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  • Fed Chair Powell moves markets in this week’s Markets in a Minute!

     

     

     

    For the Week Ending March 2, 2018

     The Stock Market:

    What a difference a week makes. From the stock market loving President Trump’s tax reform, to now hating on the new Fed Chairman’s lack of a clear message on interest rate plans for 2018. We all know from past history, that no matter what the Fed says, they can always change their plan as needed based upon economic conditions. However, the Fed usually outlines a definitive plan. New Fed Chairman Powell has been waffling in his communication and no real plan for rates is clearly stated. This uncertainty is leaving investors concerned.

     

    In addition, the latest announcement on Thursday by President Trump regarding plans to add tariffs on Steel and Aluminum imports has the markets rattled as well. A move like this can have a significant impact on not only automobile prices, but almost any product that uses either metal or aluminum in construction or delivery. Tariffs could lead to a global trade war forcing prices on almost any import you can think of to increase. Hopefully, this is nothing more than words and posturing in hope of bringing China more into step with fair trade, which has been a Trump focus since prior to his election.

     

    New Home Sales:

    The latest report on new homes sales was not anywhere close to expectations. Analyst’s were expecting sales to remain stable at a pace of 640K per year. January data shows a significant drop in the pace of sales down to 593K annually. There is however a good part of the latest report that can be extracted when you get past the headline. Supply of new homes jumped from 5.5 months up to 6.1 months, which should create some easing in rapidly rising new home prices. With interest rates going up, the potential slow-down of price increases will allow home affordability to remain in check. A market where both home prices and interest rates go up simultaneously has the potential to quickly push buyers out of the market and create significant home price declines in both the new and existing home markets.

     

    Home Prices:

    The S&P Corelogic Case-Shiller House Price Index for December rose a strong 0.6 percent. The western states led the way with Seattle topping the list with a year-on-year increase of 12.7 percent. Las Vegas was a close second with 11.1 percent. Monthly increases were led by Seattle and Denver with a gain of 1.2 percent. San Francisco and Las Vegas followed right behind with a 1.1 percent monthly gain.. Nationally, home prices remain higher by 6.3 percent from a year ago, and still trending higher.

     

    Next week’s potential market moving reports are:

    • Monday March 5th – ISM Non-Mfg Index
    • Tuesday March 6th – Factory Orders
    • Wednesday March 7th – MBA Mortgage Applications, ADP Employment Report
    • Thursday March 8th – First Time Jobless Claims
    • Friday March 9th – National Employment Situation

     

    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.

     

     

    New Fed Chair Jerome Powell appeared for his first time in front of Congress this week. He moved markets with his upbeat economic views, pressuring rates.
    Consumer prices increased in January, and inflation posted its largest gain in 12 months. Inflation pressures rates higher, including mortgage rates.
    The labor market continues to show strength as well. Filings for unemployment benefits fell last week to the lowest level in almost five decades.

     

    Home prices accelerated in December, according to a recent Case-Shiller report. Prices were up 6.4% year-over-year with continued strong buyer demand.
    Pending home sales were down 4.7% in January. However, the drop is likely due to tight inventory and bad weather rather than increased mortgage rates.
    Buyer traffic was strong in January, but listings fell to an all-time low, down 9.5% year-over-year. This can continue to fuel price gains.

    Middle age is when work is a lot less fun, and fun is a lot more work.

     

    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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  • Lowest jobless claims in 45 years in this week’s Markets in a Minute!

     

    For the Week Ending February 23, 2018

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    Minutes from the Fed’s last FOMC meeting point to more policy rate hikes ahead. Officials have seen an increase in economic growth and an uptick in inflation.
    The Fed doesn’t control mortgage rates, yet rates are influenced by the Fed’s actions. As the Fed raises policy rates this year, mortgage rates will likely
    follow.
    Jobless claims hit a near 45-year low last week, pointing to strong job growth in February. A strong labor market supports the growing economy.

     

    Existing home sales fell unexpectedly in January, possibly due to tight inventory and rising mortgage rates. Home supply has declined for 32 straight months.
    New housing starts were up though, to a 1-yr high of 1.326 million in January. Building permits soared to their highest level since 2007.
    While builders are busy creating new homes, condos are lacking. Condos are 7% of the multifamily market (down from an average of 22% from 1985-2003).

    Q: What starts with E, ends with E, and has only 1 letter in it?
    A: Envelope

    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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  • What’s to love about the housing market? Find out in Markets in a Minute!

     

     

    For the Week Ending February 16, 2018

    The Stock Market:

    It seems as if the stock market panic has subsided. With calmer heads prevailing and the reality check that virtually every piece of recent economic data pointing to a strong economy, investors have returned to buying stocks. Through Thursday of this week the stock market is up 827 points, with the indices set to open slightly higher on Friday.

     

    Inflation Report:

    One of the other drivers of investor fear has been the belief that inflation is heading higher rapidly. This week’s long-awaited inflation report, confirmed that inflation is increasing, but not nearly at the level in which investors were expecting.

     

    Inflation on the wholesale level rose 0.4 percent, which was on target with expectations. Although this increase is higher than we have seen for some time, it is in no way showing a rapid rise in prices that many had feared.

     

    Prices on the retail level, as indicated by the latest report in the Consumer Price Index, showed a slightly hire than expected increase of 0.5 percent. However, despite this increase, overall inflation, compared to the same time last year, is only up 2.1 percent. This reinforces the fact that significant upward pressure on prices is still difficult to see.

     

    Mortgage Applications

    It was to be expected. With mortgage rates rising, combined with last weeks chaos on Wall Street, sooner or later this would show up in the mortgage application data. Applications for purchase loans declined by 6.0 percent, while refinances declined by 2.0 percent. Given the volatility in the market, these declines are actually less than most experts anticipated. The spread between application activity from the same time last year has narrowed to only 4.0 percent.

     

    Housing Starts:

    Housing ended 2017 on the upswing and is continuing to show great strength kicking off 2018. Housing starts in January jumped to the second highest level since the recession at an annualized rate of 1.326 million. This represents an almost 10 percent increase, when analysts were only expecting a rise of about 2.0 percent.

     

    Next week’s potential market moving reports are:

    • Monday February 19th – Presidents Day – All Markets Closed
    • Wednesday February 21st – MBA Applications, Existing Home Sales
    • Thursday February 22nd – First Time Jobless Claims, Leading Indicators

     

    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.

     

     

    Consumer prices rose more than expected in January, fueling fears that inflation is moving higher. Rising inflation will continue to pressure mortgage rates
    higher.
    The labor market is still showing strength, with jobless claims remaining below the 300,000 threshold. Wages are also showing signs of increasing.
    Rising inflation and the strong labor market have economists thinking the Fed may actually raise policy rates 4 times this year instead of 3.

     

    Higher rates are affecting mortgage applications, which were down 4.1% overall last week. Purchase applications were still 4% higher than last year though.
    Two-thirds of home buyers said they searched 3+ months before going under contract. Twenty-seven percent said they were outbid by another buyer.
    In a recent survey, only 6% of home shoppers said they would stop their current home search if mortgage rates were to rise above 5%. Not too bad.

    My wife called me lazy and said I’d better have something planned for Valentine’s Day. I said, “Yes, I was thinking of taking the Christmas
    decorations down.”

     

    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
  • Are robot real estate agents a thing? Find out in this week’s Markets in a Minute!

     

     

    For the Week Ending February 9, 2018

    The Markets and the Economy:

    Looking at what is happening in the stock market should only be done with an air sickness bag in hand. The volatility that exists is unprecedented. At the start of the great recession back in 2008, the plummeting markets were based upon the housing market crashing. Mortgage defaults were rising and that created a wave of defaults on home loans, which then spread to banks, investors, financial institutions, and the list goes on and on.

     

    What you are seeing this last week with the stock markets diving over 1000 points on Thursday is not based on negative economic conditions in any way. Almost every major economy in the world is strong. There are no issues even remotely comparable to what existed back in 2008. So, then what is the issue causing this mayhem to occur?

     

    Simply stated, it is all about interest rates and herding panic. With the economy doing well, and the Fed raising interest rates, there is a high likelihood that corporate profits will be negatively impacted. Investors, who normally have a concern about stock prices, would take their money from the market and place it into U.S. Treasuries. However, since the treasury market is getting hammered with bond prices climbing and their yields declining, (Bond prices and yields move in opposite directions) investors are selling stocks and moving them into cash. What this in effect does is it makes both the stock market and treasury markets unattractive to place money. As more people pull money from both, the problem gets exaggerated, which then causes more people to pull money, creating a herding effect.

     

    What is happening is purely unjustified panic by investors as it is feeding on itself. The world economy is in great shape and what exists in the markets is panic and fear. It will subside, and the markets will return to normalcy. It always does, and this will be no different. The good news is that the economic fundamentals that exist remain strong and the markets will stabilize once cooler heads begin to prevail.

     

    Mortgage Applications

    Applications for mortgage loans on both purchases and refinances remained virtually unchanged for the week ending February 2nd. Based upon the volatility in the stock market and treasury yields, this data would be considered old news. The reality of interest rates rising will become visible in next week’s Mortgage Bankers Association report to be released on Wednesday.

     

    Next week’s potential market moving reports are:

    • Wednesday February 14th – MBA Applications, Consumer Price Index, Retail Sales
    • Thursday February 15th – First Time Jobless Claims, Producer Price Index, Industrial Production, Housing Market Index
    • Friday February 16th – Housing Starts, 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.

     

     

    Mortgage rates have consistently crept up a little each week through 2018, hitting 4-year highs. Even still, rates are historically low, which may make it
    a good time to buy.
    The rising bond yields responsible for higher mortgage rates have also shaken up the stock markets. There is a lot of fear that we may see accelerated inflation.
    The outlook for 2018 is good for the economy, and the Fed is expected to raise policy rates. It’s likely mortgage rates will increase some more this year.

     

    Mortgage applications have been on the rise recently despite higher rates. Applications were up 5% last week compared to the same time last year.
    Swift price increases and inventory shortages are frustrating renters looking to purchase. Still, 58% of those polled say now is a good time to buy.
    Robot open houses? Technology at San Francisco-based Zenplace enables agents to show properties remotely. A live agent speaks through a video monitor and
    controls the robot’s movements.

    A clean desk is a sign of a cluttered desk drawer.

     

    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
  • 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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