December 6, 2016 –
Last week we had the last big data releases before the Federal Reserve Board’s Open Market Committee meets next week. This data included the first revision of the 3rd Quarter economic growth and personal income and spending. These reports came in on the strong side, with the economic growth revised higher and personal income and spending solid as well. Personal spending for October is especially important, because November is the start of the holiday shopping season. The money made in October certainly affects Black Friday sales.
The most important data was released on Friday, which was November’s jobs report. Nothing affects the economy more than the growth of jobs. Thus far this year, we have had strong, but not explosive jobs growth. Friday’s numbers came in at 178,000 jobs added, and a drop in the unemployment rate to 4.6% from 4.9%. While the headline number was much stronger than expected, the number of jobs created came in near expectations and the previous month was revised down by 20,000 jobs. This means that the lower unemployment rate was at least partially due to a shrinking labor force.
Just as important, wage growth came in at below expectations on a month-to-month basis, but slightly higher than expectations on a yearly basis, which was a mixed bag. Why is wage growth so important? The Fed is looking for any evidence of inflation to buttress their decision on rates. Right now, it is expected that the Fed will raise rates next week, but we don’t know by how much and what might be coming afterwards. This jobs report, taken together with the additional data released this week, certainly gives the Fed enough ammunition to support an increase. However, it is not clear that they have a mandate for anything above the expected 0.25%.
The Markets. Rates continued their post-election climb last week. For the week ending December 1, Freddie Mac announced that 30-year fixed rates rose to 4.08% from 4.03% the week before. The average for 15-year loans increased to 3.34%, and the average for five-year adjustables moved up to 3.15%. A year ago, 30-year fixed rates were at 3.93%, approximately 1/8% lower than today’s levels. Attributed to Sean Becketti, Chief Economist, Freddie Mac — “The 10-year Treasury yield remained flat despite an upward revision to third quarter GDP. The rate on 30-year fixed home loans rose 5 basis points to 4.08 percent, rising a total of 51 basis points in three short weeks. With rates at the highest we’ve seen this year; borrowers are moving more slowly on refinances. The latest Weekly Applications Survey results from the Mortgage Bankers Association show refinance activity down 16 percent week over week.” 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.
Updated December 2, 2016
|Daily Value||Monthly Value|
|6-month Treasury Security||0.60%||0.48%|
|1-year Treasury Security||0.82%||0.66%|
|3-year Treasury Security||1.45%||0.99%|
|5-year Treasury Security||1.90%||1.27%|
|10-year Treasury Security||2.45%||1.76%|
|12-month LIBOR||1.575% (Oct)|
|12-month MTA||0.574% (Oct)|
|11th District Cost of Funds||0.598% (Oct)|
|Prime Rate||3.50% (Dec)|
The Federal Housing Administration (FHA) announced the agency’s new schedule of loan limits, and due to an increase in housing prices, most areas in the country will see an increase in loan limits in 2017. These loan limits are effective for new applications made on or after January 1, 2017, and will remain in effect through the end of the year. In high-cost areas, the FHA national loan limit “ceiling” for one-unit properties will increase to $636,150 from $625,500. FHA will also increase its “floor” to $275,665 from $271,050. Additionally, the maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $636,150. This amount is 150 percent of the national conforming limit of $424,100. Due to changes in housing prices and the resulting change to FHA’s “floor” and “ceiling” limits, the maximum loan limits for forward mortgages increased in 2,948 counties. There were no areas with a decrease in the maximum loan limits for forward mortgages, though they remain unchanged in 286 counties. FHA’s minimum national loan limit “floor” is set at 65 percent of the national conforming loan limit of $424,100. The floor applies to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit. Source: FHA — If you would like to know where the limits moved to in your area, please contact us
For the second consecutive month, existing-home sales were on the rise, ascending above June’s cyclical sales peak to become the highest annualized pace in nearly a decade, the National Association of Realtors® reported. All major regions across the country saw an increase in October. Total existing-home sales – which are completed transactions that include single-family homes, townhomes, condos, and co-ops – increased 2 percent to a seasonally adjusted annual rate of 5.60 million in October. The pace of existing-home sales is 5.9 percent higher than a year ago (5.29 million), rising above June’s pace of 5.57 million. It was the highest sales pace since February 2007. Lawrence Yun, NAR’s chief economist, is calling the sales increase an “autumn revival” for the housing market. “October’s strong sales gain was widespread throughout the country and can be attributed to the release of the unrealized pent-up demand that held back many would-be buyers over the summer because of tight supply,” Yun says. “Buyers are having more success lately despite low inventory and prices that continue to swiftly rise above incomes.” Source: NAR
Your listing photos are designed to spotlight the house in its very best light. But in some cases, your images may do little to be carving out a good impression among home shoppers. Realtor.com® recently rounded up several of the worst real estate listing photo mistakes. Make sure you’re not making any of these faux pas–
- Photographing corners. Taking a picture of one corner of the room shows nothing. Instead, photograph “at least two corners of a room” in your shot to help give a sense of space and the design of the area, says Hannah Walker, vice president of IMOTO Real Estate Photography.
- Odd close-ups. From close-up pictures of ceiling fans to appliances, make sure you’re not abusing the use of the zoom feature. Instead of offering close-ups of the hot water heater and breaker panels, for example, let buyers assess their condition in person or allow their home inspector to. Aim to “photograph the look and flow of the property” rather than zooming in on something, Walker says.
- Darkness. Avoid photographing a home with the drapes closed. Natural light will show the home in its best light. “Open all blinds and curtains to let that natural light into the room,” Walker says.
- Bad bathroom angles. Bathrooms are usually one of the smallest rooms in a home and, therefore, can be one of the most challenging to photograph. Test out shooting from different angles. “Professional equipment, including a wide-angle lens and tripod, will help you capture the small bathroom shots,” Walker says. “Also, if you or the camera get caught by the mirror, edit it out.” Source: Realtor.com®