Real Estate News- SUSAN TURNER

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Numbering just over 75 million, today’s 21- to 37-year-olds—millennials—are the largest generation in US history. They are more tech savvy, more racially and ethnically diverse, more educated, and they marry and have children later in life than previous generations. Although most millennials have now entered peak household formation and homebuying years, they are becoming homeowners later and at lower rates. The Urban Institute's new and extensive Millennial Homeownership report finds the homeownership rate of millennials aged 25 to 34 was 37 percent in 2015, approximately 8 percentage points lower than the homeownership rate of Gen Xers and baby boomers at the same age. If the millenial homeownership rate mirrored previous generations, there would be about 3.4 million more homeowners today. The report examines demographics, lifestyle choices, and external barriers to homeownership to determine which factors have the greatest influence on millennials’ homebuying decisions. Findings show delayed marriage has the most significant impact on millennial homeownership. In addition, increased racial diversity and higher debt levels also play a significant role. Despite the lag, attitudes toward homeownership haven’t changed much and are expected to continue to strengthen as millennials age. Source: The Urban Institute Owning a home makes almost half of Americans feel wealthy in their day-to-day lives, according to the Modern Wealth Index released by Charles Schwab. When Schwab asked a thousand Americans about their personal definitions of wealth in their lives, 49% said they believe saving and investing is the way to achieve wealth over time. However, other things, including homeownership, make them feel wealthy in their day-to-day lives. The survey revealed 49% of Americans feel wealthy when they own a home. However, homeownership was not at the top when Americans defined wealth. Sixty-two percent of the respondents defined wealth as spending time with family, while 55% said wealth means having time to themselves. Owning a home came in third. Americans also said they felt wealth in their daily lives when they eat out or have meals delivered (41%) and when they have subscription services like movie/TV and music streaming (33%). The company also asked respondents to focus just on numbers. Respondents said they believe it takes $1.4 million to be considered financially comfortable, while it takes $2.4 million to be considered truly “wealthy.” Source: Mortgage Professional America The most competitive, tightest housing market in decades may finally be loosening its grip, and it could put pressure on overheated home prices. The supply of homes for sale in the second quarter of 2018, the all-important spring market, rose at three times the rate of the same period in 2017, according to Trulia, a real estate listing and research company.

 

The inventory jump was the largest quarterly improvement in three years and could be signaling a slight thaw in today’s housing market. But it is just a start. “This seasonal inventory jump wasn’t enough to offset the historical year-over-year downward trend that has continued over 14 consecutive quarters,” according to Alexandra Lee, a housing data analyst for Trulia's economics research team. The supply of homes for sale is still down 5.3 percent compared with a year ago. Still, all real estate is local, and some markets are seeing greater relief. Thirty of the nation’s 100 largest cities now have more supply than a year ago. Source: CNBC

The Markets. Rates continued their upward trend in the past week.

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For the week ending August 2, Freddie Mac announced 30-year fixed rates increased to 4.60% from 4.54% the week before. The average for 15-year loans rose to 4.08% and the average for five-year adjustables moved up 3.93%. A year ago, 30-year fixed rates averaged 3.93%. Attributed to Sam Khater, Chief Economist, Freddie Mac: "The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months. 

 

Yesterday, the Federal Reserve passed on raising short-term rates, but with the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in coming months. Even with home price growth easing slightly in some markets, rates hovering near a seven-year high will certainly create affordability challenges for some prospective buyers looking to close." Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

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Well, unbelievably – rates seem to be improving! Check out why – Happy Summer Selling!

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The Commerce Department reported July 27, 2018 United States GDP (gross domestic product -- the broadest measure of goods and services produced in the economy) grew at a 4.1% rate during the second quarter of 2018. Though the numbers were preliminary, the first snapshot of economic growth for the second quarter was quite impressive. It more than made up for a weaker first quarter and surely the Federal Reserve Board's Open Market Committee took note of these numbers when they met last week, especially the jump in prices reported during the quarter.

The strong quarterly data increases the probability of a hike at their September meeting. There will be one more jobs report released and an adjustment in the quarterly growth data before they meet again. Right now, the markets see all systems go for a hike in September unless there is a surprise or two in the interim.

The headline numbers show an increase of 157,000, jobs -- less than expected -- but the previous two months were revised upward. The unemployment rate of 3.9% was down from 4.0%. The increase in labor costs came in at 2.7%, close to the rate of inflation. Apparently, wages are not growing because workers are returning to the work force and worker shortages are only occurring within pockets of the economy. 

Susan Turner- STATE OF THE MARKET July 13

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Friday - July 13,2018   STATE of the MARKET – know your business

·       Stocks, Bonds, and Treasury yields are near unchanged as trading slows on this Friday in summerLocking is recommended in the short-term, 30-days until closing. Longer-term, floating is prudent.

·       Consumer Sentiment edged lower in early July but remains near lofty levels. The continued strength in the index is due in part to favorable job and income prospects. The preliminary July Consumer Sentiment Index came in at 97.1 versus the 97.8 expected and down from 98.2 in June. Looking ahead, there are rising concerns about the potential negative impact of tariffs on the domestic economy. In comparison, in July 2017 the index was at 93.4.

·       Three of the largest banks in the nation reported earnings this morning showing mixed results. JPMorgan Chase reported a record quarterly profit of $8.3 billion, an increase of 18% from the same period last though below first quarter profits of $8.7 billion. Citigroup reported revenues that were below forecasts while earnings per share beat expectations. Wells Fargo reported that revenues and earnings missed expectations.

·       Next week Fed Chair Powell will be on Capitol Hill as he will give his semi-annual testimony on the state of the U.S. economy to Congress on Tuesday and Wednesday. It was formerly known as the Humphrey-Hawkins testimony - a reference to the 1978 law that requires Fed Chairs to deliver testimony twice a year. Mr. Powell’s testimony comes two weeks before the next Federal Open Market Committee meeting on July 31-August 1.

Susan Turner -MARKET AND VOLATILITY OVERVIEW AND PENDING RATE HIKE NEXT WEEK BY FED.

HEAD’S UP – KNOWLEDGE IS POWER – RATE INCREASES PENDING – LONG TERM LOCKS – BUILDERS – DO CONSTRUCTION PERMANENT LOANS. 

Fri, Jun 08 - 4:52 PM ET – MARKET AND VOLATILITY OVERVIEW AND PENDING RATE HIKE NEXT WEEK BY FED.

A WORD FROM THE BOND PITS: **mortgage rates

Mortgage Bonds closed lower in price and a bit wider on spread vs Treasuries ahead ofnext week's risk filled calendar. 

Next week we have the 2-day Fed meeting ending Wednesday with the release of a policy change and the statement. It is expected that the short-term Fed Funds Rate will rise by 0.25%. Consumer and wholesale inflation will be released. The 

Treasury will sell a total of $68B in 3- and 10-yr Notes along with 30-yr Bonds. Have a great weekend!

 

X Factor

The ongoing geopolitical headlines of trade issues, tariffs, and a possible summit between North Korea and the U.S. will continue to impact the markets.

Last week, the markets seesawed on the geopolitical headlines with Stocks up one day, Bond prices up the next, and vice versa.

The Core Logic Home Price Index data on Tuesday may give some insight as to where home prices are moving given anemic housing inventories.

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Susan Turner- May 5, 2018 – Mortgage Market – what is the deal?

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We like our "moments" to be black and white, but our world today is not always that way. What do you see in the mortgage industry? You have customers that hear today's media and what are the headlines? Rates at a new high! (Every week, right?) Prices are up again (every week!) It's out of our control and often, it isn't really the whole story. Where do we find ourselves today? Having to re-educate and un-shock everyone. So here's some ammo we can use. 

Rates are up. Sure, if they remained low, we'd still be in a recession. Good for rates and bad for almost everything else. Prices are rising. Yes, when demand is greater than supply, that happens. But you know what else? The seller is getting more money for their home and that's appreciation. Conservative numbers show around a 6% increase in sales prices over the past 12 months. The truth is that rates are only slightly up and the positives offset the negativesThe Fed has done a great job moderating between growth/full employment and low inflation. Times are still good. If you buy new construction, by the time you get it done, comparable homes might even be selling for more. If you are selling, your buyer may have to pay above what that property would have sold for 6 months ago. It may not fully appraise but if they had a good agent and MLO, they know that and are prepared to move forward or get out of the way so that the others can do it.

Loan performance is excellent. Product availability is not bad. Non-QM and non-Agency is growing, and rates are outstanding unless you'd rather have a recession or depression. The reality of volume is that refinancing is down 30% and purchases up 5%. 

 

Translation – Great market for buyers and sellers of real estate.  Stay informed!

Susan Turner- Mortgage Rate Update 4-2-2018

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Mortgage Interest Rate Myths

This may come as a shock to many borrowers, but it's absolutely true. Mortgage interest rates are not set by the Federal Reserve and, contrary to popular belief, mortgage rates are not directly tied to the yields of US Treasury bills, bonds, or notes – including the 10-year Treasury Note. That's right. Despite what you might hear in the media, mortgage interest rates are actually set by lending institutions, and are based solely on the performance of mortgage-backed securities. 

For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true. The graph on this page, which shows interest rates for 30-year fixed-rate mortgages and the yield for the 10-year Treasury Note for 13 months, clearly demonstrates this fact. 

At a quick glance, yes, it's easy to see why the mistake is made. As you can see, for 11 out of the 13 months recorded in the graph, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting about this graph is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.

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*Rates are subject to change due to market fluctuations and borrower's eligibility. Payment amounts do not include amounts for taxes and insurance. Actual monthly payment could be higher.

For professional use only. Not intended for consumer distribution.
 

In house Bank Products - JUMBO loans to 95% - construction to permanent loans to 95%.

© 2017 Vantage Production, LLC. All rights reserved.

Gray Days to Sunny Days!

In every way, know your business, and be the best!   Here is a couple of good indicators of rates and the environment, and, what to watch for when trying to forecast rates and the market for your Customers! of knowledge, good for you to know and be aware of regarding the impact of the changes and volatility happening in our Financial World. 

 As always, here to serve, call me anytime or email.

 

SUSAN TURNER

NMLS #783571     

CELL #301-651-2174

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TODAY'S Mortgages - Rates - Latest and Greatest updates -BEST IN HOUSE BANK PRODUCTS AND 95% CONST. PERM LENDING ANYWHERE

BE A COMPETITOR!   THE BEST!

Advise Your Clients: Locking, 3% 10-year yield appears bound for test

Current Price of FNMA 4% Bond: $102.62, -9bp

Despite Stocks entering correction territory, which means a 10%+ decline

from the highs, Bond yields are hitting highs last seen in early 2014.

This morning, Mortgage Bonds are lower again, stepping lower on the

grueling down escalator.

Stocks are opening higher after the Dow lost 1,000 points yesterday. The

specter of higher interest rates, inflation pressures, rising budget deficits,

and a very overbought and complacent Stock market set the stage for this

incredible market volatility and fast slide lower.

The government briefly shutdown overnight but has reopened after the

House approved a spending bill that will fund the government until March

23. President Trump will sign the bill into law today.

The 10-year yield is at 2.86%, a four-year high and appears destined to test

psychological resistance at 3%.

Looking at the fundamentals (news items) and technicals (volatility and

down escalator), we see no reason to float right now.

Have a great weekend!

Note: The Monthly Bond Rollover will take place this Monday.

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This day in financial history July 31st- Susan Turner Mortgage

On this day in 1790, the infant government of the United States issued its first patent.  It was to one Samuel Hopkins a citizen of Vermont.  He patented a process to produce potash fertilizer.  His patent was signed by a "G. Washington and T. Jefferson."  Within twelve years so many Americans had come up with patentable ideas that, to have time to run the government, the president opened a patent office.

 

Twenty-one years later American "know-how" had filed over 9,000 patents and the head of the Patent Office tendered his resignation, saying certainly everything that possibly could be invented had been invented already.  He missed his mark a touch - by the time JFK was inaugurated another three million inventions had been patented.

 

To celebrate toast a civil servant who wanted to shut things down when the work was done (even if he was 162 years too early).  As to what you should drink - be creative but remember to build on the shoulders of genius (an olive or a twist can cut the acidity of the ice).

 

The stock market continued to look like it was patented by Rube Goldberg.  (In case you are under 50 or are perhaps an MBA, Rube Goldberg was a famous cartoonist whose cartoons featured amazingly complex and complicated devices to do simple tasks.  They usually included a marble that hit a mousetrap that snapped, pulling a string which moved a lever to....but....as they guy who paints Astroturf says - "I digress".)

The markets on Friday were not quite as complex as a Rube Goldberg contraption but they did display some complicated divergences.

 

The Amazon Effect Lingers And Taints Other Superstars – Stocks opened generally lower helped by the hangover of the negative earnings shock from Amazon, Thursday night.    Lowered future forecasts dinged superstars like Starbucks and Goodyear by nearly 10 percent.

 

Initially, the FANG related reassessment did the most damage to the Nasdaq and the S&P.

 

In mid-morning, the Dow got a body blow as the FDA announced plans to remove most or all of the nicotine from U.S. cigarettes.  That put tobacco into a quick tailspin, which took the Dow to the day's lows at mid-morning.

The Dow managed to regroup rather quickly.  It began to climb toward neutral territory despite another ICBM test launch by North Korea. I noted that incongruity in a brief email to some friends.

 

Some traders surprised at so little reaction to North Korea missile launch. Particularly after China's recent troop movements near the border and with White House in further disarray.

sorry this POST:

 

THIS DAY IN HISTORY

 

 7/31/2017

July

31

2017

On this day in 1790, the infant government of the United States issued its first patent.  It was to one Samuel Hopkins a citizen of Vermont.  He patented a process to produce potash fertilizer.  His patent was signed by a "G. Washington and T. Jefferson."  Within twelve years so many Americans had come up with patentable ideas that, to have time to run the government, the president opened a patent office.

 

Twenty-one years later American "know-how" had filed over 9,000 patents and the head of the Patent Office tendered his resignation, saying certainly everything that possibly could be invented had been invented already.  He missed his mark a touch - by the time JFK was inaugurated another three million inventions had been patented.

 

To celebrate toast a civil servant who wanted to shut things down when the work was done (even if he was 162 years too early).  As to what you should drink - be creative but remember to build on the shoulders of genius (an olive or a twist can cut the acidity of the ice).

 

The stock market continued to look like it was patented by Rube Goldberg.  (In case you are under 50 or are perhaps an MBA, Rube Goldberg was a famous cartoonist whose cartoons featured amazingly complex and complicated devices to do simple tasks.  They usually included a marble that hit a mousetrap that snapped, pulling a string which moved a lever to....but....as they guy who paints Astroturf says - "I digress".)

 

The markets on Friday were not quite as complex as a Rube Goldberg contraption but they did display some complicated divergences.

 

The Amazon Effect Lingers And Taints Other Superstars – Stocks opened generally lower helped by the hangover of the negative earnings shock from Amazon, Thursday night.    Lowered future forecasts dinged superstars like Starbucks and Goodyear by nearly 10 percent.

 

Initially, the FANG related reassessment did the most damage to the Nasdaq and the S&P.

 

In mid-morning, the Dow got a body blow as the FDA announced plans to remove most or all of the nicotine from U.S. cigarettes.  That put tobacco into a quick tailspin, which took the Dow to the day's lows at mid-morning.

The Dow managed to regroup rather quickly.  It began to climb toward neutral territory despite another ICBM test launch by North Korea. I noted that incongruity in a brief email to some friends.

 

Some traders surprised at so little reaction to North Korea missile launch. Particularly after China's recent troop movements near the border and with White House in further disarray.

 

Interestingly, there was an absolute flurry of political commentary throughout the trading day.  While it consumed the media and some trading desk exchanges, it seemed to have no discernible impact on trading or prices.

 

The Dow inched higher throughout the afternoon and managed to close with a credible gain at yet another new closing record.  The S&P and Nasdaq closed with moderate losses.  The yield on the ten years inched down slightly.

 

A few traders noted a bit of an anomaly with energy as crude rose again but the energy companies faltered.  They chalked it up to the Exxon-Mobile results. 

 

 

This day in financial history July 14th- Susan Turner Mortgage

On this day in 1850, a doctor at the "Mansion House" in Apalachicola, Florida amazed some guests whom he had invited by serving them drinks with ice.  They were amazed not because it was a dry town…..it was not....the guests were amazed because this was Apalachicola, this was Florida, this was July…..yet here was ice.  How deep could his icehouse go…..how many feet of sawdust had he needed to pile up to save these few cubes of ice?

Then the doctor (Dr. John Gorrie) further amazed his guests by bringing more ice…..he brought out whole brick-like blocks of it.  The guests were stunned.  How had he managed to save this much ice…..in Florida…..into July!  Dr. Gorrie laughed and told them he had made the ice only yesterday.  "Sure!” they said.  "You made ice in July?"  "Who the hell are you…..Mother Nature with a bad calendar watch?"

 

Dr. Gorrie must have laughed again and told them he had found a way of compressing water and then air in a way to chill things enough to produce ice.  "Wow!" said the guests "Now you can open a bar!"  Dr. Gorrie looked at them strangely….."Bar?…..This is a cure for malaria!"

 

Dr. Gorrie had noticed that malaria (a big problem in 1850) seemed to happen near wetlands (like Apalachicola) when it was warm.  So he determined it must be the hot air that caused malaria.  So, if you cooled the hot air down…..you should be able to stop malaria.  That night Gorrie raised enough funds to install his ice-making, anti-malaria machine at the United States Marine Hospital.  The main effect was that the rooms were cooler and the patients were cooler but the "yellow fever" continued. (It would be a half century later until Walter Reed would prove that the cause was mosquitoes who thrived in the hot weather…..not the weather itself.)

Although Dr. Gorrie was disappointed at what he saw as his "failure", bartenders and patrons did find a medicinal use for the ice. To celebrate…..call Clarence Birdseye and point out how one man's failure can be another man's fortune.  Forgive the frosty response.

 

There was no sign of a chill in the U.S. stock market, Thursday.  The Dow managed yet another record closing high.  I think that makes something like the 24th record closing high of this year – yet the bulls are throwing no champagne parties.  Skepticism lurks just below the surface.

 

A New Record In Three Acts – The market action was definitely tri-polar on Thursday as we saw three distinct moves in response to three distinct stimuli.

There was a rally on the opening primarily based on the hope that Janet might bring another box of candy to her Senate appearance.

 

By mid-morning, it was evident that Chair Yellen was offering nothing new and stocks drifted down to what would be the low trading point of the day.

The market's focus then shifted to the crude pits.  Crude had been weak earlier, threatening to break below $45.  In late morning it reversed sharply, spiking above $46.

 

That oil spike was the basis for a late morning rally in stocks which would last into late afternoon.  I noted this evolving shift in a midday email to some friends:

 

    Late morning bounce in stocks appears to be a response to crude punching above $46 after nearly falling below $45 in early morning.

    Yellen puts little new on the table and the yield on ten year rises amid lots of talk of Draghi going hawkish.  I strongly doubt that.

 

In the final 90 minutes, the crude based rally began to fade slightly.  Just then it was announced that the Republicans had drafted a new version of a healthcare bill.  The early comment was that this version was not necessarily dead on arrival as earlier versions had been.

While a healthcare bill is not necessarily bullish for the market, the signs of mild progress on this one helped put a bid under the market.

 

The feeling was that if they could even get "close" to a healthcare bill, it hinted the chance of a tax bill was greatly advanced.  That assumption prompted a final hour bounce in stocks.

 

They came off the highs in the closing minutes in front of indications that there could be up to a billion dollars to sell on the bell.  In the end it turned out to be only $300 million so the damage was slight.

 

Despite the Dow reaching a new record, the markets traded in a very narrow band, which is exemplified by advances and declines being relatively equal.  Nevertheless, a record is a record.

 

A Vague Warning From A Friend Sparks A Trip Down Memory Lane – A friend called out of the blue, and said "I'm told you should be very careful around July 20th and 21st."  "Careful of what?", I asked.  "I don't know, exactly but this guy, who's very good with cycles, said that you need to be very careful around those two days", he replied.

I asked what kind of cycle the call was based on.  My friend said this was based on the position of the planets.  I asked if the friend's friend was an astrologer.  "No", he replied, "this is based on a heliocentric chart."  That's when the light went on – John H. Nelson.

 

Back in the 1950's John H. Nelson worked for RCA as a radio propagation analyst.  That meant he had to determine on a given day whether the earth's atmosphere was conducive to send a signal direct from, say, New York to London.  If the atmosphere was animated, what alternate route might work?

 

When he began, Nelson (and the world) thought the primary influences on the condition of the atmosphere were sunspots and solar flares which could change the ionization levels in the atmosphere.

 

Over the decades, Nelson determined that planetary positions, particularly at certain angles corresponded with changes in solar activity.  (Think of it as a tidal-like influence.)

Soon Nelson's work was drawing the attention of Wall Streeters like Joe Granville and Arch Crawford.  Part of the fascination came from the concept that increases in positive ionization is a negative mood alterer.  (Google - Santa Ana Winds or Khamsin.)

 

Granville got further caught up in the theory when he noticed that these solar activity spikes often coincided with earthquakeson this planet and he began to predict earthquakes rather than the stock market.

 

At any rate, I'll send my friend back to try to get more data on the 21st.  In the meanwhile, I'll try to get a copy of "The American Ephemeris and Nautical Almanac" to see if I can figure out what one of Nelson's angles may pop up.

 

Overnight And Overseas – In Asia, most markets saw minor gains except India who had a slight loss.  In Europe, London was down on more Brexit chatter.  Markets on the continent were mixed with very minor changes.  In other assets, crude it up yet again and holding above $46.  Gold is seeing a mild bounce and the euro is firming against the dollar.  Yields are down a tick.

 

Consensus – We get the bank earnings, so financials will be center stage.  We'll also see retail sales and inflation data.  Traders think it may be a consolidation day going into expiration week.  Stick with the drill – stay wary, alert and very, very mild.  Have a wonderful weekend!

 

Trivia Corner

 

Answer - The phrase, "First in war, first in peace, and first in the hearts of his countrymen" was spoken at the funeral of George Washington.

 

Today's Question - These are Mary's math test scores: 98, 87, 82, 95, 93, 81, 100. What is the average?