October Markets in a Minute

October Markets in a Minute

October 26, 2017

The Economy

Stocks continue to hit new highs, driven by optimism over new tax regulations and a spurred economy. The rally is putting pressure on rates to move higher.

The European Central Bank is extending their economic stimulus into 2018 but will reduce the amounts. Overall the news was positive for bonds and rates.

The Fed will meet next week for their FOMC meeting. It’s not likely they will raise policy rates next week, but they are expected to do so at the December meeting.

Housing News

New home sales surged 18.9% in September to the highest level in 10 years. This was a nice recovery after unexpectedly falling 3.4% in August.

Pending home sales were flat in September though, as demand continued to exceed supply. There are some concerns that winter will further reduce inventory. As these concerns continue into 2018, Realtors and lenders are recommending that all potential homebuyers get pre-approved for a residential mortgage. We offer a variety of mortgage options to Dallas/Fort Worth area buyers, including loans for veterans and first-time homebuyers. Get pre-approved today by filling out an online mortgage application.

Mortgage applications for home purchases were down last week. Economists say rates likely had less to do with the drop than the shortage of homes for sale.

October 19, 2017

The Economy

Recently released economic data shows the economy is growing, but inflation is still not a problem. Rising inflation pressures mortgage rates to move higher.

The Fed is expected to leave policy rates unchanged at this month’s meeting but raise them at December’s meeting, despite lack of inflation.

Unemployment benefit claims fell to a 44-year low last week. This points to a rebound in job growth after a hurricane-related decline in September.

Housing News

Builder confidence in the housing market rose to a 5-month high in October. However, builders still increased material costs and labor shortages. Housing starts were at a 1-year low in September, due to hurricanes disrupting construction. The storms are also blamed for a decline in building permits.

Housing market fundamentals, however, remain solid. Mortgage applications for home purchases were up 4% week-over-week, despite the holiday week.

October 12, 2017

The Economy

The minutes releases from last month’s Fed meeting showed some members don’t agree that low inflation is transitory. Low inflation helps keep rates low. However, it’s still expected that the Fed will leave rates unchanged in October and November, but will hike policy rates in December. There’s an 88% probability at the moment.

Producer prices rose in September as gasoline prices jumped. Jobless claims dropped to a one-month low, showing strength in the labor market.

Housing News

Natural disasters continue to reduce inventory in already tight markets. An estimated 9.1 million homes are at risk in Napa and Sonoma counties in California.

The buzz about net-zero homes continues to build. These highly energy efficient homes produce as much or more energy as they consumer for heating and cooling.

The numbers of unfilled jobs in construction continued to rise in Auguest to the highest level since February 2007. Homebuilders added over 80,000 jobs in the last year.

If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.

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.

Markets in a Minute provided by Surefire CRM.

Check out the full story here: October Markets in a Minute

November Markets in a Minute

November Markets in a Minute

Novemebr 30, 2017

The Economy

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.

Housing News

New home sales in October unexpectedly rose to the highest level in a decade. Single-family home sales rose by 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 by 3.5% in October. Led by the hurricane stricken south, the growth was more than double what was expected.

November 16, 2017

The Economy

The Producer Price Index, which measures wholesale inflation, rose 0.4% in October. Core PPI was also up, supporting a Fed rate increase next month.

Retail sales were also improved in October, coming in stronger than expected. The increase of 0.2% signals a growing economy and could pressure rates.

Tax reform continues to make progress in both chambers of Congress. Once passed, the reform is expected to spur further economic growth.

Housing News

Homebuilder confidence hit an 8-month high in November, despite increased costs and labor shortages. Buyer demand remains high on reduced inventory. National mortgage delinquency rates continue to fall, down 0.6% year-over-year in August. Foreclosure inventory was also down 0.3% year-over-year. Due to the shortage of inventory, especially in North Texas, the Dallas/Fort Worth real estate market has become very competitive for buyers. We offer a number of mortgage options for DFW buyers, and are experienced in loans that might be considered difficult for larger lenders, such as self-employed mortgage loans, or certain types of disabled veteran home loans.

The House passed legislation to extend the National Flood Insurance Program for 5 years. However, the Senate still must approve the bill for it to take effect.

November 9, 2017

The Economy

Traders continue to drive stocks to new heights and new records. However, concerns over the new tax reform plan going through have started to surface. The tax plan is expected to drive economic growth and corporate profits. If the plan doesn’t go through as anticipated, it could help interest rates.

The labor market remains strong. Job openings posted by employers in September were steady from the prior month, a near record high.

Housing News

Rents have been increasing far faster than the pace of inflation. However, rising homeownership numbers could curb demand, slowing the increases. New applications for purchase mortgages increased 1% last week. That’s 9% higher year-over-year, as buyers seem less concerned about rates.

The tax reform plan, as proposed, would lower the mortgage deduction on new purchases. There are lots of opinions of what effect, in any, it would have on sales.

November 2, 2017

The Economy

The Fed announced at this week’s meeting that there would be no policy rate hike this month. They did however signal a December hike is very likely.

Markets have been rallying on the probable nomination of Jerome Powell as the next Fed Chair. Powell is expected to continue the trend of current Fed policies.

The tax reform proposals issued by the House GOP have sparked a stock rally. A proposed cut to corporate taxes is expected to fuel the economy.

Housing News

Home prices hit a new all-time high in August, according to Case-Shiller. National home prices rose 6.1% annually, better than the 5.8% economists expected.

Construction spending increased 2.0% year-over-year in September. Month-over-month spending fell for non-residential construction while residential construction remained flat. Despite tight inventory and rising home prices, the homeownership rate rose in the 3rd quarter. The 63.9% rate is the highest level since 2014.

If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.

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.

Markets in a Minute provided by Surefire CRM.

Check out the full story here: November Markets in a Minute

December Markets in a Minute

December Markets in a Minute

December 21, 2017

The Economy

Both chambers of Congress have approved the final version of the tax reform plan. President Trump should sign it into law on or before January 3rd.

Third quarter economic growth estimates were lowered slightly from 3.3% to 3.2%. Even still, the economy grew at its fastest pace in more than two years.

Despite a jump in the number of filings for unemployment benefits last week, the underlying trend in jobless claims remained consistent with a strong labor market. Unemployment rates in Dallas/Fort Worth remain lower than national averages, and can be attributed to a strong and diverse North Texas economy. To better serve the diverse job market in the DFW area, Jeff Kramer offers a number of mortgage options to potential homebuyers. Ranging from specialty VA loans, to loan programs designed for doctors and dentists, we can help you find your perfect mortgage.

Housing News

Existing home sales hit an 11-year high in November, despite tight inventory. They rose 3.8% on a year-over-year basis, rising for the 3rd straight month.

New home starts were above expectations for November, at 1.297 million (annualized rate). Single-family housing units surged to a more than 10 year high. Pointing to further future increases in inventory, single-family home permits rose 1.4% to 862,000. This is a level not seen since August 2007.

December 14, 2017

The Economy

Tax reform is moving forward. Lawmakers are currently reconciling the Senate and House versions. The GOP is trying to get it done before 2018.

The Fed raised policy rates at this week’s meeting, as expected. The rate increase actually helps to keep mortgage rates low for the near term. The Fed is expected to raise rates three times in 2018, based on current forecasts. The policy rate increases could pressure mortgage rates higher for next year.

Housing News

Homebuilders that focus on entry-level housing are expected to flourish in 2018. A growing economy, solid job market, and low mortgage rates are driving demand.

In its 2018 forecast, Realtor.com predicts home prices will go up 3.2% and sales will increase 2.5%. Inventory is also expected to rise. Mortgage rates remain low, and mortgage applications remain high. New purchase applications were 10% higher than a year ago this time.

December 7, 2017

The Economy

The Fed will meet next week for the final FOMC meeting under Fed Chair Janet Yellen. Jerome Powell has been approved by Congress to take over in 2018.

Jobless claims declined for the 3rd straight week. A strong labor market could support a Fed policy rate increase at next week’s meeting.

The tax reform that is fast-tracking its way through Congress is fueling stocks. The expected economic growth from the plan could push rates higher in 2018.

Housing News

The proposed tax reform plan would cut the mortgage interest deduction on new purchases. However, economists don’t think it will have any effect on the housing market.

Millenials now make up the largest segment of new homebuyers. They are buying the greatest share of starter homes and low-t-mid tier home as well. Due to the competitive landscape of the Dallas/Fort Worth housing market, first-time homebuyers are strongly encouraged to get pre-approved for a home loan.

Construction spending hit a record high in October. Private residential spending rose 11.2% year-to-date, with new single-family construction up 9%.

If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.

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.

Markets in a Minute provided by Surefire CRM.

Check out the full story here: December Markets in a Minute

January Markets in a Minute

January Markets in a Minute

January 25, 2018

The Economy

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.

Housing News

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 unseasonable 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. Due to the competition among buyers, and the shortage of inventory, it is more important than ever for buyers to be pre-approved before they began looking for homes to buy. This is especially important for Dallas/Fort Worth first-time homebuyers and self-employed buyers.

January 18, 2018

The Economy

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.

Housing News

Although homebuilder confidence was down slightly in January, it’s still strong. Builder’s 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. Based on current market trends, rising rates are highly likely.

January 11, 2018

The Economy

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. There have been numerous reports of bonuses being paid to employees this year. In many cases, this could be a perfect opportunity for homebuyers to begin building their down payments for home purchases.

Housing News

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 square-foot 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.

January 4, 2018

The Economy

Tax reform passed for 2018 and 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.

Housing News

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.
If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.
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.
Markets in a Minute provided by Surefire CRM.
Check out the full story here: January Markets in a Minute

The Benefits of Using an Independent Mortgage Adviser

Types of mortgage advice

So what are the different types of mortgage advice and where would you expect to find them?

Non-advice

This type of mortgage broker offers the least consumer protection, they will simply ask a set of questions to narrow the customers requirements and thus filtering the number of mortgages available. They then present the customer with a small list of possible mortgages for the consumer to choose one appropriate. The consumer protection here is based on the script of questions the broker asks. The script is a process determined prior to the consumer appointment, and is impersonal. Therefore specific personal circumstances are unlikely to be assessed. It also assumes that the customers answers are factually correct and the final choice is made solely by the consumer. Although no advice is offered these brokers do handle the arranging of the mortgage on the consumers behalf, and therefore dealing with all the chasing and removing stress from the process.

Where would you expect non-advised brokers to exist?

Well believe it or not many non-advised brokers are within the high street banks and building societies.

Advice-only

This type of services is where a mortgage adviser uses their knowledge and skills to provide the most suitable mortgage to suit a consumers personal circumstances. This will involve a full fact finding interview, affordability assessment, discussion on the consumers future plans and aspirations, all of which provide key facts on a consumers requirements, and therefore a means for the adviser to identify suitable products. The adviser will not however, handle the arranging of the mortgage, and therefore the consumer would need to deal directly with the bank or buildings society to arrange the mortgage.

Where would you expect advice-only advisers to exist?

These advisers generally do not exist alone this is often a service provided through the 'Independent Mortgage Adviser' type below. And often comes about when the most suitable mortgage is only offered direct through high street (i.e. not through mortgage advisers/brokers). The adviser would therefore offer an advice-only option to the client and often charge a fee for this service. Although the client must deal directly with the bank or building society their mortgage adviser often provides support to the consumer.

Tied mortgage advisers

Tied mortgage advisers come in two forms 'only offering mortgages from one lender or its own mortgages' or multi-tied 'only offer mortgages from a limited number of lenders'. This clearly limits the number of mortgage products available to match a consumers personal circumstances and in a lot of cases they may not be able to offer the most suitable mortgage product and therefore advice may result in the best mortgage they can offer, being woefully inadequate.

Read more on... The Benefits of Using an Independent Mortgage Adviser

Author: Steve Wentworth