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Swapping student loan debt for mortgage debt in this week’s Markets in a Minute!

Swapping student loan debt for mortgage debt in this week’s Markets in a Minute!
October 6, 2017 Fred Kreger



For the Week Ending October 6, 2017


The Stock Market and the Fed:

Despite the daily commentary on virtually every business news platform that the stock market might be overheated, the indices just keep rising. Once again, this week the Dow Jones Industrial Average is already up 346 points though the end of the Thursday’s trading. The bottom line is that the fundamentals of economic business remain strong, and the labor market is not showing any sign of weakness.


Mortgage Rates and Applications:

Mortgage rates continue to remain very attractive despite moving a few ticks higher during the week ending September 29th. Volume on both mortgage purchases and refinancing barely moved. According to the Mortgage Bankers Association of America applications for purchases increased 1.0 percent while refinancing declined by 2.0 percent. For the week, loan volume is split down the middle between purchase and refi with both areas representing 50% of mortgage financing. The purchase loan volume is still below where it was expected to be. Many experts attribute the lackluster numbers to the hurricane damage in Texas, Florida, and Puerto Rico.


Construction Spending

Following this latest report for August, it is almost impossible to get a read on which direction new construction is going. The latest report for August shows an increase of 0.5 percent. However, July’s report was adjusted to show a decline of 1.2 percent, whereas the initial report showed a drop of only 0.6 percent for the month. It is not uncommon to have adjustments made to initial figures that are released. However, the larger than expected downward adjustment to July’s data caught many analysts by surprise. The good news in the report is that construction spending on residential real estate increased 0.4 percent, and even in July after the adjustment, the sector rose 0.2 percent.


First Time Jobless Claims & The ADP Employment Report

The hurricanes have had an impact on employment, however apparently not anywhere near as much as anticipated. The latest figures from ADP show that the private sector added 135,000 jobs to their payrolls. This figure is very close to analyst’s expectations for the report. First time jobless claims continue to remain well below the psychologically critical level of 300,000. For the week ending September 30th, claims declined by 12,000 down to a very low level of 260,000.


Next week’s potential market moving reports are:

• Monday October 9th – Columbus Day Holiday, Banks Closed, Markets Open
• Tuesday October 10th – Small Business Optimism Index
• Wednesday October 11th – MBA Mortgage Applications, JOLTS Report
• Thursday October 12th – First Time Jobless Claims, Producer Pric

e Index
• Friday October 13th – 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.



Stock markets are once again hitting record highs, as traders’ appetite for risk increases. Strong equity markets can slow down improvements in mortgage rates.
Anticipated tax cuts are one of the drivers for improved equity markets. Corporate tax cuts are expected to help spur the economy, increasing rates.
Despite continued impact from Hurricanes Harvey and Irma, jobless claims fell this week. A strong labor market could support a Fed rate hike in December.


Kitchen renovations are among the top remodeling projects most likely to add value to a home at resale. Homeowners generally recover up to 57% of the cost.
Mortgage applications for purchases were slightly higher last week, up about 1%. That’s nearly 5% higher than a year ago, despite a shortage of inventory.
A national homebuilder is offering a program to pay student loan debt for homebuyers. The program pays up to $13,000 and up to 3% of the home price.

I told my girlfriend she drew her eyebrows too high. She seemed surprised.


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.



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



©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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