Rates
Well it has been another week or wild rides, but for the most part, after last week’s raise in rate, rates softened a little, bringing them down to near record levels.
Most of the news this week focused around two areas, the EU and Greece.
Before we go into that mess, let’s look at US numbers:
-Housing Starts 1.089M vs est. of 1.040, good number, looks like builders are expecting a BOOMING spring.
-Building Permits 1.032 vs est. of 1.058, lower than expected, but really inline because builders should have their permits already if they want to be ready for spring.
-Jobless claims, up above 300K for the 2nd week, at 307,000. As I said in past blogs I suspect this will start creeping up as more and more oil workers get laid off from the falling oil prices.
-Existing Home Sales 5.04M vs est. of 5.05M, inline and a HUGE number.
Other than Jobless claims, all really good numbers, but we are seeing some plateauing affect in house, as we are at a peak and there are fewer and fewer people eligible to buy homes.
What is meant by that, well as home prices increase, it puts prices out of reach for more and more people. You can see it right here in the Treasure Valley, homebuilders are ever increasing prices, just try to find a decent home in Boise for <$130K.
That and we are seeing stagnate wage increases are putting more and more homes out of reach for the first time home buyer.
I suspect we will start to see a plateau of home prices, this spring, and I suspect we will see builders drop prices.
Now on to Greece and the EU.
The European Central Bank this week brought out a QE program, where as they are going to buy countries bond’s to try and ramp up their economies. Somewhere in the tune of $1 Trillion.
This is expected to drive up the price of bonds and thus drive down the Yields of bonds.
How is this going to affect us, well if you can invest $100 in a German Bund (bond) and it pay you .50% (Yield) for 10 year, or you can invest $100 in a US Bond and it pays you 1.80% (Yield) for 10 years where would you invest your money. Well in the US, thus more people will be buying US bonds, which then causes our Yield to decrease also, thus driving down rates further.
Now it is a little more complex than that, because you have to take into effect the exchange rate between the Euro and the US Dollar, but you get the picture.
Greece
Well our friend in Greece are back in the picture, if you remember the PIIGS from a year ago, these countries were on the verge of collapse, then the EU came in and bailed them out, but the bailout came with lots of conditions and restrictions.
Well on the 25th, Greece is expected to elect a new Prime Minster, who is expected to give the middle finger to the EU and potentially default on that bail out. This would cause them to exit the EU.
Very significant to watch, if this does happen, we can expect rate to fall.
We anticipate well guess that rates are going to continue to stay the same or even fall a little over the next month, right now I am in a neutral stance, maybe hedging a little to floating for better rates.
FHA & Solar
FHA came out about a week ago and indicated that they will not allow a loan on a home that is “off the grid” i.e. totally dependent on Solar Power or Wind Power or not hooked up to the power grid. They will also not allow a home with a power purchase agreement, which means the homeowner is selling excess power to the power company.
Haven’t had any in Idaho turn up yet, but as solar gets more and more popular, especially in outlying area, this might come up.
Fannie and Freddie
Both the GSE updated guidelines with regards to business returns, making it tougher for people who file business returns to get loans. The GSE indicated that there was too much subjectivity in how income was being calculated and they cleared it up.
Wells Fargo Kick Back Scheme
Looks like 100+ loan officer are in a whole heap of trouble, and Wells Fargo is going to be paying lots of $$$$.
Wells Fargo employees were being paid, cash in some cases, for sending loans to a specific title company. They were also getting gifts.
Link to article here: http://www.mortgagenewsdaily.com/01222015_cfpb_enforcement.asp
It is a very good read!
But word to the wise, if a title company is giving you more than $10 in office supplies (pens, pads, post-it notes) or are taking you out to lunch A LOT, you better be looking over your shoulder, the CFPB is watching and the fines could be HUGE!!
Lead Generator: Rebranding
Do you have the same business cards you had back in the 80’s?
Is your web site Tablet or Smart Phone effective?
Is your picture on your cards or web site from your High School Picture?
It is time of the year to re-evaluate all of your marketing materials and update them. Get a new picture, go to JCP and have them take a new one, it is CHEAP!
Also, lately I have seen some VERY old picture of people, and they DO NOT look like that anymore.
Also web sites should be able to re-size on any smartphone or tablet. How do you know, well look at your web site on a smart phone, if you have to use side to side scrolling, it is probably not enabled.
58% of my traffic last month came from Smartphones and 12% came from tablets, that means only 30% came from a computer.