Mortgage Time

21 Jul
ECB More Dovish
This week’s movement in mortgage rates was mostly due to a more dovish investor outlook for the European Central Bank (ECB). The economic data caused little reaction. Mortgage rates ended the week lower.
For years, the ECB has had a program in place to purchase massive quantities of bonds. The most recent extension of the program consists of buying 60 billion euros per month through December. This added demand has helped push bond yields lower around the world, including U.S. mortgage rates. Investors have been speculating for months about when the ECB will begin to scale back (taper) its bond purchases. On June 27, ECB President Draghi surprised investors by indicating that the extension of the bond purchase program next year might be at reduced monthly levels, and global bond yields moved higher. Recently, however, comments from ECB officials have become more dovish, meaning that the ECB may be less eager to scale back its stimulus programs as soon as some investors had thought. At Thursday’s ECB meeting, Draghi provided just the vague guidance that the discussion about tapering should take place "in the fall." The apparent lack of urgency to taper helped mortgage rates improve over the last two weeks, nearly back to the levels seen before the comments on June 27.
One of the few bright spots in the recent U.S. economic data came from the housing sector this week. Despite a lack of inventory in many markets, a disturbing trend had appeared to be developing, as housing starts had declined in March, April, and May. However, the report for June released on Wednesday suggested that the three months of declines merely reflected that the data is highly volatile over the short-term.

In June, single-family housing starts jumped 6% from May, and the results for May were revised higher as well. Single-family housing starts were 10% higher than a year ago. Similar gains were seen for building permits for single-family homes in June. They were 9% higher than a year ago.
Looking ahead, the next Fed meeting will take place on Wednesday. No change in the federal funds rate is expected, but investors will be looking for guidance about future monetary policy. Before that, Existing Home Sales will be released on Monday and New Home Sales on Wednesday. Durable Orders, an important indicator of economic activity, will come out on Thursday. The first reading for second quarter GDP, the broadest measure of economic activity, will be released on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

>> View the newsletter online: http://www.mbsquoteline.com/newsletter/view/269/21342/0/3

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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Congratulations Yameen and Mariam on your investment home purchase!

18 Jul

Congratulations Yameen and Mariam on your investment home purchase! Great location and investment potential.

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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I love those happy customers!

14 Jul

The views expressed are my own and do not necessarily reflect the views of my employer.

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MORTGAGE TIME

14 Jul
Fed and Data Benefit Rates
Over the past week, comments from Fed officials and weaker than expected economic data were positive for mortgage rates. After rising for the last two weeks, mortgage rates ended this week lower.
Every six months, the head of the U.S. Fed testifies before Congress. In her testimony on Wednesday, nearly all of Fed Chair Janet Yellen’s comments simply reiterated what had already been communicated by Fed officials. However, she did provide one new piece of information regarding future Fed policy which caused a significant reaction. Yellen said that the Fed would not have to raise the federal funds rate "all that much further" to reach a "neutral policy stance," which is the rate which neither helps nor hinders economic growth. The practical implication of a lower "neutral" rate is that the Fed would stop raising rates sooner than investors had previously expected. A potentially smaller number of future rate hikes was viewed as good news for mortgage rates.

A shortfall in the retail sales and inflation data released on Friday also was positive for mortgage rates. Excluding the volatile auto component, retail sales in June declined for the second straight month, while the consensus was for a modest increase. This was the first period of back-to-back monthly declines since July and August of last year.
The inflation data also fell short of expectations. The core consumer price index (CPI), which excludes food and energy, remained well below the Fed’s target level of 2.0%. Expectations for another rate hike by the Fed this year declined after the release of the retail sales and inflation data.
Looking ahead, the biggest event for U.S. markets next week likely will be the European Central Bank meeting on Thursday. While ECB officials have already said that they will wait for the meeting on September 7 to announce their plans for the bond purchase program, any guidance at this meeting about future policy will affect markets around the world. It will be a light week for U.S. economic data. The NAHB housing sentiment index will be released on Tuesday. Housing Starts will come out on Wednesday. The Philadelphia Fed regional manufacturing index will be released on Friday.

>> Read the article online: http://www.mbsquoteline.com/newsletter/view/268/21342/0/3

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

#MortgageBlog, #BestMortgageLender, #GMFS, #JulieNichols, #NicholsTeam, #ChangingLives

Mortgage Time

7 Jul
Focus Remains on Europe
The prospect of tighter monetary policy from the European Central Bank (ECB) again was the main influence on U.S. mortgage rates this week. The U.S. economic data caused little reaction. Mortgage rates ended the week higher.
Similar to what the U.S. Fed did earlier in the decade, the ECB has been buying massive quantities of government bonds to help push yields lower and stimulate the European economy. This has been good for bonds around the world and has lowered U.S. mortgage rates. Last week, however, ECB President Draghi hinted that they might begin to scale back (taper) their bond purchases sooner than expected. The possibility of reduced demand from the ECB caused bond yields to rise. Then on Wednesday, the ECB released the minutes from the June 8 meeting, and this reinforced investor expectations for tighter monetary policy. Global bond yields rose further, including U.S. mortgage-backed securities, pushing mortgage rates higher.

Friday’s release of the key Employment report from the Bureau of Labor Statistics revealed a familiar story. Job gains were impressive, but wage growth was not. Against a consensus forecast of 175,000, the economy added 222,000 jobs in June. In addition, upward revisions added 47,000 jobs to the results for prior months.
The economy has added an average of 194,000 jobs over the past three months, compared to a monthly average of 187,000 for all of 2016. The unemployment rate unexpectedly increased from 4.3% to 4.4%, but this was viewed as a sign of strength since it was mostly due to workers entering the labor force. Average hourly earnings, an indicator of wage growth, fell short of expectations and were just 2.5% higher than a year ago. The weakness in wage growth was good for mortgage rates and offset the negative effect of the solid job gains. As a result, there was little net change in mortgage rates after the release of the data.
Looking ahead, Friday will be the big day next week with Retail Sales and CPI. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. The Consumer Price Index (CPI), a widely followed monthly inflation report, looks at the price change for goods and services which are purchased by consumers. Before that, Fed Chair Yellen will be delivering her semi-annual testimony to Congress on Wednesday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

>> View the article on-line: http://www.mbsquoteline.com/newsletter/view/267/21342/0/3

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

#MortgageBlog, #BestMortgageLender, #GMFS, #JulieNichols, #NicholsTeam, #ChangingLives

U.S. market needs more homes to sell

7 Jul

Reblogged from Scotsman Guide – Victor Whitman

Homes prices have never been this high, and newly listed homes are flying off the market at a record pace. So why are Realtors worried?

Lawrence Yun, chief economist of the National Association of Realtors (NAR), spoke with Scotsman Guide News this week about why stubbornly low levels of home inventories for sale are creating a drag on the market.

Are you concerned about how fast home prices have been rising?

It is a faster-than-average price appreciation, but I would say that I am concerned for renters’ ability to buy. I am not concerned that it is a bubble where prices could decline measurably.

Why isn’t it a bubble?

Well, compared to 10 years ago, things are fundamentally different. The underwriting standards are much more stringent as reflected by very high credit scores of those loans that are being approved. Ten years ago, there was no documentation [and] the credits scores may have been fake credit scores. We know about subprime mortgages. That is one distinctive difference regarding the demand. The demand is quality demand this time versus funny demand 10 years ago. Related to the supply, there was an overproduction. Homebuilders were adding over 2 million housing units per year 10 years ago. Today, we are only slightly above half that level. The limited supply is clearly implying that we are not seeing any oversupply with impending price declines. So, it is fundamentally different, both demand and supply.

How would judge the relative affordability of homes right now?

That is the worrisome sign. Affordability is getting out of hand. In some markets, say Seattle, Denver, prices have risen significantly. And, therefore, where a middle-income person in the past may have been able to buy a median-priced home, that is no longer the case. That is the reason why it is contributing to this historic low homeownership rate that we have been stuck at for the past year, essentially at a 50-year low. We already know about the difficulty in California, where it seems like only the wealthy or super wealthy can buy a home. So, affordability is much more challenging, and that should be a very big worry for the country as a whole.

As for the inventory of homes for sale, have you ever seen the market this tight?

It is matching up with historically low inventories. Maybe by a few percentage points, it is at a historic low. What is also unique this time around is how fast things are selling. Based on the market, as reported by Realtors, it is slightly less than 30 days, less than a month. This is a fast-moving pace, which means that whatever shows up in the market is being quickly snatched up, and taken off the market. That is why the inventory remains very low.

But NAR recently got some encouraging data on this through its survey of potential sellers, right?

The homeowners are indicating that it is a good time to sell. Now the question is, will they act on their sentiments? For some people in markets with a very tight supply, there are people who may consider listing, but then they hesitate. They wonder if they sell their home, will they be able to buy another property in the same market? If they are staying in the same metro, they are concerned that if they sell it, they may be unable to buy. This is giving hesitancy to people who say it is a great time to sell.

Would an increase in new-home construction be a key in relieving shortages?

Yes. One way to view it is that currently people are playing musical chairs. They are standing up and rotating. They hope to find an empty chair. If we introduce more empty chairs into the mix, then people will feel much more comfortable. Right now, because new homes are not adding to those homes on the market, people should be concerned about whether they should stand up and sell their property. At the moment, the homebuilders are key to the solution, but unfortunately the increases being brought into the market has been grossly inadequate — only a marginal increase when we need a great, fast ramp up.

You have been quoted as saying that the market may be headed for ‘a crisis’ unless housing shortages are relieved? Could you explain what you mean by that?

A crisis not in terms of a housing-market bubble and crash, but a crisis in terms of affordability. The economy is doing fine — consistently over 2 million job creations in each of the past four years and likely another 2 million this year. With job creation, this is creating housing demand. But if there is inadequate supply, the prices will get pushed up way above people’s income growth, and that will lead to affordability challenges. We may plunge more in terms of homeownership rate. The homeownership rate is already at a 50-year low and it could decline even further if we don’t have more supply from homebuilders adding construction.

How do you think that homebuilders will respond?

The likely scenario is that homebuilders will marginally increase supply. Over the next couple of years, I believe home prices will outpace people’s income. It has been the case for the past five years, and it is unsustainable.

>> Read the original article here: http://www.scotsmanguide.com/News/2017/06/U-S–market-needs-more-homes-to-sell/?utm_source=TopNews070717&utm_medium=email&utm_campaign=TopNews

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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How much can you afford?

5 Jul

One of the first questions when buying a home is, “how much can I afford?” Let me help you find your perfect mortgage solution – call or visit today 469-786-8662

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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Come visit our new location!

27 Jun

We’ve moved! Come by and see us or call me at 469.786.8662

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Addressing appraiser shortage isn’t a simple fix

23 Jun

Reblogged from Scotsman Guide – Victor Whitman

Addressing appraiser shortage isn’t a simple fix

Much ink has been devoted to news stories over the last few years about the declining number of residential appraisers and the dearth of young people going into the profession. Although it is true that the number of appraisers is down nationwide, the challenge of producing quicker, accurate appraisals is nuanced.

It will take more than simply adding to the overall numbers of qualified appraisals to ensure timely service in all areas, industry experts told Scotsman Guide News.

A declining number of appraisers has been the focus of concern. According to the Appraisal Foundation, the pool of people qualified to assess a home’s value has dropped from 96,251 individuals presently, down from 121,344 a decade ago.

These lower numbers are primarily driven by a steep drop-off in state-licensed appraisers. The number of state-licensed appraisers, who have less training than certified appraisers but are qualified to handle most home appraisals, has fallen dramatically, to 7,854 nationwide today, down from 30,286 in 2007.

The number of certified residential appraisals has dropped as well, from 54,177 to 49,187 over the past 10 years. The number of certified general appraisers, who are able to appraise both commercial and residential properties, has risen to 39,210, up from 36,881 a decade ago, the Appraisal Foundation reported.

Increasing the number of appraisers won’t solve the problem of getting a timely appraisal done in many parts of the country, however, said David Bunton, president of the Appraisal Foundation, a Washington, D.C.-based nonprofit that sets the congressionally mandated standards for appraisers. He said the real issue is not so much a lack of professionals overall. It is that certified and state-licensed appraisers often aren’t willing to travel far afield to do the work.

Appraisers have to spend more time on the job and get paid less on average than they did a decade ago, Bunton said. Nowadays, in the post-financial crisis world, the federal government requires a firewall between lenders and the appraisal process. Appraisals are now ordered through third-party appraisal management companies, which take a cut of the fee.

“The economic issue sort of transcends all areas. It can be urban or suburban,” Bunton said. “If I have to drive three hours in each direction to go view a property, and I am being offered a relatively modest amount, I just won’t do it. I am going to go out and do either litigation support or divorce work or insurance, or move on to something else.”

Fewer rural appraisals

The sharp drop in state-licensed appraisers has come about largely because the Federal Housing Administration (FHA) now only accepts a valuation from certified appraisers for FHA-backed loans. Bunton said state-licensed rural appraisers have been disappearing since FHA changed the rule in 2008.

Rural appraisers often typically do just one or two appraisals a month. It is a part-time job. When the FHA stopped accepting appraisals from state-licensed appraisers, they had the choice of going back to school or letting their credentials lapse. The cost and time involved in getting certified didn’t make sense to them, Bunton said. Given that the FHA would no longer accept their appraisals, they stopped doing appraisals, even for the loan types that still accepted them.

“We visited with a congressman from New Mexico,” Bunton said. “He represented the entire southern half of New Mexico. He said Las Cruces, New Mexico, has a population of 100,000, and we only know of two people who want to do residential appraising. I went back and looked, and there is a federal registry of appraisers, and there were 47 people with a Las Cruces address that were on the appraiser registry. They are there. They just don’t want to work for the money being offered.”

During an interview last week, Susan Allen, senior vice president in CoreLogic’s Valuation Solutions Group, said that the focus of the industry’s attention should not be fixated on the number of appraisers at a given time. She noted that demand for appraisals fluctuates greatly, while the numbers of appraisers can’t be adjusted that fast.

“No matter how we adjust appraiser certifications, training requirements, or education requirements, we are not going to instantaneously see 25 percent more appraisers available in that market to fill the void,” Allen said. “So, it is not practical that we are going to address the industry’s desire to compress turn times solely by increasing the number of appraisers to the point where we can handle peak mortgage application volume in every part of the country. It is not going to happen.”

Allen said that improvements in efficiency and turnaround times will likely depend on technological advances and improvements to the process. She said although computer valuation models have improved, technology won’t ultimately replace the need for live appraisers.

“We have to leverage appraisers for their unique skill sets, especially research and analysis,” Allen said. “Those things are critical in our business for understanding value, but we have to fuel that appraiser with robust data, analytics and appropriate technology to allow them to proficiently do their job.”

>> See the original Article here: http://www.scotsmanguide.com/News/2017/06/Addressing-appraiser-shortage-isn-t-a-simple-fix/?utm_source=TopNews062317&utm_medium=email&utm_campaign=TopNews

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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#GMFS

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Love those happy customers!

20 Jun

The views expressed are my own and do not necessarily reflect the views of my employer.

Visit my website at: www.juliecnichols.com or contact me with any of your home loan questions.

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#GMFS

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