Shelter Six:  Pending Home Sales Up

March 30, 2018 by · Leave a Comment 

1. After a disappointing January, Pending Home Sales rebounded nicely in February with contracts signed to purchase previously owned homes increasing 3%.

2. This is an important metric because contracts signed are viewed as a leading indicator of future closings.

3. Millennials, or people roughly between 23 and 37 of age, were the most active generation of homebuyers in 2017, according to NAR.

4. Based on a recent survey, NAR estimated that 36% of all home sales involved Millennials last year, up from 34% the previous year.

5. And here comes Generation Z!  The post-Millennial crop of kids born in 1995 and later are buying houses much earlier than the Millennials.

6. MarketWatch reports that just shy of 100K members of Generation Z have already purchased a home and have a payment record better than Millennials.

Rate Update

It was a relatively quiet holiday-shortened week.  The economic data contained no major surprises and caused little reaction, and mortgage rates finished the week a bit lower.

This Week

The ISM National Manufacturing Index will be released on Monday, the ISM National Services Index on Wednesday, and the Employment Report on Friday.

Shelter Six:  The Fed Bumps Up Short-Term Rates

March 26, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve bumped up short-term rates .25% last week.

2. .New Fed Chair Jerome Powell’s first press conference left investors divided about whether there will be three or four total rate hikes this year.

3. Also last week, the Trump administration announced about $50B in new tariffs on Chinese imports.  Although less than expected, fears of Chinese retaliation still remain.

4. A trade war with China would be bad for the economy and stocks, but it’s impact on mortgage rates is hard to predict.

5. February sales of previously owned homes increased 3% from January and would have been even higher if not for the severe weather around the country.

6. Inventory seems to be finally heading in the right direction and was up 5% in February to a 3.4 month supply, but 8% lower than a year ago.

Rate Update

After a major surge in January and February, mortgage rates have managed to hold remarkably steady in March.  Even with the rate and tariff announcements last week, mortgage rates remained flat despite large stock market losses.

This Week

Pending Home Sales will be released on Wednesday and the Core PCE Price Index on Thursday.  Mortgage markets will close early on Thursday and all day on Good Friday.

Shelter Six:  More Lenient Jumbo Product Helps More Qualify

March 19, 2018 by · Leave a Comment 

Shelter is proud to launch Smart Edge, a new “Non-QM” product that will enable Jumbo customers to qualify even with a Bankruptcy, Foreclosure, or Short Sale only two years ago.

The product requires only 10% down, no PMI, a credit score of only 620, and up to a 50% debt ratio.

Smart Edge is also great for investors as it allows up to 15 financed properties and the terms are creative with interest-only ARM’s enabling a very reasonable payment.

February Retail Sales were unexpectedly down for the third straight month.

With consumer spending accounting for 70% of economic activity in the U.S., economists will be carefully monitoring future Retail Sales figures to gauge the economy.

February Single-family Housing Starts were up 3% from January with 510K single-family units under construction, the most since June 2008.

Rate Update

Bad economic news normally drives mortgage rates down and this was true last week as lower than expected retail sales helped mortgage rates finish the week slightly lower.

This Week

This week’s big news is Wednesday’s Fed meeting.  Investors widely expect a .25% increase in the Federal Funds Rate.  Existing Home Sales will also be released on Wednesday, New Home Sales on Friday, and Durable Orders on Friday.

Shelter Six:  Jobs Way Up in February

March 12, 2018 by · Leave a Comment 

1. The economy gained an enormous 313K jobs in February, much higher than expected and the largest gain since July 2016.

2. Construction firms added 61K of the jobs, the highest monthly increase in 11 years!

3. As job growth continues to surge, wages continue to remain flat as average hourly earnings did not increase last month near as much as expected.

4. The Unemployment Rate remains remarkably steady though and is still at 4.1% for the fifth straight month.

5. A quick reminder that the 2018 maximum single-family loan limit is $453,100 for Conforming and $359,950 for FHA for the 29 county Metro Atlanta area.

6. In serving Metro Atlanta, Shelter continues to use only the very best local appraisers who know the areas they work and are always willing to go the extra mile.

Rate Update

Mortgage rates continued to move higher last week as a wide range of events, including important labor market data, a European Central Bank meeting, and government policy changes, all affected the markets in different ways.

This Week

The Consumer Price Index is due out on Tuesday, Retail Sales on Wednesday, and Housing Starts on Friday.

Shelter Six:  New Fed Chairman Paints Rosy Picture for Economy

March 5, 2018 by · Leave a Comment 

1. New Federal Reserve Chairman, Jerome Powell, gave his first testimony to Congress last week and painted a rosier picture for the economy than expected.

2. Powell’s forecasts for higher inflation and wage growth as well as comments that the economy had “strengthened since December” caused mortgage rates to rise.

3. Investors now expect another .25% bump to short-term rates at the next Fed meeting on March 21.

4. Evidence of a strengthening economy, the ISM National Manufacturing Index climbed to the highest level since 2004 and Weekly Jobless Claims fell to the lowest level since 1969.

5. According to NAR, in the 4th Quarter of 2017 single-family home prices reached an all-time high in 114 of 177 (64%) U.S. metropolitan statistical areas.

6. The national median price was up to $247,800, up 5.3% from one year ago. Since 2011, home prices have risen 48% but, interestingly, incomes only 15%.

Rate Update

Mortgage rates remained flat last week as strong economic data and comments from the new Fed Chair were offset by concerns over new global tariffs on steel and aluminum.

This Week

ISM National Services Index will be released on Monday, Factory Orders on Tuesday, and Employment figures on Friday.