices continue to rise. The latest data is for November 2017. Home prices rose 0.7 percent from the prior month, and were higher by 6.4 percent from the same time last year. The next step is to see how higher rates might impact values.

     

    Next week’s potential market moving reports are:

    • Monday February 5th – ISM Non-Manufacturing Index
    • Tuesday February 6th – JOLTS Report
    • Wednesday February 7th – MBA Applications, EIA Petroleum Status Report
    • Thursday February 8th – First Time Jobless Claims

     

    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 didn’t raise policy rates at this week’s FOMC meeting, though their announcement pointed to a likely increase when they meet in March.
    Consumer spending increased in December, a reflection of the strong labor market. However, the 2.4% national savings rate was the lowest since 2005.
    The Fed believes that inflation could reach their 2% target this year. Supported by a growing economy, inflation pushes rates (including mortgage rates) higher.

     

    National home prices continued their run higher in November, rising 6.2% annually. Home prices are rising more than three times faster than the rate of inflation.
    Despite tight inventory, pending home sales were up 0.5% in December over November. The supply of homes for sale is at its lowest level since 1999.
    Construction spending increased more than expected in December. Private residential projects rose to their highest level since March 2007.

    What did the left eye say to the right eye?
    Between you and me, something smells.

     

    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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  • Mortgage applications were up in this week’s Markets in a Minute!

     

     

     

    For the Week Ending January 26, 2018

    The Government and the Economy:

    Thankfully the government shutdown did not last past Monday. The irony is that the American public has become immune to almost anything that happens in Washington, or the world for that matter. The government shuts down, and the average person on the street just goes about their business with little thought about it. North Korea fires a missile, and the response is “oh another one” (greeted with a yawn). Bitcoin loses 50% of its value in a week, “whatever”. The more I think about it, the scarier it is what we don’t pay attention to anymore. The good thing, is you are paying attention to this newsletter.

     

    The Federal Housing Finance Agency House Price Index (FHFA):

    Home prices continue to rise, and November’s 0.4 percent increase was well received. Prices from the same time last year are higher by 6.5 percent. These solid gains come on the heels of the revised increase of 0.6 percent for October. With the housing market gaining 7.0 percent in 2017, and the belief that growth will continue well into 2018, more and more buyers are jumping into the market. Even Millennials, who have represented a small percentage of home buyers, are increasing their interest in homeownership. This is placing even more strain on housing inventory and is likely to push the rate of appreciation even higher in the coming months.

     

    Existing Home Sales:

    My comment about pressure on home prices due to inventory shortages is verified by the latest existing home sales report. The December numbers show sales fell 3.6 percent to an annualized rate of 5.570 million. November was very strong with a rate of 5.780 million, which is the highest number since the home purchase expansion after the housing meltdown in 2008. Home supply is the only reason for the decline in this data. Supply dropped 11.4 percent all the way down to 1.480 million homes. Translation…this is a 3.2 month’s supply, which is 3 tenths less than November.

     

    New home Sales:

    The 9.3 percent decline in December new home sales is very deceiving. This decline is actually the fourth best rate of new home sales since the recession. The decline appeared because the prior month was actually the strongest reading since the 2008 housing crisis. Supply of new homes is fairing slightly better than existing homes sales with inventory at a supply rate of 5.7 months.

     

    Next week’s potential market moving reports are:

    • Tuesday January 30th – S&P Corelogic Case-Shiller Home Price Index, Consumer Confidence
    • Wednesday January 31st – MBA Mortgage Applications, ADP Employment Report, Pending Home Sales, FOMC Meeting Announcement
    • Thursday February 1st – First Time Jobless Claims, Construction Spending
    • Friday February 2nd – National Employment Situation, Factory Orders, Consumer Sentiment

     

    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 government shutdown had a nominal effect on markets and no effect on rates. Another shutdown is possible February 8th, the new deadline for a deal.
    The dollar slumped this week, its biggest weekly decline in 18 months. Treasury Secretary Steven Mnuchin says a weaker dollar could boost U.S. trade though.
    Jobless claims were up from last week’s 45-year low, but still lower than expected. The labor market continues to tighten with near full employment.

     

    Existing home sales were down 3.6% in December from November, but were up 1.1% year-over-year. A lack of supply of homes on the market played a role.
    New home sales were also down in December, blamed partly on unseasonably cold temperatures. However, new home sales were 14% higher than a year ago.
    Rising mortgage rates have spurred more buyers off their couches and into the market. Mortgage applications were up 4.5% over last week, 6.1% over last year.

    To steal ideas from one person is plagiarism. To steal from many is research.

     

    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
  • Labor market rebounds in this week’s Markets in a Minute!

     

     

    For the Week Ending January 19, 2018

     

    The Stock Market and the Economy:

    Stocks continue to rise, hitting 26,000 this week. Investors continue to pour more money into the market to ride the rising tide. Corporate profit season is upon us and is expected to show great results for the 4th quarter of 2017. Results will be released over the next couple of weeks. Stock market euphoria continues over the tax plan passed a couple of weeks ago.

    It was inevitable that talk of regulation on cryptocurrencies was bound to heat up. More and more countries are announcing plans to either regulate, or completely prohibit trading. Bitcoin, which is the most know currency, has lost almost 50% of its value from its all time high just a few weeks ago. Most other currencies have taken it on the chin with losses in the 25%-40% range.

     

    Housing Market Index:

    The National Association of Home Builders continue to believe strongly in the housing market. The latest report shows builder confidence at or near all time highs. One of the main factors driving this sentiment is the continued high flow of traffic at properties. Even first-time buyers are showing up at new construction sites which has been something that was noticeably absent in recent years.

     

    Housing Starts:

    Despite the surprising drop in single family starts, the latest data on new home construction activity continues to point to a strong housing market. Single-family starts declined 11.8 percent which certainly was not anticipated by anyone. Weather in the winter months can play a factor in this data and can cause wide movement in this report.

    Permits for new single-family construction came in with a very strong annualized rate of 881,000, representing an increase in 1.8 percent for the month of December. Lack of available inventory has been the main culprit holding down sales. However, completions of single-family homes jumped 4.3 percent, which is likely to further bolster housing growth in the coming months.

     

    Mortgage Rates:

    The highest rates in ten months did not impact mortgage loan activity. Purchase and refinance application both increased by 3.0 percent and 4.0 percent respectively in the week ending January 12th.

     

    Next week’s potential market moving reports are:

    • Tuesday January 23rd – Richmond Fed Manufacturing Index
    • Wednesday January 24th – MBA Mortgage Applications, FHFA HPI, Existing Home Sales
    • Thursday January 25th – First Time Jobless Claims, New Home Sales
    • Friday January 26th – Durable Goods Orders, GDP

     

    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.

     

     

    Jobless claims plunged to the lowest level since 1973 this week, the biggest drop since April 2009. Labor market strength can pressure rates higher.
    According to a recently released Fed report, the economy and inflation expanded at a modest-to-moderate pace from November to the end of 2017.
    Inflation, which pressures interest rates to move higher, is not increasing across the U.S. consistently. West coast metro areas are showing higher inflation. 

     

    Although homebuilder confidence was down slightly in January, it’s still strong. Builders’ biggest concerns remain costs of material and labor shortages.
    New housing starts fell more than expected in December. However, the moderation is likely to be temporary amid strong demand for housing.
    Mortgage purchase applications jumped 4.1% last week, and volume rose 5.6% over last year. Speculation is that consumers fear rates may be increasing.

    The early bird may get the worm, but the second mouse gets the cheese in the trap.

     

    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
  • Using bitcoin to buy a mansion in this week’s Markets in a Minute!

     

     

    For the Week Ending January 12, 2018
     

     The Stock Market and the Economy:

    The stock market continues to soar to the stars. Another week, and more record highs. The driving force behind the Dow’s rocket ship climb is the expectation of tremendous growth in corporate earnings. The economy as a whole is doing extremely well. We are essentially at full employment in the United States. There are numerous strong economic data reports that have been coming out. Inflation remains low while interest rates are also low. Major corporations are showing strong profits.

     

    Now add on top of all this the fact that corporate taxes are dropping from 39% to 21%. This sets the stage for huge corporate profits and business growth. As much as there has been much criticism regarding the change in tax policy, more and more companies are announcing that they are giving some of the tax reduction windfall back to their employees. Albeit in most cases, what is being paid out to employees is not significant in comparison to the savings the companies will receive, it is still more money going to consumers that will bolster the economy further.

     

    Job Openings and Labor Turnover Report:

    Despite the fact that the number of job openings has declined slightly from the highs of July, there is still clearly a labor shortage. New hiring continues to remain strong at or near the all-time high that was set in October at 5.592 million.

    Workers and employers however are remaining risk adverse. The number of people leaving their current jobs declined by 0.9 percent in November. Even though there are plenty of job openings, it appears that workers seem to be more comfortable and secure remaining where they are versus seeking higher pay.

     

    Mortgage Application Activity:

    Despite mortgage rates rising in the first week of the year, home loan activity for both purchases and refinances continues to point to a strong housing market. For the week ending January 5th, applications for refinancing unexpectedly jumped by 11.00 percent. For the same period mortgage apps for purchasing increased by 5.0 percent. Refinance applications still represent approximately 52 percent of mortgage loan activity.

     

    Next week’s potential market moving reports are:

    • Monday January 15th – Martin Luther King Jr. Day
    • Tuesday January 16th – Empire State Manufacturing Survey
    • Wednesday January 17th – MBA Mortgage Applications, Housing Market Index
    • Thursday January 18th – First Time Jobless Claims, Housing Starts
    • Friday January 19th – Consumer Sentiment

     

    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.

     

     

    Producer prices fell for the first time in nearly 1-1/2 years in December. This could temper expectations that inflation will accelerate in 2018.
    Unemployment benefit claims increased for the 4th straight week, to a 3-month high. Likely due to weather, the change doesn’t signal weakness in the labor
    market.
    The implemented tax reform is already being credited for increased economic growth. Multiple companies are reported to be passing savings on to workers.

     

    CORRECTION FROM LAST WEEK: The final tax reform plan does
    not allow taxpayers to deduct interest for either new or existing home equity loans. We apologize for the error.
    Mortgage applications on newly constructed homes rose 18% in December from the previous month. The applications were 7.8% higher than December 2016.
    The seller of a 9,000-sq-ft mansion in Malibu is willing to accept bitcoin as part of the payment. The volatile cryptocurrency is not usually used for home
    purchases.
    Home equity has hit a new record high, reported to be $5.5 trillion. Remodeling spending topped $152 billion in 2017 and is forecast to increase in 2018.

    How long have I been working for this company? Ever since they threatened to fire me.

     

    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
  • Fresh news for 2018 in this week’s Markets in a Minute!

     

     

     

    For the Week Ending January 5, 2018

    The Stock Market and the Economy:

    Heading into the new year, “all systems go”. The stock market continues to rise and faith in the economy continues to grow. Employment does not seem to be a concern as job growth continues to rise and unemployment remains at historical lows. The Fed minutes released this week show that the board members want to continue to increase interest rates. However, there plan is for doing it slowly and making sure they remain in tune with any changes in the economy that would
    require altering their plan.

     

    Additionally, the most recent forecast for global economic growth is strong. Europe, which has struggled for many years, and more so since the Brexit vote, is coming back strong. Car makers are optimistic about European sales, and home builders are feeling great as well. The Japanese economy is also doing quite well.

     

    U.S. Motor Vehicle Sales:

    One of the strength indicators of the U.S. economy is often motor vehicle sales. For the month of December, sales remained strong at an annualized rate of 17.9 million versus November’s 17.5 million. Other than October and November sales, which were off the charts because of hurricane-replacement demand, December’s pace is one of the best over the last 2 years.

     

    U.S. Construction Spending and Manufacturing:

    Spending increased broadly in November, with a reported jump of 0.8 percent. Construction spending on residential properties rose 1.0 percent. Single-family inventory increased by a very welcome 1.9 percent. This rise in available properties should translate into further increases in new home sales in the coming months. Homeowners also seem to be putting more money into their properties. Home improvement rose by a strong 0.7 percent for the month.

     

    The best part of this report is that single-family construction is up 8.9 percent from the same time last year. Home improvements are up by a whopping 9.8 percent. All of this positive data adds on to the recent string of strong and improving housing reports.

    The ISM Manufacturing Index jumped with a 14 year high for new orders. The index rose by 1.5 points up to 59.7 which points to great strength in the sector. Inventories are dwindling because of demand.

     

    Next week’s potential market moving reports are:

    • Monday January 8th – Consumer Credit
    • Tuesday January 9th – Job Openings and Labor Turnover Report
    • Wednesday January 10th – MBA Mortgage Applications
    • Thursday January 11th – First Time Jobless Claims, Producer Price Index
    • Friday January 12th – Consumer Price Index, Retail Sales

     

    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 passed for 2018 is expected to spur more economic growth. A stronger economy could pressure mortgage rates higher through 2018.
    The minutes from the Fed’s last meeting showed concerns over sluggish inflation. The lack of inflation has helped to keep mortgage rates low in the past.
    The labor market continues to show strength. The private sector added 250,000 jobs in December, the biggest increase since March.

     

    Home prices continue to soar. CoreLogic reports for November 2017 show that home prices were up year-over-year by 7%, the 4th consecutive month of growth.
    The Federal Housing Finance Agency is considering the VantageScore model instead of FICO for mortgage lending. This could result in more qualified buyers.
    The final tax reform plan changed the mortgage deduction on new loans from a cap of $1 million to $750,000, with an additional $100,000 for home equity loans.

    My New Year’s resolution is to help all my friends gain ten pounds so I look skinnier.

     

    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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