Rates
Well after 3+ weeks of rates on a rocket ship ride to 5%, we have had a little calming, as expected. But don’t think rates are going to creep down, this is a temporarily lull for rates. As indicated by the Federal Reserve coming out this week, more below.
Let’s hit up some economic numbers 1st:
-May’s Leading economic indicator, how well the economy is doing 0.7 vs est. of 0.4, so really positive.
-CPI, or inflation at the consumer level, up 0.1% vs est. of 0.2%, still NO inflation.
-Weekly Jobless Claims 267,000 vs est of 276,000, this number is one of the lowest numbers we have had in over 15+ years, showing hiring is strong.
-Housing starts 1.036M vs est. of 1.1M, miss on this number, but still over 1 million new homes started.
-Building permits 1.275M vs est of 1.1M, another HUGE number for building permits for single family residences.
All of these numbers are showing the US economy is chugging along, and the Housing numbers is a good indicatory that builders are feeling the pressure to build more houses and are confident in building those homes.
Rate indicator: Rates are going up!
Federal Reserve met this week, and as expected they did not raise the Fed Funds rate…but…
15 of the 17 Governors on the Federal Reserve Board did indicate that they will raise rates by the end of the year, and it looks like it will start in September with a .25 increase.
And by the end of the year, Talking Heads anticipate FF rate to be at .625%, but end of 2016, rate to be 1.625, and end of 2017 in the 2% range.
IF this pans out, this will put conventional rates in the High 4’s by end of the year, maybe low 5’s, and then into the 6% rage in 2016 to 2017.
This will be good, because it will be a slow progression upwards.
Watch out for Greece, over the next 2 weeks, there will be A LOT of info and comments about Greece. They have to make a 1.2B Euro payment by the end of the month to the International Monterey Fund, and it doesn’t look like they have the money to do so.
Upon their default, which looks like it likely, we should see rates improve, but eventually then it will become a non story and bond traders will focus back on the US economy and it’s growth.
I am still in the locking mode, we have seen some improvements this weeks, but lenders are still pretty much not showing them on the rate sheets.
When Greece defaults, I will go into a floating mode, but I figure that should only last about 2 weeks or so.
CFPB and 8/1/2015 rule and CE Class!
Looks like the CFPB will delay the new Loan Estimator and Closing Disclosure until October 1st, 2015, so we get another 60 days to figure out how life is going to work in the Real Estate World with these new disclosures.
My Idaho Real Estate Commission approved course is going live on June 25, from 10 AM to 12 PM at Idaho Real Estate School, give them a call at 377-4300 to get in on that 1st class.
http://idahorealestateschool.com/
Link Here to sign up: http://idahorealestateschool.com/shop/closing-disclosure-and-loan-estimator-the-new-gfetilhud-1-for-2015-and-beyond/
Then I will also have the class 7/20, 7/30, 8/17 all from 10 AM to 12 PM.
Call the school for now to register, eventually it will be on their calendar.
The cost is $19.00 and it is worth 2 CE credits!
Home prices on the slow down.
Well looks like home prices are starting to simmer a little, we are seeing more and more homes come on the market, which is giving buyers more selection.
In speaking with agents and looking at the contracts coming in, we are seeing less and less homes going for asking price, and concessions are on every contract.
We are seeing builders starting to offer “specials” to bring buyers to the showrooms.
Now this isn’t a bad thing, we have seen double digits appreciation for almost 3 years now, which has caused some people to be taken out of the market for purchasing a home.
With home prices plateauing, it will be nice because we are starting to see wages going up, thus more people will be able to buy again.
Property Tax Assessment & Lead Generator
For the last 30 days, most of your clients have been receiving their property tax assessments in the mail, I got mine about 3 weeks ago.
Wouldn’t it be great to send out a letter or post card, offering to your past clients, a FREE CMA, to see:
1-If the assessment is accurate, some people might be depressed by seeing how low their value has come in, but you can bring joy to their lives by telling them what their actual value is.
2-Some people have seen their assessments skyrocket, wouldn’t it be nice to tell them that their house isn’t worth the assessed value and give them some comps that they can go down to the assessor and protest their value.
Either way, you are making contact with past clients, offering them a thing of value, and getting in front of them and handing out your business card.
Also you can review the HUD-1 that you kept from the transaction and see if they had Conventional Mortgage Insurance, and if they have made 24 payments, and their equity has increased by 25%, you can recommend that they can contact their lender and get that MI removed!
This is one of those marketing/Lead generators that is truly Win/Win.
FHA new rules in September 1st.
And don’t forget, lots of new rules are going into effect on 9/1/2015 with regards to FHA, over the next few months I will be getting more and more training on these and passing along the info.
But one of the biggest rule changes will be Student Loans, before we didn’t have to count student loans if they were in deferment or delayed.
Now we will have to count 2% of the loan amount towards the borrower’s debt. This will significantly reduce the numbers of people who can purchase homes under FHA with student loan debt. As an example, 3 clients in the last 3 months WOULD NOT have purchase a home if they had done so in September.