

Last week we spoke about the Dog Days of Summer when things are expected to be quiet. On the other hand, we also indicated that the world does not take vacation in August and unexpected events can have a greater affect upon the markets when so many are on vacation. And so it is with regard to the North Korean situation. Thankfully, thus far this is not an event, but a heightened course of saber rattling threatening all sorts of things.
Of course, we were all hopeful there would be no event, and that the sabers would quiet down. But we have seen more volatility in the markets as a result of all of the noise. And the events in Europe late last week just added to the consternation. Even so, the drop in stocks has been miniscule as compared to the rally we have witnessed over the past nine months. Even without these events, one would be quite surprised if there are not more mini-corrections in store for the markets because of how far they have moved to the upside.
Another area affected by the noise is interest rates. It is hard to tell whether the recent moderate drop in long-term rates is due to a flight to safety in anticipation of a possible crisis, or a reaction to the news that the economy continues to grow along with reports that are showing inflation continues to be contained. With the markets, we never know why they move, and in this case the easing of long-term rates could be a result of several factors. The move could also be quite temporary. Thus, if you are house or car shopping, you may only have a small window of opportunity.

August 18, 2017
Daily Value | Monthly Value | |
August 17 | July | |
6-month Treasury Security | 1.11% | 1.13% |
1-year Treasury Security | 1.24% | 1.22% |
3-year Treasury Security | 1.46% | 1.54% |
5-year Treasury Security | 1.76% | 1.87% |
10-year Treasury Security | 2.19% | 2.32% |
12-month LIBOR | 1.727% (July) | |
12-month MTA | 0.889% (July) | |
11th District Cost of Funds | 0.657% (June) | |
Prime Rate | 4.25% (June) |


The majority of Americans and Canadians say their nations are not doing enough to address and solve affordable housing needs, according to the Habitat for Humanity’s Affordable Housing Survey. “In many ways, housing is an invisible crisis,” says Jonathan Reckford, CEO of Habitat for Humanity International. “There are still too many families without access to safe, secure, and affordable housing. This survey highlights the value all of us place on a decent place to call home and underscores the critical need to increase access to affordable housing.” According to the survey, nine out of 10 Americans say owning a home is one of their greatest achievements in life. Also, 68 percent of U.S. renters say owning a home is one of their chief goals, according to the survey. PSB, on behalf of Habitat for Humanity, surveyed 1,000 people in the U.S. and Canada to gauge their perceptions of, and challenges to, affordable housing. Ninety-one percent of American homeowners credited owning a home with making them more responsible, and 44 percent said it helped them build a nest egg. Forty-one percent say homeownership has given them stability. But homeownership remains out of reach for many. Nine out of 10 Americans and Canadians say it’s important to find solutions to the lack of affordable housing. One major barrier to homeownership cited among survey respondents: the high costs of rent. Eighty-four percent of survey respondents said the high cost of rent was preventing them from buying. Source: Habitat for Humanity
It is more cost effective for a renter to renew a lease than to move to a new rental unit, according to a new data analysis from Zillow. In a number-crunch of 2015 U.S. Census Bureau data, Zillow determined that those who moved in the past year paid an average of $3,946 more in 2015 on rent than renters who stayed in the same unit for the past five or more years. Although rents have been on the rise across the country, Zillow noted that market rate rents—those that are advertised for new renters—increased by 5.6 percent from 2014 to 2015, compared to the 3.6 percent increase for renewed leases. “Renters have a decision to make almost every year: do they stay in the same place, or should they look for a new unit,” said Zillow Chief Economist Svenja Gudell. “With the country in the middle of an affordability crisis, it’s important for renters to understand how much they can save if they renew their lease instead of finding a new rental. Nationally, rental rates have slowed and the savings from renewing are not as significant for renters today. However, in some of the hottest rental markets, where rents are still rising aggressively, continually renewing a lease can mean saving thousands of dollars.”Source: Zillow