Shelter Six: IRS Resumes Providing Income Verifications

January 21, 2019 by · Leave a Comment 

1. One key part of the government shutdown is over as the IRS has resumed providing tax transcripts for mortgage applications, thanks to efforts of the Mortgage Bankers Association (MBA).

2. MBA advocacy is also responsible for the resumption of flood insurance policies, which FEMA had halted at the beginning of the shutdown.

3. Last week was more notable for the economic reports that did not get released rather than the ones that did.  Retail Sales and Housing Starts were not released due to the partial government shutdown.

4. This month’s Retail Sales report was particularly important because it covered the holiday shopping season in December.

5. The lack of key economic data has left the Fed flying blind to a degree.  It is extremely difficult to monitor economic growth and missing data only compounds the problem.

6. As expected, the British Parliament rejected Theresa May’s Brexit deal last week.  The UK is scheduled to leave the EU on March 29 and much of the exit remains unresolved.

Rate Update

Due to the government shutdown, there was little major economic data released last week and mortgage rates ended the week slightly higher.

This Week

Existing Home Sales are due out on Tuesday, New Home Sales on Friday, and Durable Orders on Friday.  Mortgage markets will be closed on Monday in observance of MLK Day.

Shelter Six:  Mortgage Business as Usual Despite Government Shutdown

January 14, 2019 by · Leave a Comment 

1. As we enter the fourth week of the partial government shutdown, the mortgage business has been mostly unaffected but concerns around FHA, verifying income, and funding all loom.

2. The shutdown is causing delays in the release of some government economic reports, which are coming out more sporadically than normal.

3. Good news on the inflation front as the latest inflation figures indicate that inflation continues to track close to the Fed’s target level of 2%.

4. Minutes released from the Fed’s most recent meeting eased investor concerns that the Fed may increase short-term rates too aggressively or too quickly.

5. Mortgage denial rates are at the lowest point since 2004.  CoreLogic estimates that only about one in ten mortgage applications were denied in 2017, the most recent year reviewed.

6. Thanks largely to affordability issues, an excessive Debt Ratio is now the number one reason for mortgage denials (30.3% of all denials) surpassing poor credit.

Rate Update

There were few surprises in last week’s economic data and mortgage rates ended the week with little change.

This Week

Retail Sales will be released on Wednesday, Housing Starts on Thursday, and Industrial Production on Friday.

Shelter Six:  Despite Shutdown, Mortgage Business Still Closing Loans

January 7, 2019 by · Leave a Comment 

1. As the partial government shutdown enters its third week, the mortgage business continues to function and close loans.

2. Conforming and VA financing have not been impacted but FHA is working with a limited staff and, as things get busier, there could be delays with FHA closings.

3. Also, a prolonged shutdown could soon lead to more serious problems as lenders have growing difficulty verifying income and funding loans.

4. On a positive note, Employment figures came in much stronger than expected on Friday with a whopping 312K new jobs added to the economy in December.

5. The Unemployment Rate unexpectedly increased from 3.7% to 3.9%, but this was mostly due to additional workers entering the labor force, which is viewed as a sign of strength.

6. The Consumer Financial Protection Bureau’s plans to change its name to the Bureau of Consumer Financial Protection are dead in the water and the agency will continue to be known as the CFPB moving forward.

Rate Update

Strong Employment figures raised concerns about inflation and contributed to rates pushing higher on Friday after having dropped a good bit over the previous week.

This Week

The ISM National Services Index will be released on Monday, minutes from the latest Federal Reserve meeting on Wednesday, and the Consumer Price Index on Friday.

Shelter Six:  Economic Forecast Points to a Strong 2019

December 31, 2018 by · Leave a Comment 

1. Economically, 2019 is going to be another year of positive growth for GA. According to UGA’s Terry School of Business, look for GA to outperform the U.S. as a whole for the 6th straight year.

2. The GA economy has been expanding for roughly nine years and is presently well-balanced and, absent a full-blown trade war, the risk of a recession is low.

3. Job gains will be more modest in 2019 but the state’s population is growing evidenced by 43K people new to GA last year.  This figure is projected to grow even larger in 2019.

4. GA is now the 11th largest export state and 7th largest import state in the country.  Also, 26 Fortune 1000 Companies now have headquarters in Atlanta (only behind NYC and Houston).

5. Major boosts to GA’s economy will come from large economic development projects, higher defense spending, and population growth.

6. The biggest threats are tariffs and trade tensions, rising interest rates, labor markets without enough workers, and soaring energy prices.

Rate Update

In a very slow holiday week, mortgage rates were flat last week and maintained levels that were the lowest in four months.

This Week

It’s a big end of the week with ADP Employment, Weekly Job Claims, and the ISM Index all due out on Thursday followed by Employment figures to be released on Friday morning.

Shelter Six:  Fed Bumps Rates up .25%

December 24, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve raised the Federal Funds Rate by .25% last week.  Fed officials now expect two rate hikes in 2019, one less than previously forecasted.

2. The most recent inflation data revealed that inflation is still rising but continues to be below the Fed’s stated target level of 2%.

3. The latest news from the housing sector was mixed.  November Existing Home Sales increased more than expected from October, but were 7% lower than a year ago.

4. Inventory fell to a 3.9-month supply, well below the 6.0-month supply that is considered healthy.  The median existing-home price was 4% higher than a year ago.

5. Housing starts rose a solid 3% from October, but the strength came from the multi-unit segment.  Single-family starts dropped 5% to the lowest level since August 2017.

6. In addition, the December NAHB Housing Index showed that home builder confidence declined from 60 to 56, far below the consensus and the lowest level since May 2015.

Rate Update

Continuing concern about the pace of global economic growth was good for mortgage rates and negative for stocks last week.  Rates ended the week slightly lower.

This Week

New Home Sales will be released on Thursday and Pending Home Sales on Friday.  The last week of the year is generally a very light period for the financial markets, which can lead to higher volatility.

Shelter Six:  Maximum FHA Loan Limit Up for 2019

December 17, 2018 by · Leave a Comment 

1. The new 2019 maximum FHA loan limit for Metro-Atlanta is up 5.4% to $379,500 for a Single-Family Detached property.

2. The new FHA loan limits are also up to $485,800 for 2-unit, $587,250 for 3-unit, and $729,800 for 4-unit properties in 2019.

3. A quick reminder that the new maximum Conforming loan limit for Single-Family Detached homes is now $484,350.

4. Did you know that consumer spending accounts for an astounding nearly 70% of all economic activity in the U.S.?

5. Retail Sales is the key metric for consumer spending and has been very strong over the last few months, which bodes well economically for the holiday season.

6. More good news from last week as the most recent inflation data released is in line with expectations.

Rate Update

Despite great stock market volatility, last week was relatively a quiet week for mortgage rates.  The major U.S. economic data came in on target and rates ended with little change.

This Week

The next Fed meeting is on Wednesday and most investors expect a .25% increase in the Federal Funds rate.  In addition, Housing Starts will be released on Tuesday, Existing Home Sales on Wednesday, and Durable Orders on Friday.

Shelter Six:  Another Solid Employment Report

December 10, 2018 by · Leave a Comment 

1. Good news for the 2019 real estate market last week as the latest employment figures showed solid gains in both the number of new jobs as well as wage growth.

2. The economy added 155K jobs in November, a little less than the 190K expected.  So far this year, the economy has averaged a whopping 206K new jobs a month.

3. The Unemployment Rate was unchanged at only 3.7%.

4. For the second straight month, Average Hourly Earnings came in at the fastest pace since 2009 and were 3.1% higher than a year ago.

5. Concerns of an escalation in trade tensions with China along with a reduced outlook for global economic growth have led to scaled back investor predictions of the number of Fed rate hikes in 2019.

6. A reminder that the new maximum Conforming loan limit for Single-Family Detached homes is now $484,350 effectively immediately.

Rate Update

Mortgage rates have dropped to the lowest level in two months mostly on the heels of a reduced outlook for global economic growth over the last few weeks.

This Week

CPI Inflation figures are due out on Wednesday with both Retail Sales and Industrial Production on Friday.

Shelter Six:  Conforming Loan Limit Raised to $484,350

December 3, 2018 by · Leave a Comment 

1. The Federal Housing Finance Agency (FHFA) has increased Conforming Loan Limits to $484,350 (1-unit), $620,200 (2-unit), $749,650 (3-unit), and $931,600 (4-unit).

2. The Housing and Economic Recovery Act (HERA) requires that loan limits for Fannie Mae and Freddie Mac be adjusted annually to reflect changes in the average U.S. home prices.

3. According to the FHFA, home prices increased on average 6.9% from the 3rd Qtr of 2017 to the 3rd Qtr of 2018, and therefore loan limits increased by the same percentage.

4. Both the stock and bond markets reacted favorably last week to comments from Fed Chair Jerome Powell that implied the Fed may be near the end of raising short-term rates.

5. Investors still expect a rate increase at the next Fed meeting on December 19, but the outlook for the number of hikes in 2019 has dropped substantially.

6. Nationally, October’s Existing Home Sales were slightly higher than in September but remained lower than levels seen a year ago.

Rate Update

Wednesday’s speech by Fed Chair Powell was favorable for mortgage rates, which finished at the lowest point in weeks.

This Week

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

Shelter Six:  Home Inventory and Wage Growth Forecasted to Rise

November 26, 2018 by · Leave a Comment 

1. Good news for real estate sales as the Mortgage Bankers Association (MBA) forecasts inventory to expand with gradual increases in the housing supply over the next 2-3 years.

2. The MBA also projects wage growth to accelerate over the next few years, which will help more people be able to qualify at today’s higher rates and house prices.

3. Interesting enough, MBA forecasts mortgage rates to stay mostly flat around 5.1% throughout 2019.  MBA also projects Existing Home sales to increase 4.2% next year.

4. VA remains the best 100% home loan option on the market today and is the ideal mortgage solution for any eligible Veteran.

5. VA is hot and the number of VA purchase loans has now increased year-over-year for seven straight years with VA now making up about 10% of the total mortgage market.

6. The VA loan limit is the same as Conforming ($453,100) but VA allows the Veteran to borrow more by putting 25% down on the difference between the home price and the $453,100.

Rate Update

Last week was a very slow week with the Thanksgiving holiday and mortgage rates remained mostly unchanged.

This Week

Consumer Confidence figures are due out today, New Home Sales on Wednesday, and Personal Incomes and Jobless Claims on Thursday.

Shelter Six:  Wishing You and Yours a Safe and Happy Thanksgiving!

November 19, 2018 by · Leave a Comment 

1. There are signs that the global economy is beginning to slow down.  Last week, both Germany and Japan released 3rd Quarter results indicating weakening economies.

2. The end of the rate hikes may be near.  Some investors are now projecting around four more Fed rate hikes this year and next before rate policy turns neutral.

3. Double good news last week for October as Retail Sales came in stronger than expected and the Core CPI Inflation Index came in as expected.

4. According to, the Plymouth colonists and Wampanoag Indians shared a harvest feast in 1621 that we acknowledge today as the first Thanksgiving.

5. It was not until 1863 during the Civil War, however, that President Abraham Lincoln first proclaimed a national day of Thanksgiving to be held each November.

6. Thanksgiving this year comes on the earliest day possible, November 22.  All of us at Shelter Home Mortgage wish you and your family a safe and Happy Thanksgiving!

Rate Update

Concerns about global economic growth as well as uncertainty around Britain’s exit from the European Union were key factors influencing mortgage rates slightly lower last week.

This Week

Housing Starts will be released on Tuesday with Existing Home Sales and Durable Orders out on Wednesday.  Mortgage markets will be closed on Thursday and close early on Friday.

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