Shelter Six:  Home Sales Down Slightly but Inventory Up Slightly

June 25, 2018 by · Leave a Comment 

1. May Existing Home Sales decreased slightly from April and were 3% lower than a year ago.

2. National home inventory was up 3% from April to a 4.1-month supply (6 months is considered healthy), but still 6% lower than a year ago.

3. Home builders may be helping to address the shortage of inventory as May Housing Starts jumped higher than expected (5%) from April, to the highest level since July 2007.

4. The Trump Administration formally rolled out a plan last week to massively reorganize the federal government including several significant changes to housing and finance.

5. One big logical change would be USDA loans moving from being under the Department of Agriculture to HUD.  A similar proposal to move VA under HUD was rejected.

6. The biggest overhaul would be Fannie Mae and Freddie Mac transitioning to fully private entities that still had access to a federal guarantee but with greater competition, transparency, and accountability, as well as less risk of a taxpayer-funded bailout.

Rate Update

After an extremely quiet week, mortgage rates remain unchanged.

This Week

New Home Sales will be released on Monday, both Durable Orders and Pending Home Sales on Wednesday, and Core PCE on Friday.

Shelter Six:  Federal Reserve Bumps up Rates .25%

June 18, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve increased short-term rates by .25% last week.  The net effect on mortgage rates was minimal.

2. For the third straight month, Retail Sales were much higher than expected with solid gains in May.

3. After weak Retail Sales reports over the first quarter of the year, investors’ concerns about the economy have eased.

4. Self-employed buyers now have a mortgage alternative without the need for tax returns or income documentation.

5. Shelter’s “SmartSelf” program allows a self-employed buyer’s income to be calculated exclusively from bank statements.

6. The program requires only 10% down with no PMI and a 620 credit score while allowing for a Bankruptcy or Foreclosure as recent as two years ago and up to 15 financed properties.

Rate Update

Both Federal Reserve and European Central Bank meetings last week influenced rates slightly with mortgage rates ending the week a little lower.

This Week

It is a light week for economic reports with Housing Starts due out on Tuesday, Existing Home Sales on Wednesday, and the Philly Fed Regional Manufacturing Index on Thursday.

Shelter Six:  Free Credit Report Freeze Coming This Fall

June 11, 2018 by · Leave a Comment 

1. Thanks to recent legislation, this September Americans will be able to freeze their credit at all three credit bureaus free of charge.

2. This will be a great way to protect personal information from credit fraud and identity theft thanks to the Economic Growth, Regulatory Relief & Consumer Protection Act signed in May.

3. A credit freeze means no one can access credit to fraudulently open a new account in your name.  The charge has typically been $3-5 per credit bureau per person.

4. Since record keeping began in 2000, April is the first month ever where the number of job openings exceeded the number of job seekers.

5. The “JOLTS” report measures job openings and labor turnover rates, and the Fed closely monitors this data.

6. In April, job openings unexpectedly jumped to 6.7 million, a record high level, and there were just 6.3 million unemployed people in the labor force that month.

Rate Update

Mortgage rates moved up last week as a result of strong economic reports.

This Week

The next U.S. Fed meeting will take place on Wednesday, and investors widely expect a .25% drop in short-term rates.  The Consumer Price Index (CPI) will also be released on Tuesday and Retail Sales on Thursday.

Shelter Six:  Very Strong May Employment Report

June 4, 2018 by · Leave a Comment 

1. The U.S. added a very strong 223K jobs in May, much higher than expected.

2. The U.S. economy has now added an average of 207K jobs per month so far this year.

3. The Unemployment Rate is now down to 3.8%, the lowest level since 2000.

4. Fannie Mae’s Home Purchase Sentiment Index measures consumer confidence in the U.S. housing market and hit an all-time high in April.

5. The U.S. Energy Information Administration has forecasted gas prices to average $2.90/gallon this summer, almost 50 cents higher than last summer.

6. The higher forecasted gas prices are due to a tightening market, Iran sanctions, and other geopolitical concerns across the globe.

Rate Update

Mortgage rates dropped last week as investors bought U.S. bonds out of concern that Italy’s newly formed coalition government may eventually leave the European Union.

This Week

Factory Orders will be released on Monday, the ISM National Services Index on Tuesday, and the JOLTS Report on Wednesday.  News about Italy could also influence mortgage rates again this week.