

Last week’s meeting of the Federal Reserve Board’s Open Market Committee was not so much about what they would do when they met. It was more about what they would say about the future. The two topics of interest were future interest rate hikes and selling off their stockpile of assets, which is comprised of bonds and home loans. Obviously, both of these topics might affect the direction of rates and are subject to change based upon the direction of the economy and any intervening factors.
The Fed does not meet again until September and that leaves more time to access the state of the economy. This week we have the first major data release since the meeting. The July jobs numbers are all important with regard to their decision-making process and we will also have the August jobs numbers released before they meet again. The preliminary growth estimate for the second quarter was released last Friday and these numbers will be revised at the end of this month.
Of course, we can’t predict what intervening factors might arise. In the past, we have had major world-wide economic, political and weather events which have affected the markets. And we certainly are not trying to predict the occurrence of a particular event. Whatever the Fed said, we are just pointing out that their statements are subject to change as the summer comes to a close in the next several weeks.

July 28, 2017
Daily Value | Monthly Value | |
July 27 | June | |
6-month Treasury Security | 1.13% | 1.11% |
1-year Treasury Security | 1.22% | 1.20% |
3-year Treasury Security | 1.52% | 1.49% |
5-year Treasury Security | 1.84% | 1.77% |
10-year Treasury Security | 2.32% | 2.19% |
12-month LIBOR | 1.738% (June) | |
12-month MTA | 0.830% (June) | |
11th District Cost of Funds | 0.648% (May) | |
Prime Rate | 4.25% (June) |


About 23 percent of residential homes built for one to four families are now owned by investors, according to a study recently released by REAL Trends, Inc., and NEXZUS Publishing Group. The vast majority of those homes are not owned by institutional investors but rather individual investors or small investment groups. The Iceberg Report outlines the size of the single-family residential market, as well as uncovers trends in terms of demographics, attitudes, and behaviors of owners of single-family investment homes. It specifically looks at investor-owned houses and mobile homes, which total between 23 million and 24 million nationwide. The study found that institutional owners actually own fewer than 400,000 single-family residential homes, while nearly 8 million non-institutional investors own the rest. Most use a property management firm once they’ve accumulated more than four units. Additionally, the majority of single-family home investors use a real estate professional to help buy and sell properties. “The Iceberg Report confirms what we suspected,” says Steve Murray, president of REAL Trends. “More successful investors rely on professional real estate agents and leading property managers to help them find, manage, and profit from an increasingly mainstream asset: the standalone single-family residential house.” Source: RealTrends
A new consumer spending analysis from the National Association of Home Builders (NAHB) highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects – 2.6 times as much as other home owners in a typical year. NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes. “While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas. “It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said. During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner. Source: NAHB