September 19, 2017 –
Meetings of the Federal Reserve Board are very news worthy for the markets by themselves. On the other hand, thinking about how much news and data the Fed has to consider before they make a decision regarding interest rates and other activities is almost mind boggling. It is not as if they look at the jobs data and make a decision based upon that report. There are hundreds, if not thousands, of points of data to consider.
Add the current events happening today, and one would not want to be in that decision-making position. Between Korean nuclear tests, Hurricane Harvey, Hurricane Irma, legislative and administrative actions, and more; there is no lack of information which might influence the Fed. In other words, the economic data is very complex, but adding all these other factors make the decision-making environment totally convoluted.
Before the current events intervened, the betting line was that the Fed would announce tomorrow that they will start paring down their assets — most likely starting in October. They were expected to hold open the possibility of raising rates again before the end of the year, but were not likely to act at this meeting. We believe that the current events make it even less likely that the Fed will raise rates at today’s meeting and the decision to start paring down in October may still stand, but even this expected move could be delayed.
September 15, 2017
|Daily Value||Monthly Value|
|6-month Treasury Security||1.17%||1.13%|
|1-year Treasury Security||1.28%||1.23%|
|3-year Treasury Security||1.50%||1.48%|
|5-year Treasury Security||1.79%||1.78%|
|10-year Treasury Security||2.20%||2.21%|
|12-month LIBOR||1.712% (Aug)|
|12-month MTA||0.944% (Aug)|
|11th District Cost of Funds||0.707% (July)|
|Prime Rate||4.25% (June)|
Zillow Inc., Seattle, said home listings across the U.S. that receive 30 or more “favorites” on Zillow within their first week on the market sell in under two weeks and for more money, which Zillow Chief Economist Svenja Gudell said is a sign of how competitive the housing market has become. Conversely, Zillow said homes that get 10 or fewer favorites in their first week go for less money and take more than a month to sell. “Favoriting” a home on Zillow is a way for shoppers to save homes they’re interested in coming back to later, making it easy to show a friend, partner or real estate agent. And as home buyers skew increasingly younger and more savvy on social media, the language of social media counts for something. According to the Zillow Group Consumer Housing Trends Report, nearly 70 percent of sellers say seeing how well their home is performing compared to similar homes on the market is an important way for them to gauge interest. About 60 percent of sellers say an important way for them to gauge interest is to know how many people have looked at their home online. Source: Zillow
The United States is going through an energy revolution that within 20 years will reshape people’s homes and communities, experts said at the National Association of Realtor®’ 2017 Sustainability Summit in Washington, D.C. Most people aren’t aware of the revolution right now, but that will change as the cost of alternative sources of energy, such as solar panels, plummets and the use of smart technologies—particularly LED lighting—goes mainstream. “Smart cities are already here, but they’re unevenly distributed right now,” said Geoffrey Kasselman, executive managing director of commercial real estate advisory firm Newmark Knight Frank. Kasselman and other experts were on hand at the summit to give real estate professionals a better understanding of how sweeping changes in energy use and technology will impact what people want in their homes and communities. “Consumers are already telling us they want sustainable features in their home,” NAR President-elect Elizabeth Mendenhall said at the meeting. “What consumers don’t know is how to make their home more energy-efficient and what to ask for, and that’s where Realtors® can help.” “We’re transitioning from a petroleum- to a solar-based global economy,” Kasselman said. “We might never see a barrel of oil over $50 again. A new world order is emerging.” Source: Realtor® Magazine
The U.S. homeownership rate, which fell in 2014 to a 20-year low, is poised to recover some in the next few years, buoyed by positive underlying fundamentals, said First American Financial Corp., Santa Ana, Calif. The company’s annual Homeownership Progress Index noted that the homeownership rate fell under 64 percent in 2014, the lowest level since 1994, after peaking the previous decade at a record 69 percent. Despite some volatility since 2014, First American Chief Economist Mark Fleming said that the Millennial generation is now poised to boost homeownership over the next several years, noting increasing educational attainment indicates prospects for higher income–and subsequently, homeownership demand. “Even as Millennials continued to delay marriage and family formation and pursue higher education levels, the Homeownership Progress Index only declined moderately from 2015 to 2016,” Fleming said. “Yet, the prospect for future homeownership demand looks hopeful, as more households increase their educational attainment level and thus their prospect for higher income.” The Homeownership Progress Index measures how a variety of lifestyle, societal and economic factors influence homeownership rates over time at national, state and market levels. Source: Mortgage Bankers Association