April 25, 2017 –
Congress is back in session. Not that we are 100% sure that anyone missed them, but certainly there is some unfinished business on the table. For the past few weeks, international news has dominated the markets. Syria, Afghanistan, North Korea and Russia have led this domination, and certainly these world conflicts have influenced the markets — including stocks, bonds, energy prices and the price of gold.
This is not to say that domestic issues have fallen off the map, but when Congress is not in town, there will not be news of legislative progress or failures in the headlines. Now that Congress is back, there will be issues that need to be addressed on the domestic side, in addition to Congressional activity on international issues. One domestic issue hits this very week. This Friday, the stopgap funding bill for the operation of the Federal Government expires. Could we see a government shutdown?
Most political analysts predict that a shutdown will not take place. However, it is normal for the agreement to come at the last possible hour. And international issues may complicate the agreement with budget requests in place to increase defense spending with a lack of immediate corresponding cuts in domestic programs. While these issues are usually resolved before the government is shut down for anything but a minimal length of time, there is the potential for fireworks and saber-rattling. And if the government does shut down for a few days, could next week’s meeting of the Federal Reserve Board’s Open Market Committee be delayed? Always an interesting time in Washington.
The Markets. Rates on 30-year fixed loans fell below the 4.0% mark this past week for the first time this year. For the week ending April 20, Freddie Mac announced that 30-year fixed rates fell to 3.97% from 4.08% the week before. The average for 15-year loans decreased to 3.23%, and the average for five-year adjustables moved down to 3.10%. A year ago, 30-year fixed rates averaged 3.59%. Attributed to Sean Becketti, chief economist, Freddie Mac — “The rate on 30-year loans fell 11 basis points this week to 3.97%, dropping below the psychologically-important 4.0% level for the first time since November. Weak economic data and growing international tensions are driving investors out of riskier sectors and into Treasury securities. This shift in investment sentiment has propelled rates lower.” 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 April 21, 2017
|Daily Value||Monthly Value|
|6-month Treasury Security||0.93%||0.89%|
|1-year Treasury Security||1.01%||1.01%|
|3-year Treasury Security||1.41%||1.59%|
|5-year Treasury Security||1.78%||2.01%|
|10-year Treasury Security||2.24%||2.48%|
|12-month LIBOR||1.790% (Mar)|
|12-month MTA||0.692% (Mar)|
|11th District Cost of Funds||0.591% (Feb)|
|Prime Rate||4.00% (Dec)|
When is your “credit score” irrelevant in buying a house or refinancing a home loan? A new federal legal settlement with a major credit bureau has the answer: The only score that matters is the one your lender uses to evaluate you, not some random score you got on a website. All the others you might buy or see — there are dozens of them hawked on the Internet — may be interesting, but they won’t affect the interest rates you’re quoted, the fees you’re charged or whether your application gets approved or rejected. The new legal settlement from the Consumer Financial Protection Bureau alleges that Experian, one of the big three credit reporting bureaus, “deceptively marketed credit scores to consumers by misrepresenting” them as “the same” as what their lender would use in determining whether and on what terms to offer them a loan. Experian’s promotions appeared on third-party websites, banner and display ads, direct mailings and sites such as AnnualCreditReport.com. Which brings us back to home loans. If you’re like many home buyers and owners, you’ve seen online pitches and ordered your scores, often free. They may have come with tie-ins to credit card offers or credit monitoring and identity theft protection services. One site may have said your score is 788, ranking you as “excellent” on their scale. Then you apply to a lender for a preapproval and get the sobering news: Your middle FICO score — lenders usually pull scores from all three bureaus — is a 716, and that’s what we’ve got to use to price your loan. The score is okay, but it’s 85 points below where you thought you were, and below the cutoff point for the best interest rates and terms. The FICO score your lender pulls for your application may not be the same as the score your credit card company might be sending you every month online. Or, perplexingly, it might even be different from the FICO score you get on MyFICO.com. That’s because FICO has introduced multiple models over the years, each with what the company describes as consumer-friendly improvements. The latest is FICO 9. The most widely used is FICO 8. The bottom line? Never depend on generic scores available online as part of your home financing planning process. Source: Ken Harney, The Nation’s Housing
Single women are re-emerging in real estate, with numbers growing in proportion to the rest of the market. The number of single female buyers has been on the rise since 1981, increasing from 11 percent to 22 percent during the market’s peak in 2006, according to data from the National Association of Realtors®. Seventeen percent of home buyers today are single women. That number is expected to grow in the coming years. “They don’t fear buying a home and are not waiting to be in a relationship to qualify for a home loan,” says Elizabeth Weintraub, broker-associate at Lyon Real Estate in Sacramento, Calif. Single men, on the other hand, are purchasing homes at far lower rates, even with their higher earnings. Single men have accounted for about 7 percent of home buyers in 2016, according to NAR data. Single female home buyers tend to be older than both single men and married couples who are buying homes, surveys show. Single female buyers, on average, are typically looking for a 1,500-square-foot home with three bedrooms and two bathrooms, says Jessica Lautz, NAR’s manager of member and consumer reach. About half are looking to buy in urban centers, while the remainder want to buy in rural areas or small towns. The median age for a single female buyer is 50 (single male buyers’ median age is 47 and the median age for a married couple buyer is 44). The decline in the U.S. marriage rate is expected to result in an increase in single female and single male home buyers in the coming years. (The marriage rate has fallen from 8.2 per 1,000 people in 2000 to 6.9 per 1,000 people in 2014.) “I expect single women buyers to continue to be a force in the market,” Lautz says. Source: Realtor® Magazine Online
A record number of Americans are living in multigenerational households according to new analysis by Pew Research Center. Based on 2014 figures, the data shows that 60.6 million people (19 per cent of the US population) live in households with at least two adult generations, or one that includes grandparents and grandchildren. The number of multigenerational households is increasing among all age groups, men and women, and nearly all racial groups. This kind of living was at its lowest in 1980 (12 per cent of the population) but is now nearing its record high of the 1950’s (21 per cent). Pew says that some of the growth in these households can be explained by growing racial and ethnic diversity where multigenerational living is more common. Source: MPA