Rates
Rates gained another .125 of a point this week, mainly on good economic news and lack of news out of Europe.
Some US Numbers:
-Home builder index 55 vs est. of 58, still above 50, positive.
-Housing starts 1.065m vs est. of 1.07M, close enough to be positive.
-Inflation numbers came out, ZIP on the inflation.
-Fed Minutes released, no new info but it might be about wage inflation, see below.
-Weekly Jobless claims 283K vs. est. of 295K, again below that magical 300K
Most of the talking heads all had the same consensus on Wednesday, that the Federal Reserve will start raising rates, this year, but are really looking at Wage Inflation, or an increase in hourly wages, not due to wages going up from new laws, i.e. minimum wage increases.
The Fed feels that this is the last item that needs to start happening in order for the economy to really kick it in. Wages going up means that there is a shortage of employable workers, and wage increases will put more liquid money in the pockets of workers so they can spend more, God forbid we save, right.
There have been some instances of wage inflation, but not enough for the Fed to take notice. Well that was up until Thursday, when Wal-Mart indicated that they will now pay all of their employees $9.00 per hour starting this month, and minimum $10 per hour starting next year. This is an increase, in some cases of $1.75 per hour! WAGE INFLATION.
And since Wal-Mart is doing this, more and more retailers will also be following suit. Now don’t think Wal-Mart is doing this to “Just Be Nice” and that they fell “sorry” for the lower waged people. That is NOT the reason.
Wal-Mart is having a very difficult time finding hirable people for their stores at lower wages. Quality of employees is directly related to wages; take it from me, I hired 1000’s of retail employees.
So what is Macy’s going to do if they start losing their employees to Wal-Mart because Macy’s only pays their employees $8.75 per hour, they are going to raise their wages as well, and so the ball starts rolling.
Investors are REALLY going to focus on the next 2 Jobs numbers, March and April.
I am still in a lock them as soon as you can mode, as always the wild card in this is the EU, and today as of 12:00 PM, it looks like Greece has a plan in place and will avoid default, but that could change any minute.
Lending Estimate and Closing Disclosures
Did I mention the end of time is going to happen on August 1st!
I received some more training yesterday, and more is coming out each week with regard to the new LE and CD, which go into effect on 8/1/2015. And although the world isn’t going to come to the end, it will have a SIGNIFICANT impact on lenders, title companies and Realtors do business.
The link below was release earlier this week from NAR, it is a good video. Moral of the story is:
1-45 day escrows
2-NOTHING can be changed, locks, extensions, seller concession, dates, once the CD is released.
3-More info is coming!!!
Link below is to NAR video: http://speakingofrealestate.blogs.realtor.org/2015/02/17/understand-the-aug-1-changes-to-hud-1-closing-process/
Lead Generator
Well last week I challenged all of you to hand out 500 business cards in the next 30 days, how are you doing?
How many did you hand out to Wal-Mart employees???
Here is some numbers to think about:
1-The average Wal-Mart has 200 employees.
2-60% of those are full time (120 employees)
3-Average full time employee gets 37 hours per week.
4-37 hours x 52 weeks x $10.00 = $19,240.00
Ok, so $19K per year doesn’t seem like a whole bunch, but that is $1603 per month. The average DTI for FHA loan is 43%, so that mean they could afford a $689/month mortgage payment.
$689 mortgage payment roughly equates to a $114,000 loan amount!
Now we are making some assumptions, they don’t have any other debt, and there isn’t any other income say from a spouse.
So next time you finally find someone in Wal-Mart to help you, don’t look at them as an employee, look at them as a Home Owner!
And if you are think, how in the heck can some like that save up for a down payment, well shame on your for not know about all the down payment and 100% financing available!!
Downpayment Assistance: http://www.375loan.com/loan_products/downpayment_assistance/
100% RD Program: http://www.375loan.com/loan_products/rd_home_loan/
100% VA Program: http://www.375loan.com/loan_products/va_home_loans/
100% IHA Program: http://www.375loan.com/loan_products/idaho_housing__home_loans/
Happy fishing at Wal-Mart!!
Oh, what about other retailers (Stats from Glassdoor.com):
Average wage at:
Costco: $15.82
Target: $9.06 (but I am sure they are going to up this)
Fed Meyer: $11.16
Albertsons: $12.75
Best Buy: $10.46