Shelter Six:  GDP Remains Strong

October 29, 2018 by · Leave a Comment 

1. Gross Domestic Product (GDP), the broadest measure of economic growth, was up a solid 3.5% for the recently completed 3rd Quarter (3.3% expected).

2. GDP was also up a whopping 4.2% during the 2nd Quarter, making for the strongest back-to-back quarters for GDP since 2014.

3. Thursday’s highly anticipated European Central Bank meeting brought no major surprises or interest rate changes.

4. Realtor.com’s September Housing Report showed the highest rise in new listings since 2013 with Atlanta up 12% over last September.  Nationally, listings were up 8%.

5. Shelter’s new SmartTrac program is designed for Borrowers who have had a Bankruptcy or Short Sale more than one year ago or multiple mortgage late payments over the last year.

6. SmartTrac provides a financing option for these Borrowers while requiring only 20% down and a 620 credit score.

Rate Update

The outlook for global growth slowed last week leading investors to move money from stocks to bonds, which led to a drop in both the stock market and mortgage rates.

This Week

The Core PCE Price Index is due out on Monday, the ISM National Manufacturing Index on Thursday, and the highly anticipated Employment Report on Friday.

Shelter Six:  Home Purchases Predicted to Increase in 2019

October 22, 2018 by · Leave a Comment 

1. The Mortgage Bankers Association (MBA) is forecasting that the strong U.S. economy, combined with low unemployment and rising incomes, will lead to a boost in home buying in 2019.

2. The MBA predicted at its Annual Conference last week that 2019 residential purchase mortgage originations will grow 4.2% over 2018 reaching $1.2 Trillion.

3. The MBA also predicted that the Fed will increase short-term rates once more in December and then three times in 2019, and that mortgage rates will average 5.1% next year.

4. Last week’s most significant economic data was Retail Sales, which were much lower than anticipated in September and just .1% higher than in August.

5. Nationally, September Existing Home Sales were also disappointing falling 3.4% from August and 4% from last year while reaching their lowest level since November 2015.

6. September Housing Starts were also down 5% from August.

Rate Update

The major economic data released last week was generally weaker than expected, but its impact was minor, and mortgage rates ended the week slightly higher.

This Week

New Home Sales will be released on Monday with both Pending Home Sales and Durable Orders due out on Thursday.

Shelter Six:  Stock Market Down, Credit Scores Up

October 15, 2018 by · Leave a Comment 

1. The Dow Jones stock index plunged more than 1,000 points last week shaking up the financial markets but having only a minor impact on mortgage rates.

2. FICO consumer credit scores continue to surge hitting a record high of 704 last month.  Scores have slowly climbed each year since a low-point of 686 in 2009.

3. The main reason for increasing credit scores is that fewer people have truly awful scores that drag the average down.

4. Shelter’s new SmartFunds program is a fantastic solution for a retiree or someone who has significant financial assets but no current job or employment income.

5. The program requires the assets to have been seasoned for at least a year and sufficient to cover the loan amount and all monthly debt obligations for 5 years (minimum of $500K).

6. The SmartFunds program does not have a Debt Ratio requirement, requires only 10% down with no PMI, and at least a 680 credit score.

Rate Update

Last week’s weaker than expected CPI inflation data along with the stock market selloff led to mortgage rates moving slightly lower yet still near the highest level in eight years.

This Week

Retail Sales will be released on Monday, the minutes from the Sept 26 Fed Meeting and Housing Starts on Wednesday, and Existing Home Sales on Friday.

Shelter Six:  Red Hot Economic Data Pushes Mortgage Rates Higher

October 8, 2018 by · Leave a Comment 

The economy continues to fire on all cylinders, which is great news for the future real estate sales, but not so great news for mortgage rates.

Last Wednesday, the ISM National Services Index soared to 61.8, which is the highest level recorded since tracking began in 2008.

This was followed by Friday’s Employment Report, which showed solid improvements in the labor market.

The economy has now added an astounding average of 211K workers per month so far in 2018 compared to an already very strong 182K per month last year.

The Unemployment Rate has plummeted to only 3.7%, the lowest level since 1969.

Average hourly earnings are also on the rise and were 2.8% higher than a year ago.  All of last week’s data points to a very strong economy.

Rate Update

Since it raises the outlook for future inflation, last week’s stronger than expected economic data was bad news for mortgage rates, which reached their highest levels in seven years.

This Week

The mortgage markets are closed on Monday for Columbus Day.  The biggest economic releases this week will be the CPI and JOLTS reports, both due out on Thursday.

Shelter Six:  The Fed Bumps up Rates .25% but Inflation Remains Tame

October 1, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve raised the Fed Funds Rate by .25% last week.  The next rate hike is expected in December.

2. The only surprise at the Fed’s post-meeting press conference was a favorable comment from Fed Chair Powell that Fed officials don’t see inflation spiking more than expected.

3. Following Powell’s comment and right on cue, Friday’s big inflation report came in exactly at the Fed’s stated target level of 2% higher than a year ago.

4. Consumer Confidence is also very strong hitting its highest reading since September 2000 thanks to a healthy labor market and a surging stock market.

5. August home prices were up 5.8% in Metro Atlanta from a year ago, slightly less than the 6% national pace, according to S&P Corelogic Case-Shiller Index.

6. Metro Atlanta home prices are now up 8.1% since the recession peak of 2007 and 78.8% since the low point in 2012.

Rate Update

Last week’s Fed meeting and inflation data were both favorable for mortgage rates leading to a drop in rates from the previous week’s highest point in seven years.

This Week

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