Mortgage rates
We definitely did a “Step Up” in mortgage rates over the last 30 days, with September being one of the worse months for rates since January. We definitely lost between .25 and .375 in rate in September. Why…
Well most of the month had pretty good economic news, and tariffs have not, as of yet, hurt the economy as some people have predicted. We also started the month out with wage inflation news, which pretty much put traders in a sour mood with regards to overall inflation. Remember inflation is VERY bad for mortgage rates.
In the last couple of days, we have seen a little reprieve in rates, but nothing substantial. The main bump up was on the 09/26 where the Federal Reserve indicate that they raised the Fed Fund rate by .25, and they only expect to raise rates 1 more time this year, which would be December. This caused investors to take cash and drop it into Bonds and Stocks that day. Thus, we have a rare rally in the stock market and the bond market.
October is always a weird month, historically stocks have not done so well in October and October has seen some of the largest Stock Market Crashes. 1st week in October we will have unemployment numbers, which everyone is pretty much ignoring right now, but what will be looked at is Wage Inflation, a KEY number, and what will probably dictate mortgage rates for October.
Couple of items to watch and their affect:
Italy, it seems they can’t get their act together, and today we are seeing issues with they economy, continued chaos there will be positive for our mortgage rates.
Tariffs, the economy has seem to shrug off all of the tariffs, which may embolden Trump to do more. Eventually tariffs will start to be felt at the consumer lever, higher prices = inflation, inflation is bad for mortgage bonds.
We are still in a locking mode, there is really nothing, other than small spikes, that will make interest rates improve. I suspect we will probably see, as the trend lines go, 5.50% on conventional rates by year end, and 5.00% for FHA/VA/RD loans.
Rocket Homes?
Well as Zillow becomes more and more of a powerhouse in buying and selling real estate, other major corporations are also getting into the game.
Quicken announced a couple of weeks ago, that they will now be getting into Real Estate, and have created their own Real Estate company.
They have started by creating Rockethomes.com, to directly compete with Zillow Real Estate company, and of course YOU, the small independent realtor.
To say they have created chaos in my lending world is an understatement. We still kick their butts on rates and fees, and there is still a clientail that needs to be met with face to face, but QL has definitely changed the landscape, and now they will on the Real Estate side, just as Zillow has done.
The next 12 months shall be interesting.
New loan program: Investor Advantage
Well here we go again, yep, all of the goofy loans we saw back in 2008 are back….
One of my lenders announced last week, Investor Advantage loan, this is only for Non-occupied investment properties, and we DO NOT need any tax returns, income docs, paycheck stubs. We solely based the debt to income ratio on the amount of the new mortgage, PITI, vs. the amount of anticipated rent, based on appraisal. If the mortgage is $1100 per month, and the rent/market analysis says they can get $1200 per month, the file is approved.
We can get files approved from a 1 to 1 (rent to mortgage) basis and higher. With as little as 20% down, and loans up to $2.0M.
No reserve requirements, we just need to source and season the down payment.
Now people are going to groan, people are going to complain that we are back to 2008, but when it really comes down to it, it is the right loan for some people.
IHA down payment assistance program:
IHA really has made a pretty good program here, I have attached a flyer link so you can download and see the details. I originally talked about it a few weeks ago in my blog, if you missed that, that link is here.
Top of the market
Ok, I am putting my neck out here a little, but I believe the top of Treasure Valley Housing Market was…wait for it…May 2018.
Based on the data I have seen, home sales, home prices, inventory, and speaking with Realtors and Builders. It seems that May could have been the peak of the market, and we are now trending down towards more of a Buyer’s market, rather than a Seller’s market.
Now, I am not saying that home prices are going to crash, but we are seeing…gulp…price reduction happen more and more, and inventory has been increasing more and more. And I think I saw days on the market increase as well.
So why do I bring this up? Marketing BABY!
Have your brokerage pull the IMLS data, gets some Excel spreadsheets together, and prove me right or wrong, and start canvasing the neighborhood for listings. Tell the potential sellers that May was the peak, and if they have ever wanted to consider selling, giddy up.