How Did The Predictions Go?
Though we are not in the business of predicting the future, it is sometimes very interesting to go back and see how forecasts play out after the fact. Especially when there is a lot of news happening during a short period of time. First, we had the jobs report released on November 2. The expectations were for an increase of just under 200,000 jobs after a weaker than expected 118,000 added in September (adjusted downward from 134,000 originally reported). The unemployment rate was expected to remain at 3.7%. The numbers came in at 250,000 and 3.7%, respectively. The general assessment was that the report was strong and more than offset the weak growth the previous month due to Hurricane Florence.
Just four days later, we had Election Day on November 6. The forecast was for a changeover in the House with status quo on the Senate side. This prediction was right on point. We also made the remark ahead of time that such a result would not change the divisions in Washington. We can’t comment on this prediction because it will take some time for this to play out; however, we are still not optimistic for improvement in this regard.
Finally, the Federal Reserve Board started their meeting the day after the election. The Fed was expected to keep rates the same for this month, but to continue to raise the possibility of a fourth increase in December. Again, this forecast was right on. Actually, the Fed announcement after the meeting did not seem to lower the probability of another hike in December. So, what was the reaction to all this news? Looking at the stock market as one indicator, stocks had a very volatile and down month in October, but started to rally as the month closed. Stocks continued that rally past election day, but paused after the Fed decision.
The Home Affordable Refinance Program, or HARP, is expiring on December 31, 2018. HARP was created in coordination with Fannie Mae and Freddie Mac to help homeowners with no equity or negative equity refinance their home loans. Since its inception in 2009, the program has put millions of people into more affordable home loans. Fannie and Freddie are each rolling out high loan-to-value programs that will fill the gap HARP leaves behind at the end of this year. Fannie’s program is simply known as the high LTV refinance option, while Freddie’s is called Enhanced Relief Refinance. HARP and these two new programs have some things in common as well as some important differences. A key distinction is that HARP was created in response to the financial crisis. Its mission was to fix a specific problem, whereas both of the new high LTV programs are designed to be a permanent refinance solution for eligible borrowers. As of October 2018, there were 49,000 HARP-eligible homeowners, according to the FHFA. In effect, thousands of people are potentially missing out on getting into less-expensive loans and building or rebuilding their home equity faster. These borrowers can’t count on the new Fannie and Freddie programs to help them because the qualifications are different. “Borrowers who don’t elect to refi under HARP, while the program is still available, may be missing a really great opportunity since it’s ending this year,” says Lauren Shepherd, project manager for HARP. Folks who qualify for HARP should talk to their financial advisor or lender about the benefits and risks of refinancing their home loan. If you’re a homeowner who took out a home loan after October 1, 2017 and owe more than your house is valued at, then you might qualify for the new Freddie or Fannie high LTV refinance option. Keep in mind, you must be up to date on your payments and the loan has to be at least 15 months old to be eligible. Source: BankRate.comThe best neighbors are trustworthy, quiet, friendly, and respectful, according to realtor.com®’s 2018 Good Neighbors Report (which is not affiliated with the National Association of Realtors®’ Good Neighbor Awards program). But there’s no need to maintain a close friendship to be considered a “good neighbor,” according to the survey of 1,000 consumers across the country. “While it’s true that some people focus on what annoys them about their neighbor, it’s a welcome surprise to see that people generally think positively of their neighbors,” says Nate Johnson, chief marketing officer at realtor.com®. “Trust and dependability play an integral part in helping a neighborhood feel like ‘home.’ Building it can be as easy as stopping by to say hello.” Millennials and Gen Z respondents (ages 18 to 34) and older adults (ages 55 and up) tended to care the most about having friendly neighbors, according to the survey. Researchers found the least appreciated quality for all groups, however, was having a close friendship with a neighbor. Only 9 percent of women see a close friendship with a neighbor as a must-have for a good neighbor; men rated it higher at 20 percent. Some of the most off-putting neighborly traits: Disrespectful of property, loud, untrustworthiness, and being nosy, messy, or unfriendly, the survey found. Welcoming new neighbors can create a “good neighborly” vibe, the survey found. The most common welcoming method preferred by 65 percent of respondents was just a simple introduction. However, the reality is that many new neighbors don’t get welcomed. Only 46 percent of respondents reported that their neighbors stopped by for a quick greeting, and 39 percent say they were never welcomed to the neighborhood. Source: realtor.com®
Consumers between the ages of 62 and 70 can earn up to 8 percent more in Social Security for every year they delay taking disbursements. Therefore, some homeowners in this age bracket are borrowing against their properties’ equity to fund their daily living expenses, hoping to push off taking Social Security benefits—a tactic some lenders even tout for retirees. But the Consumer Financial Protection Bureau warns that the costs and risks of such a financial strategy are too great. However, some financial experts say it’s a more plausible option than people may think. Jamie Hopkins, co-director of the American College’s New York Life Center for Retirement Income, wrote in a column for Forbes that the CFPB’s conclusion is wrong. “The CFPB’s analysis, misrepresentations, and inaccurate conclusions fail to provide a comprehensive review of potential benefits of Social Security deferral and proper use of home equity,” Hopkins wrote. “Instead, the report unleashed an overly broad and inaccurate censure that could hamper meaningful discussion.” Tom Dickson, an adviser at Reverse Mortgage Funding, told HousingWire that the organization still considers this a strategy for some retirees. “We found that while financial advisers are interested in the idea, they have a very, very, very difficult time persuading their clients to defer their benefit,” Dickson says. “It’s certainly a solid idea. It’s just that in the marketplace, it’s not one that advisers have had a lot of success with in terms of client adoption.” Source: HousingWire