Weekly Mortgage and Real Estate Report – Week of July 16, 2018

Rates in Perspective


Each time the Federal Reserve Board raises short-term interest rates, everyone seems to be expecting rates on home loans to follow suit. And sometimes this does happen, but often times it does not. Thus, we always find it helpful to remind our readers why the relationship is not a “one-to-one” phenomenon. For one, the Fed controls short-term rates indirectly. Fixed home loan rates are tied to long-term rates which do not always react in the same direction as short-term rates, though certainly there is a relationship.

Secondly, many times long-term rates rise in anticipation of a move by the Fed. Thus, rates have already risen by the time they announce their decision and the result may be either stable long-term rates or even a slight move downward if the move was fully anticipated. Finally, there are typically intervening factors that might change the direction of rates after a decision is announced. For example, after the most recent increase by the Fed, the trade war rhetoric heated up and this has caused some consternation in the stock market. If investors are selling stocks, often they are buying bonds which can cause interest rates to fall a bit.

The bottom line? If the Federal Reserve is raising short-term rates in response to a strong economy, we would expect long-term rates to rise as well. But not necessarily by the same amount or at the same time. For example, the Fed has raised short-term rates by close to 2.0% within the past three years. Rates on home loans have risen approximately 1.0% from their lowest point, which was the lowest on record. Meanwhile, both short-term rates and long-term rates are below where they were a decade ago and their historic averages. Where are rates going from here? As we watch for indications by the Fed, the Fed will be watching the strength of the economy when they meet again at the end of the month.

 Homeowners and renters will put $13.2 billion in savings generated by the recently passed Tax Cuts and Jobs Act back into the housing market in 2018 through the purchase or rental of new homes, according to a data analysis by Zillow. Furthermore, an additional $24.7 billion in savings from the tax reform legislation will be spent this year on home renovations. The Tax Policy Center estimated that the average taxpayer received a $1,610 tax cut this year from the new law, and Zillow forecast renters will spend about 11 cents for every dollar from their tax cuts on buying or renting a larger home, while homeowners are expected to spend 15 cents on the dollar on home renovations. Lower income households are expected to spend more of their tax cut on buying or renting a larger home than higher income households. However, Zillow added that the amount of tax cut funds that lower income households are expected to spend—$200 million—could have been as high as $4 billion if the tax cut had been uniformly distributed instead of providing larger cuts to higher income households. “Despite new limits to two longstanding tax benefits for homeowners, the typical American taxpayer saw their tax burden fall in 2018 as a result of tax reform,” said Zillow Senior Economist Aaron Terrazas. “Some of these tax savings will still find their way into the American housing market, even though they were not explicitly targeted there, as renters and homeowners decide to use their tax savings to rent or buy a bigger home or renovate their existing home. Lower income households will spend more of their tax cut on buying or renting a bigger home, adding demand to an already rapidly appreciating housing market.” Source: National Mortgage ProfessionalThe majority of homeownership conversations focus on the impact from millennials, but senior citizens may actually have more influence in shaping the future market, according to the Joint Center for Housing Studies of Harvard University’s 2018 State of the Nation’s Housing report. The median age of homeowners is on the rise, increasing from 50 in 1990 to 56 in 2016. Americans over the age of 65 were the only age group who had a higher homeownership rate in 2017 (78.7 percent) than in 1987 (75.4 percent), according to the report. Further, the report states that “the only reason the national [homeownership] rate is near the 1994 level is because older adults now make up such a large share of households.” Many seniors say they want to stay put in their homes. Eighty-eight percent of seniors said they intend to stay in their current home as they age, according to a 2014 survey. This could create growth in home improvements and renovations that are focused on accessibility and aging while staying in one place. But that also could place more pressure on younger adults to find a home to buy. Aging baby boomers of 65 and older have grown by more than 7 million households over the past decade. There have been fewer home sales from this demographic than there used to be, which is also contributing to the shortage of existing homes for sale, the report notes. Source: The Joint Center for Housing Studies of Harvard University

Renters are less likely to be evicted or skip out on their leases thanks to improving economic conditions in the U.S., according to a new report from TransUnion. The report shows that renter risk decreased by 2% year-over-year as 34% of renters now have renter scores of 720 or higher. The score is based on a TransUnion proprietary scoring method. According to TransUnion Senior Vice President of Rental Screening Mike Doherty, landlords can thank a strong economy and low unemployment levels for the rise in renter dependability. “Strong local economies coupled with low unemployment rates are likely driving the improvement in the average ResidentScore,” Doherty said in a statement. “This is positive news for renters as fewer applicants are likely to be declined or be subject to higher deposits. For property management companies, this is a major plus as the likelihood of evictions, which can cost thousands of dollars, drops precipitously when renters have a higher ResidentScore,” he added. Source: HousingWire


Weekly Mortgage and Real Estate Report – Week of July 9, 2018

The Jobs Picture — More Questions 

With the release of the June employment report we have now seen six months of data for 2018. This gives us a pretty good indication of how the economy is doing this year. The economy has added approximately 1.25 million jobs in the first six months of the year. And though the last two months are still subject to revisions, it is not expected that the average number of jobs added over six months will change that much.

How does this number differ from the number of jobs added in 2016 and 2017? We added 2.1 million jobs in 2016 and 2.2 million jobs in 2017. That comes out to approximately 170,000 jobs per month. Thus, the number of jobs added has increased moderately this year. That leads us to two questions. Can we assume that the tax plan as implemented is creating additional jobs? We think that six months is too short of a time period to come to that conclusion, but it certainly is a possibility.

Secondly, why did the unemployment rate increase last month? One possible answer is that the labor participation rate may be returning to normal. In the past month 600,000 workers joined the workforce and the labor participation rate ticked up to 62.9%, though it is still below where it was a decade ago. We may never move to the level of participation we saw before the recession because, as the baby boomers have aged, many have retired. Neither of these questions have been answered fully, but we are seeing some good evidence in last month’s jobs report. Perhaps the answers will come into focus during the second half of the year.

 Many potential homebuyers may be putting off their purchase due to a lack of accurate knowledge about the state of the market and their ability to enter it. A new survey from FDIC-insured bank Laurel Road asked college-educated Americans about their homebuying plans. The poll found many misconceptions about the housing market and arranging financing, with down payments, interest rates, and affordability all weighing on potential buyers. “Purchasing a home is a life-changing decision, yet despite the range of resources, people often aren’t aware of the personalized options available to fit their specific situation,” said Alyssa Schaefer, Chief Marketing Officer of Laurel Road. The survey found that almost half of respondents are unaware of alterative down payment options, believing that 20% is barrier to their homeownership dreams. There is also a misconception about interest rates with many thinking they will hit 6% by year-end, well above the 4.6% forecast by the Mortgage Bankers Association. Americans estimate they will buy a home in the next six years, on average. First-time buyers plan to buy in two years on average (when their average age will be 36) and 62% of those who are concerned about affordability are currently looking or plan to buy in less than five years, compared to 33% of those who aren’t concerned. Among those who have bought or plan to buy a home, 85% have plans for their equity if they refinanced their loan: 48% would put it into savings; 41% would pay off debt, such as credit cards or student loans; 27% would remodel their home. Source: Mortgage Professional AmericaThe old adage of “beauty’s only skin deep” may be true, but when it comes to real estate listings, try telling that to potential buyers. Even in today’s tight market buyers are still more likely to be drawn to a home that look’s great in an online listing and that means more than just taking a photograph. “Online listings have to capture the attention of buyers or the home is less likely to sell, and there are two approaches to do that effectively,” says Jeff LaGrange, Vice President of the RE/MAX Northern Illinois Region. He says that buyers benefit from being able to see more of a home in online listings, but it is a challenge for sellers. “One route is to price the home very aggressively. That certainly gets buyers’ attention,” he says. “The other is to present the home via an alluring series of photos that make buyers think, ‘Gee, that place looks great. Let’s ask for a showing.’ ” Key to making that work is ensuring the home is prepped to minimize clutter, emphasizing cleanliness, and adding a bit of staging. Sellers should always be encouraged to have a professional photographer take the images for an online listing according to RE/MAX brokers surveyed. “Not long ago a couple contacted me after their home failed to sell for a year,” recalls Madonna Egan of RE/MAX 1st Service in Orland Park, Ill. “I looked at the listing, and the photos were dark and clearly not of professional caliber. Plus, the home hadn’t been prepared fully.” Egan says they made sure the home was prepared correctly and then had a professional photographer take the images with almost immediate results for the seller. “The home was under contract in a week,” she says. Source: DSN News

With home prices up in most markets, homeowners aren’t being shy about tapping into their newfound equity. Home equity lines of credit were up 18 percent in the first quarter, and up 14 percent from a year ago, according to ATTOM Data Solutions’ First Quarter U.S. Residential Property Loan Origination Report. “Putting home equity to work is the name of the game in the 2018 housing market,” says Daren Blomquist, senior vice president at ATTOM Data Solutions, a real estate data firm. “With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit, rather than refinances to tap their home’s equity.” “While there was early speculation that tax law changes related to home equity loans might dampen demand, that is not playing out in the market,” says Paul Doman, president and CEO of Accurate Group, which provides appraisal and title solutions for home equity lenders. “The strong HELOC growth in Q1 is consistent with the results of our March 2018 Home Equity Lender Survey, in which lenders were nearly unanimous in their belief that tax savings is not the primary driver for HELOC demand.” Source: ATTOM Data Solutions

Weekly Mortgage and Real Estate Report – Week of July 2, 2018

Happy 4th!


Tomorrow we get to say happy birthday to America. Today the nation moves closer to the ripe old age of 250 years. Many generations have passed since the birth of our country and while 250 years seems like a long time, we are actually pretty young as a nation — as compared to other sovereign states such as Greece, China, Japan and Portugal. And while we have accomplished much in the past 200+ colorful years, we must remember that as a country we are still evolving.

During this time of celebration, it is important to remember history as it helps us to keep things in perspective. Less than two hundred years ago, we were at war with Mexico. Less than 150 years ago, we suffered through a civil war. One hundred years ago we were fighting in the first of two world wars. Though the world has evolved with us, certainly the world has its share of conflicts today — especially with regard to the new brands of terrorism. In the future, wars may be fought in space — including cyberspace.

While we bemoan how divided as a country we are today, this perspective gives us an understanding of where we have come from. Often conflicts, both internal and external, have led us to become stronger. Let us hope that we again move to resolve our conflicts and again move to become stronger as we approach our 250th birthday in less than ten years. So, Happy Birthday America — and for today, let’s forget about trade wars and conflicts and enjoy the short summer sojourn.

 Primary residences remain important to long term financial security and continue to be the largest asset of most US households. They account for a quarter of all household wealth according to the Board of Governors of the Federal Reserve System’s Survey of Consumer Finances. The figures have been hailed by the National Association of Home Builders during National Homeownership Month. “Homeownership is a primary source of net worth for many Americans, and is an important step in accumulating personal financial assets over the long term,” said Randy Noel, chairman of the National Association of Home Builders (NAHB) and a custom home builder from LaPlace, La. In the fourth quarter of 2017, US households had a record $14.4 trillion of equity in their homes, but with the homeownership rate at 64.2% it is well-below the 25-year average of 66.3%. “We must continue to address the obstacles that remain for many potential home buyers, including factors that increase the cost to build new homes. Skyrocketing costs for lumber is the number one challenge for builders right now,” Noel said. Source: Mortgage Professional AmericaMany Americans recently surveyed say they prefer to live in a neighborhood with a homeowners association, also called a community association, according to the 2018 Homeowner Satisfaction Survey, conducted by Zogby Analytics on behalf of the Foundation for Community Association Research. Ninety percent of survey respondents say their association’s rules protect their investment and enhance their property values. Survey respondents said some of the best aspects of living in a community association are having a clean or attractive neighborhood; a safe neighborhood; a maintenance-free neighborhood; and having the association help maintain property values. On the other hand, respondents said the worst aspects of living in a community association are restrictions on exterior home improvements and paying dues. The most common monthly assessments range from $100 to $300. Condo assessments tend to be higher than HOA fees, with 17 percent being more than $500 per month. Nearly 73 percent of residents living in an HOA said they felt their community managers provide value and support to residents and their associations. Further, 84 percent of respondents said that neighbors elected to the governing board “absolutely” or “for the most part” serve the best interests of their communities. Sixty-nine million Americans live in 342,000 common-interest communities, according to the 2016 National and State Statistical Review for Community Association Data. Source: Community Associations Institute

A new report from Zillow reveals that more Millennials live with their mothers now than at any other time in the last decade. In 2005, 13.5% of adults age 24 to 36 lived with their moms. That number now is up around 25% now, which means that about 12 million Millennials reside in casa de madre. According to the report, rising rents and slow income growth are keeping the kiddos in mom’s basement. Of all recent college graduates, 28% of them live with their parents. Back in 2005 this was true of only 19% of recent graduates. Furthermore, 12% of the Millennials living with mom are unemployed. “As rents outpaced incomes over the past decade, young people turned to their families in large numbers to ease the housing cost crunch,” Zillow Senior Economist Aaron Terrazas said in a statement. “But even as the labor market has improved, the family safety net has yet to unwind,” Terrazas added. “Living with parents may allow young adults to pursue work or a passion that may not be especially lucrative, or save enough money for first and last month’s rent or a down payment on a home of their own.” Already high U.S. rents continue to rise due to high occupancies and strong demand. Right now, the median rent in the U.S. is $1,447, a 3% increase over last year. The concentration of Millennials living at home is particularly acute in cities with the highest rents, all of which have more than 30% of Millennials living with their parents. Source: HousingWire

Weekly Mortgage and Real Estate Report – Week of June 25, 2018

The Fed’s Strong Message 

We now have had some time to decipher the Federal Reserve Board’s statement after their meeting last week. The tone of the message can be described as hawkish. The Fed used words that were a bit stronger with regard to the economy and the future of interest rates. For example, economic growth was described as solid, rather than moderate as in their previous missives. This growth is being supported by a pick-up in household spending and a decline in unemployment.

Though they are still using the term “gradual increases” to describe their rate hikes, the statement pointed to the members’ opinion that two more rate increases were in the cards for this year. In other words, the pace of gradual increases seems to be accelerating. The Fed no longer is worried that inflation is below their 2.0% target rate because inflation is now close to their short-term target and the focus appears to be shifting on the side of keeping inflation from moving higher from here.

While the markets seem to find the path ahead inevitable, we must remind our readers that there is always the possibility of intervening events which could cause the Fed to change their course. In the past we have seen natural disasters, political upheaval, strikes, terrorist incidents and more. We can’t foresee any of these and everyone hopes they don’t happen. However, we need to understand that predictions are just that. No one can ordain the future. And that is what makes the markets and life interesting.

 Millennials put off buying their first home as they struggled with the after-effects of the Great Recession. Now that they’re snapping up houses in greater numbers, many older millennials are making up for lost time: They’re bypassing the traditional gateway to home ownership — the starter, or entry-level, home — and buying larger, more expensive houses where they’re likely to raise families and maybe even grow old. “They rented for longer,” says Diane Swonk, chief economist at Grant Thornton. “Now they’re going to where they want to stay,” possibly for decades. By renting or living with their parents for years, many Millennials in their mid-30s can now afford pricier houses because they’ve socked away more money and moved up to better jobs, Swonk says. And they need the extra space because they’re finally getting married and having kids after deferring those transforming events. Also nudging them into more lavish houses is a severe shortage of lower-priced starter homes. There’s no hard-and-fast definition of a starter, or entry-level, home but a one or two bedroom — and a small three-bedroom — typically would qualify, says Lawrence Yun, chief economist of the National Association of Realtors (NAR). Prices vary widely by market but starters on average cost $150,000 to $250,000 while trade-up and premium homes cost upwards of $300,000, Swonk estimates. Thirty percent of millennials — those born between 1980 and 2000 — bought homes for $300,000 and above this year, up from 14% in 2013, according to NAR. But older millennials are even purchasing bigger homes than their predecessors at similar ages. From 2012 to 2016, nearly a third of buyers age 33 to 37 bought four-bedroom homes compared to about 24% in that age group in 1980, 1990 and 2000, according to an analysis of Census Bureau data by Ralph McLaughlin, chief economist of Veritas Urbis Economics. Source: USA TodayListing a home on a Wednesday or Thursday can bring benefits for sellers according to a new analysis by Redfin. The firm looked at how well 100,000 homes that sold in 2017 performed on selling price and days on market. Those listed on a Sunday did worst and the other days were ranked relative to it. Wednesday was the best day to maximize price with sellers listing on that day gaining a $2,023 advantage over those who listed on a Sunday. Thursday was the best day for speed of sale and certainty of sale, finding a buyer five days sooner than Sunday-listers and more likely to be sold within 90 days and 180 days. “Serious buyers typically start making their weekend house-hunting plans late in the work week,” said Redfin Denver agent Karla Kirkpatrick-Adams. “You want your home to be one of the fresh listings buyers see pop up as they decide which homes they should see over the weekend. In her competitive Denver market Kirkpatrick-Adams says that many homes are listed on Wednesday and Thursday with the expectation that buyers will come through over the weekend, submit offers by a Monday afternoon deadline and the home will be under contract by Tuesday. Source: Redfin

The most serious headwind facing housing markets today is the escalation of framing lumber prices — up 59% since the start of 2017. Recent NAHB surveys suggest the price for lumber has overtaken the availability of labor as the primary business challenge for home builders. Since the beginning of last year, rising lumber prices have added more than $7,000 to the price of a typical new home and more than $2,000 to the price of a typical apartment. “In the little markets, most builders are very small and so are their margins. When you add $7,000 to the cost of a home [that’s 300,000], people walk away,” said Dale Oxley of Modern Home Concepts in Hurricane, W.Va. “When you have a market that’s anemic, a small builder is pretty much out of business – you can’t get an appraisal to reflect [the additional cost of lumber], so it’s left to the contractor to eat.” There are a number of reasons why lumber prices have jumped, including a rail car shortage in Canada, but the primary factor is the 21% effective tariff rate placed on Canadian softwood lumber. Nonetheless, builder confidence remains strong, despite total housing starts falling 3.7% in April. Though multifamily starts declined 11% last month, that market is up 10% year-to-date, outperforming forecasts. And single-family starts are 8% above their year-to-date totals from a year ago. Source: National Association of Home Builders

Weekly Mortgage and Real Estate Report – Week of June 18, 2018

The Fed’s Announcement 

As expected, the Federal Reserve Board’s Open Market Committee met last week and announced that they would be raising short-term rates by 0.25%. Since the move was anticipated, there was no major reaction by the markets, excepting for the usual increase in rates in anticipation of the decision and subsequently a little easing as the meeting grew closer. This was the seventh time the Fed had raised rates by 0.25% in the past three years during their period of rate “normalization” from the historic lows of the recession and slow recovery.

The big concern for the markets was the statement which accompanied the announcement. As usual, the markets were looking for an assessment of the economy, as well as hints of the pace of future rate increases this year. It seems that the members of the committee are ready to continue increasing rates as much as two more times this year. Some were searching for a hint that rates are coming close to what the Fed considers a normalized level, but that was nowhere to be found. As we have discussed previously, it is an open question where that level is located. When the Fed defines that level, then we will have a better idea of where rates will eventually settle if the economy does not falter.

There was one more important meeting last week. This was the summit with North Korea. Though it was not expected that any breakthroughs were to come from this meeting, it was expected that a positive process would begin. Certainly, the statements made after the meeting were quite hopeful and the meeting itself was a breakthrough. Between international trade and other tensions in the spotlight this year, there has been a lot of caution in the markets contributing to the volatility we have seen. Any easing of tensions could be helpful in this regard.

 Homebuyers carrying a lower credit score can wind up paying $21,000 more than a buyer with an excellent credit score. On a national level, recent data shows that a borrower with an “excellent” credit score could get a home loan with an annual percentage rate approximately 0.6% lower than a borrower with a “fair” credit score. The borrower with the “fair” credit score would thus spend $700 more per year for the typical home. In pricier housing markets, the extra dollars paid would be significantly greater. “When you buy a home, your financial history determines your financial future,” said Zillow Senior Economist Aaron Terrazas. “Homebuyers with weaker credit end up paying substantially higher costs over the lifetime of a home loan. Of course, homeowners do have the option to refinance their loan if their credit improves, but as interest rates rise this may be a less attractive option.” Source: Zillow — Need information on how to improve your credit score? Contact us for a free consultationBuyers — beware and curb your enthusiasm! The seller may be watching. And listening. A growing number of home sellers are using security cameras and microphones to spy on potential buyers as they tour their houses or condos. They then may use what they hear or see as leverage in price negotiations. The trend has been fueled by the spread over the past five years of inexpensive Wi-Fi enabled cameras and mics that homeowners can buy and set up themselves for home security. Motion sensors notify them by text or email that a visitor is in their house, and they can then observe a prospective buyer on a computer, laptop or smartphone through the Internet. Alternatively, they can view a recording later. “Recording devices are cheaper and more readily available,” says Leslie Walker, deputy general counsel of the National Association of Realtors. In a survey conducted by Harris Poll for NerdWallet, 15% of Americans who have ever sold a home said they’ve use surveillance cameras to monitor potential home buyers. And 67% say they would use such cameras if they were selling a home that already had them. “In a competitive housing market, everything is fair game,” says Holden Lewis, a housing analyst for NerdWallet, a personal finance website. Source: USA Today

Home features—particularly those that are technology-based—have a stronger pull on millennial home shoppers than the promotion of brand names, according to a new survey by John Burns Real Estate Consulting, conducted with 20,000 new home shoppers. Millennials tended to show a preference for tech-focused amenities that could make their lives simpler. Young adults born in the 1980s and 1990s are half as likely as their parents’ generation to rank brand as the most important factor when selecting products in the home. They do check reviews online before buying, so the survey showed online reputation is also important to them. The young adults born in the 1990s are more likely to pay an extra $3,500 for a smart-tech refrigerator than older adults. Younger adults may have less income to spend, but they showed a higher preference for technology, according to the survey. Source: John Burns Real Estate Consulting

Weekly Mortgage and Real Estate Report – Week of June 11, 2018

The Fed Meets Today 

This week the Federal Reserve Board’s Open Market Committee meets with analysts expecting another hike in rates. While the overwhelming sentiment is for a hike, the enthusiasm for such a move is slightly lower than it was a few weeks ago. Since then there has been a flurry of international news causing both concern and optimism. On the domestic front, economic growth for the first quarter was pedestrian at best, but the May jobs report came in stronger than expected.

If the Fed raises rates, it would be the seventh increase within the past 30 months. Yet, short-term rates would still be well below where they were at the start of the recession. At that time the Fed started lowering short-term rates by 0.50% to .75% at a time, much different from the tame 0.25% increases we are witnessing as part of their present “gradual” approach.

Whether they raise rates or not, analysts will be watching carefully for the Fed’s statement which will be released on Wednesday along with the rate decision. This statement may give us a clue of what the Fed is thinking about rate increases for the rest of the year and perhaps even into next year. A major question to answer will be at what level will they consider rates “normalized.” The next meeting of the Fed is at the end of the July.

 Institutional landlords are back in action. Institutional investors bought more single-family rental homes in 2017 than in the previous year, the first increase since 2013, according to data compiled by Amherst Holdings LLC. Large firms rushed into the single-family rental business when U.S. housing markets were reeling from the foreclosure crisis and homes were available and cheap. The feeding frenzy was short-lived. By 2014, big landlords were already paring back their purchases as foreclosures dried up and they tackled the challenge of managing widespread homes. Now they’re buying again, at a time when single-family landlords are raising rents faster than apartment owners. While multifamily landlords face pricing pressure from new supply, very few single-family homes are built specifically for leasing. Demand for rental houses “feels like it’s insatiable,” Gary Berman, chief executive officer of Tricon Capital Group Inc., said in an interview. There’s another factor driving Wall Street’s renewed acquisitiveness. Now with their businesses well-established, the large landlords are having an easier time financing purchases, said Greg Rand, CEO of OwnAmerica, an online platform for buying and selling rental houses. The combination of cheaper credit and more-efficient operations have made investors comfortable paying higher prices for properties. “If your cost of capital is lower and the asset class has been proven, you don’t need to buy at a big discount,” Rand said. Source: BloombergHome purchases, new business starts and stock market investment are accelerating among the U.S. Hispanic population in spite of political headwinds, according to the 2018 Annual Report from The Hispanic Wealth Project, a non-profit organization supported by the National Association of Hispanic Real Estate Professionals (NAHREP). Based on the report, the Hispanic homeownership rate rose in 2017 for the third consecutive year to 46.2 percent, an increase from 45.6 percent in 2015. However, the current political environment and uncertain immigration policies have caused many Hispanics– even those with permanent residency status– to hold off on making long-term financial commitments, such as retirement savings or purchasing a home, the report found. The report, released today at The Hispanic Wealth & Real Estate Conference and Latina Wealth Building Series in Miami, also found the median net worth of Hispanics rose dramatically from $13,700 in 2013 to $20,600 in 2016. The report cited data from the Census Bureau and other government entities but noted that consistent data on household wealth is still lacking. The report highlights positive trends in homeownership and entrepreneurship including the facts that Hispanics are the only ethnic demographic to have increased their homeownership rate for three consecutive years and women entrepreneurs represented 50 percent of all Hispanic small business starts. However, there is still progress to be made in the arena of savings & investments, as the report notes 83 percent of all Hispanic Millennials have nothing saved for retirement. “With the youngest population and the highest work force participation in America, it is clear that the financial well-being of the Hispanic community is critical to the economic strength of the whole country,” said Jerry Ascencio, Chairman of the Hispanic Wealth Project. Source: STL News

The idea of “living small” has blanketed TV and social media for the past few years. The “tiny house” has surged in popularity. But now a new survey suggests that people may not be happy living in 400 square feet or less. Forty-four percent of more than 2,000 adults recently surveyed by the real estate website Trulia said they had housing regrets—and the biggest regret among homeowners centered on the size of their home. One in three homeowners surveyed said they wished they had chosen a home that was larger. Only 9 percent of owners surveyed wished they had downsized. But there are still plenty of tiny-home proponents who continue to emphasize the perks of this way of life. They argue that living tiny has several benefits, including being more budget-friendly, requiring fewer materials, and allowing for more simple living. Source: Country Living

Weekly Mortgage and Real Estate Report – Week of June 4, 2018

Early Jobs Report 

It is unusual for the monthly employment report to be released on the first day of the month. Friday, the first day of June, was an exception. Logically, you would think that data released this early would be subject to a higher level of revisions, but we have no statistics to support that theory. What we do know is that rates have been rising all year and this report was released approximately seven business days before the Federal Reserve Board’s next meeting. A meeting in which they will consider raising rates again.

The minutes of the previous meeting of the Fed was recently released, and some analysts believe that the members were starting to hedge on predictions of more than one additional rate increase this year. The lack of inflationary wage pressures was cited as a possible justification for moving more slowly. The question is — could this jobs report change the Fed’s thinking in any way?

The addition of 223,000 jobs in May and an unemployment rate of 3.8% provide plenty of evidence for the Fed to support a rate hike. The increase of wages of 2.7% annually was within expectations, and this would provide some evidence for the Fed to support holding off for now. The Fed also indicated that the labor participation rate had moved down one-tenth of one percent to 62.7%, which contributed to the lower unemployment rate. Many believe that we would need an increase in the participation rate before we experience additional wage pressure. Everything considered, it was a strong report and the Fed will find evidence to support whichever decision they make, but most analysts are still looking for a rate increase next week.

 For homeowners considering a move, some experts are recommending they get a home maintenance inspection before they list their home for sale. Such an inspection can provide a full picture of any repairs that need to be performed before they become negotiating points in a transaction. A home maintenance inspection is similar to a home inspection that is done by buyers, says Frank Lesh, president of the American Society of Home Inspectors. A licensed inspector can check on the main systems of the home, such as the roof, walls, foundation, HVAC, electrical, and plumbing. “You might not even notice a problem [with your home],” says Lesh. An inspector may be able to spot small problems before they become bigger, more expensive problems. They can also advise clients on the regular maintenance tasks they should be doing on their home to keep everything in tip-top shape. An inspector can walk homeowners around the property to show them any potential problems they spot. Homeowners will receive a report that details anything the inspector finds, which can serve as a to-do list to address, if they so choose. “Every three to five years, you should have a home inspector come out and do a maintenance inspection,” advises Lesh. “Like changing your furnace filter, you should do it before it gets so bad [that it becomes] a problem. … A home inspector isn’t trying to sell you anything … and isn’t going to make any money off doing the repairs.” Source: realtor.com®Aiming to simplify consumer access to real estate listings, CoreLogic announced a partnership to offer consumer-facing real estate websites to its multiple listing services clients. CoreLogic, a global information analytics and data-enabled solutions provider is set to partner with Homes.com, which was recently rated as one of the top real estate websites in the U.S. by the Consumer Affairs research team. The agreement will provide CoreLogic clients access to the Homes.com’s Fusion Portal Solution, a public website platform for multiple listing organizations. “The Homes.com Fusion Portal solution offers organizations everything they need to launch a premier real estate web portal in their local market,” Homes.com President David Mele said. Organizations taking advantage of this offer can deploy a search solution that simplifies consumer access to real estate listings. “The enhanced web presence combined with the most accurate multiple listing data, advanced search capabilities, and a contemporary and responsive interface will help multiple listing organizations expand their local presence while driving consumer inquiries back to their members,” Mele said. After a stream of acquisitions in the valuations space, it seems CoreLogic is beginning to move into the real estate territory. Could it be taking aim at Trulia, Zillow, or other MLS sites? Source: HousingWire

The National Association of Home Builders recently surveyed homeowners who have been living in their homes for a decade or longer to find out why they are choosing to stay put. Seventy percent of respondents said they weren’t moving because they like their home and are comfortable in it. Others said they did not want to go through the hassle and expense of finding another home and moving (21 percent), and one-tenth of respondents said there were no homes on the market they would want to buy or could afford. “This last finding suggests that a not-so-trivial 10 percent of people living in their homes for a decade or more could be enticed to move if only there were more homes on the market to choose from,” according to NAHB’s Eye on Housing blog. Meanwhile, NAHB’s survey found that some of the least important factors in keeping homeowners from moving were to hold onto a low interest rate (5 percent) and because their home is still worth less than their current mortgage (3 percent). Source: National Association of Home Builders