Shelter Six:  North Korea Continues to Influence Mortgage Rates

Each time North Korea has conducted a missile test this year, investors have shifted money to the bond market, which has lowered interest rates.

As North Korea celebrated its 69th anniversary last week, many investors expected another missile test.  When this did not occur, rates pushed higher.

At the end of the week, however, investors broke from the recent trend and showed surprisingly little reaction to yet another missile launch.

Two big economic reports released on Friday fell well short of expected levels with retail sales falling .2% from July and auto sales dropping sharply as well.

Much of the drop in auto sales was due to the hurricanes though and, with all of the vehicles destroyed, auto sales should boost higher in the months ahead.

The hurricanes will continue to skew economic data in the short-term but, hopefully, weakness will transition to strength as rebuilding gains momentum.

Rate Update

Developments in North Korea continue to influence rates.  Last week’s U.S. economic data caused little reaction though and mortgage rates ended the week up slightly.

This Week

Housing Starts will be released on Tuesday and Existing Home Sales on Wednesday.  The Federal Reserve also has a big meeting on Wednesday as well.

September 17, 2017 by · Leave a Comment

Shelter Six:  Rates Being Influenced By Many Factors

It truly has been a crazy last week full of geopolitical concerns and brutal hurricanes.

North Korea conducted its most powerful missile test yet and investors flocked to the safety of U.S. bonds, which lowered mortgage rates.

The debt ceiling also continues to have a big impact on rates with increases in uncertainty driving rates lower and signs of progress pushing them higher.

On Thursday, the European Central Bank postponed a discussion about tapering its bond buying program until its next meeting, so there was little reaction.

The effects of Hurricane Harvey were evident in the latest Jobless Claims Report with claims jumping to 298K, the highest level since April 2015.

Now attention turns to Hurricane Irma, which is sure to disrupt many closings throughout Florida, Georgia, and the Southeast over the coming months.

Rate Update

Despite the many factors influencing rates, the net effect was small and rates actually dropped to the best levels of the year.

This Week

The Job Openings and Labor Turnover Rates Report is due out on Tuesday, the Consumer Price Index (CPI) on Thursday, and Retail Sales on Friday.  Headlines about the debt ceiling will also continue to influence rates as well.

September 11, 2017 by · Leave a Comment

Shelter Six: Happy Labor Day from Shelter Mortgage!

Labor Day is a day to celebrate the American worker and has long been considered the unofficial end of the summer.

The first Labor Day celebration was held by the Central Labor Union in New York City in 1882.

Oregon became the first state to make Labor Day a public holiday in 1887 and it became a federal holiday in 1894.

Happy Labor Day from everyone at Shelter Mortgage as we wish you and your family a day of rest and fun!

Last week, August Employment figures revealed job gains to be a little lower than expected. The ISM National Manufacturing Index, however, came in much higher than expected.

Inflation data was in line with expectations and the Federal Reserve would actually like to see inflation higher in the months to come.


Rate Update

Despite tensions with North Korea causing a jittery market, a tame inflation report kept mortgage rates in check last week and near the best levels of the year.


This Week

Factory Orders will be released on Tuesday, ISM National Services Index will be released on Wednesday, and the European Central Bank will be having a key meeting on Thursday.

September 3, 2017 by · Leave a Comment

Shelter Six:  Listings Continue to Sell Fast

Strong buyer demand drove listings to go under contract in less than 30 days in July for the fourth consecutive month, according to NAR.

First-time buyers continue to make up more of the market accounting for 33% of sales in July, up 1% from June.

July Existing Home Sales increased 2.2% in the South despite dropping 1.3% nationally as inventory fell to a 4.2 month supply, down from 4.8 months a year ago.

Fannie Mae implemented major underwriting changes this month including increasing the maximum debt ratio from 45% to 50%.

In addition, Fannie Mae will no longer require a borrower to take action on a disputed credit account if the loan is approved considering the disputed account.

Also, if someone else is paying a borrower’s mortgage payment, it no longer has to be included in the debt ratio with proof the other party has made timely payment for last 12 months.

Rate Update

There was little reaction to last week’s economic data, political news, or Fed Chair Yellen’s speech and mortgage rates ended the week slightly lower, at the best levels of the year.

This Week

The Core PCE Price Index is due out on Thursday with Employment figures as well as the ISM National Manufacturing Index due out on Friday.

August 28, 2017 by · Leave a Comment

Shelter Six:  July Retail Sales Surge

Solar eclipse day has finally arrived!  The last time a total eclipse occurred exclusively in the U.S. was in 1778.

Experiencing a total solar eclipse where you live happens only about once every 375 years.

After several months of weak data, July Retail Sales surged .5% from June, a very positive sign for future economic growth.

It appears from the Fed minutes released last week that there is a growing divide between Fed officials about when inflation will rise and when short-term rates should be increased.

Fannie Mae now allows lenders to deduct alimony from income instead of counting it as debt, a very positive change that will help more people be able to qualify.

There was another record high for U.S. home prices in May with the S&P CoreLogic Case-Shiller U.S. National Home Price Index gaining 5.6%.

Rate Update

Uncertainty within the Trump administration combined with uncertainty within the Fed around when to increase rates were offset by strong economic data last week with the net result being little change and rates remaining near the best levels of the year.

This Week

New Home Sales will be released on Wednesday, Existing Home Sales on Thursday, and Durable Orders on Friday.

August 21, 2017 by · Leave a Comment

Shelter Six:  Inflation and Mortgage Rates Both Remain Low

Fed officials are hoping for inflation to rise to a target of 2%, but recent data has not cooperated.  July’s CPI Index revealed that inflation was just 1.7% higher than a year ago.

Concerns around North Korea have led investors to shift from riskier stocks to relatively safer bonds with mortgage rates dropping as a result of this “flight to safety.”

A Selling Agent sent feedback last week that his Buyer’s offer was accepted among several competitive ones because Shelter was going to be the lender.  Let our reputation help you!

A recent Redfin survey indicated that 33% of people who bought a home over the last year made an offer without first seeing the home in person (up from 19% a year ago).

The survey also indicated that only 5% of buyers claimed they would cancel plans to move if rates surpassed 5%.

President Trump said he may reappoint Federal Reserve Chair Janet Yellen to a second term but is also considering White House National Economic Council Director Gary Cohn.

Rate Update

Low inflation and rising tensions with North Korea offset strong labor market data last week to push mortgage rates down and near the best levels of the year.

This Week

Retail Sales will be released on Tuesday, Housing Starts on Wednesday, and Industrial Production on Thursday.  News about North Korea could affect mortgage rates as well.

August 14, 2017 by · Leave a Comment

Shelter Six:  Employment Data Stronger Than Expected

Friday’s Employment Report was stronger than expected with the economy adding 180K jobs in July.  The Unemployment Rate dropped to 4.3%, the lowest point since 2001.

Low inflation is always good for mortgage rates and last week’s Core PCE Price Index showed that inflation remains below the Fed’s 2% target level.

The July ISM Services Index fell well below the consensus, which was a concern because 75% of jobs in the U.S. are in the services sector.

Shelter is pleased to offer Georgia Dream’s expanded “$15K Hardest Hit Funds” program, created to stabilize counties in GA hardest hit by foreclosures and negative equity.

The program allows for $15K in down payment to eligible borrowers in Fulton, DeKalb, Gwinnett, Clayton, Henry, Douglas, Paulding, Bibb, Chatham, and Muscogee counties.

Funds are secured in the form of a second lien on the property with no interest and no monthly payments, then the lien is forgiven and released five years after the closing date.

Rate Update

Mortgage rates ended last week slightly lower after reports showed both positive and negative economic data.

This Week

The two biggest reports due out this week are the Job Openings and Labor Turnover Rates Report (JOLTS) on Tuesday and the Consumer Price Index (CPI) on Friday.

August 7, 2017 by · Leave a Comment

Shelter Six:  LIBOR Going Away in Four Years

1. LIBOR is going away.  The UK’s Financial Conduct Authority has decided to eliminate the London InterBank Offered Rate starting in 2021.

2. The vast majority of adjustable-rate mortgages are tied to LIBOR, and the mortgage industry now has four year to find a new primary index.

3. As expected, the Federal Reserve made no change to short-term rates last week and the statement released after the meeting contained little new guidance about future policy.

4. 2nd Quarter Gross Domestic Product (GDP) figures were released on Friday and came in as expected at a healthy 2.6% improvement, which was up from 1.2% in the 1st Quarter.

5. June Existing Home Sales came in roughly the same as April and May and were up slightly over last year.

6. The inventory of existing homes for sale is at just a 4.3-month supply and 7% lower than a year ago, whereas the median existing-home price is 7% higher than a year ago.

Rate Update

Last week’s Fed meeting caused some rate volatility and mortgage rates ended the week slightly higher.

This Week

The ISM National Manufacturing Index and the Core PCE Price Index are due out on Tuesday, the ISM National Services Index on Thursday, and Employment figures on Friday.

July 31, 2017 by · Leave a Comment

Shelter Six:  Fannie Mae Guidelines Easing

Effective this week, Fannie Mae is easing a number of guidelines including increasing the maximum debt-to-income ratio from 45% to 50%, lowering the required down payment on ARM loans to 5%, and reducing tax return documentation for self-employed borrowers.

After three months of declines, June Single-Family Housing Starts were up 6%.

The average home in the US was worth $200,400 in June, smashing through the $200,000 barrier for the first time.

Seen as good news by many in the industry, CFPB Director Richard Cordray is going to vacate his position to run for governor of Ohio next year, according to one of his friends.

It is the time of year when property tax bills are being released.  Remember that if a tax bill is out, the closing attorney must collect for it at closing because GA law views it as a lien.

Even if a seller has paid the tax bill through his escrow account, if the closing attorney can’t verify that the mortgage company has paid it, then the attorney must collect it at closing.

Rate Update

Mortgage rates ended the week lower, mostly due to speculation that the European Central Bank may not scale back its stimulus programs as soon as some investors had thought.

This Week

Existing Home Sales will be released on Monday, New Home Sales on Wednesday, and Durable Orders on Thursday.  The Federal Reserve will also meet again on Wed as well.

July 24, 2017 by · Leave a Comment

Shelter Six:  Average Credit Score Exceeds 700 for First Time

According to FICO, the average national credit score has reached 700 for the first time.

The average credit score bottomed out at 686 during the housing crisis but has been steadily rising since.

FICO also reported that credit card balances and delinquencies have been trending higher as well and are areas of future concern.

In Fed Chair Janet Yellen’s testimony to Congress last week, she said that short-term rates might not have to rise “all that much further” to reach a “neutral policy stance.”

This comment caused a significant reaction as it implied that the Fed might stop raising rates sooner than previously expected, which would be good news for mortgage rates.

Did you know?  On a Conforming loan, if the lender can document that a non-mortgage debt has been satisfactorily paid by another party for the last 12 months, then the debt can be excluded from the debt-to-income ratio, even if the other party is not obligated on the debt.

Rate Update

Comments from Fed officials as well as weaker than expected retail sales and inflation data all contributed to mortgage rates falling last week after rising the previous two weeks.

This Week

The NAHB Housing Sentiment Index is due out on Tuesday, Housing Starts on Wednesday, and the Philadelphia Fed Regional Manufacturing Index on Friday.  The European Central Bank also has a big meeting on Thursday.

July 17, 2017 by · Leave a Comment

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