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.

Shelter Six: Homeownership Rates Continue to Surge

November 12, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve held off on raising short-term rates at last week’s policy meeting but left the door open for another rate hike in December.

2. October’s Producer Price Index came in a good bit higher than expected and was 2.9% higher than a year ago. Higher inflation is never good for rates.

3. Homeownership rates continue to surge evidenced by 1.5M more households formed in the 3rd Quarter compared to a year ago.

4. The pace of the number of new households formed is on track for the best year since 2004.

5. The 35 and under age group is leading the charge with a homeownership rate of 36.8% in the 3rd Quarter, the highest level in five years.

6. With a strong economy and the millennial generation hitting peak housing demand age, housing demand should be strong for years to come.


Rate Update

Reaction to the inflation data, the Fed meeting, and the midterm election results was minimal, and mortgage rates ended the week with little change.


This Week

The Consumer Price Index (CPI) will come out on Wednesday and Retail Sales on Thursday. The mortgage markets will be closed today in observance of Veterans Day.

Shelter Six:  The Economy Added 250K Jobs in October

November 5, 2018 by · Leave a Comment 

1. The strong economy just keeps rolling along as evidenced by Friday’s Employment Report, which showed the economy adding 250K jobs in October!

2. The U.S. has now averaged 211K new jobs per month over the past year, while Unemployment has dropped to only 3.7%, the lowest level since 1969.

3. Average Hourly Earnings are also finally rising and were 3.1% higher than a year ago, the largest annual rate of increase since 2009.

4. A real strong economy often leads to high inflation, but key inflation data released last week showed inflation holding steady right at the Fed’s stated target level of 2%.

5. Fed Chair Powell thinks that the country could be at a “unique” time in its history with a “remarkably positive outlook” and that he expects unemployment to remain below 4% and inflation around 2% through the end of 2020.

6. Goldman Sachs economists were also upbeat adding there is not much sign of recession in the next three years and giving only a 36% chance of recession during that time.

Rate Update

The strong employment report influenced rates higher last week.  Look for rates to stay above 5% or go higher unless there is surprisingly weak economic data, a big downturn in stocks, or an unexpected headline that implies big economic risks.

This Week

The ISM National Services Index is due out on Monday and the JOLTS report on Tuesday.  The Fed meets again on Thursday but no change in rates is expected.

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.’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.

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