Radio interview…and your Mortgage Market update!

A little over a week ago, I was invited to an interview on our local radio station, KHTS 1220. It was a short segment, but we had fun chatting about the launch of my newest book, Money Rules 101. I shared a few tips for parents in the little time we had, with so much more to cover! You can check out the video by scrolling to the post below!

Stay dry and safe on these slick roads!

Onto the market update…

The stock market just keeps going up. Investors once again are optimistic that President Trump’s policies will bolster the business climate. Deregulation is the likely key to economic growth and investors are counting on major changes to much of the legislation that was enacted under the previous administration. There is concern that the market is becoming severely over valued in that stock prices have rocketed to new records without a single change to any rules or regulations as-of-yet. The market increase is all on speculation and it is creating concern that the ride might abruptly end.

The Mortgage Bankers Association of America reported that seasonally adjust applications for home purchases declined 2.0 percent. However, the unadjusted number reflects an increase of 1.0 percent. Housing purchases overall remain strong and there seems to be no sign of buyer demand waning despite interest rates being higher by almost ¾% from last summer. Refinances are currently at the lowest level since June of 2009.

Housing starts for January declined by 2.6 percent. The silver-lining in the reports is that the 1.246 million rate was well above most analyst’s expectations. Single-family starts increased by a rate of 823,000 which reflects a 1.9 percent increase in this sector. Year-on-year housing starts are up a significant 6.2 percent for single-family units and a whopping 19.8 percent for multi-family homes.

Permits for new housing construction jumped 4.6 percent in January to an annualized rate of 1.285 million. This report also significantly beat most analyst’s predictions. Single-family permits surprisingly declined by 2.7 percent, however they are still higher than the same time last year by 11.1 percent.

Since the last Fed announcement regarding interest rate policy, there is much talk about just how many rate increases there will be in 2017. Listening to various experts on TV, radio and even in print, you will hear predictions of rate hikes of anywhere from one to as high as four. No matter the number, one thing is very likely, mortgage rates and overall cost of borrowing for consumers will very likely end the year higher than where they are now.

Bolstering the argument for rates hikes is the latest producer price index data. January’s PPI report showed an increase of 0.6 percent, far exceeding market expectations. One of the areas of focus for the Fed in their decision to raise interest rates is how much inflation is taking place. For years, the Fed has wanted to see price growth as a catalyst for rate increases. It may appear that this is beginning to occur. This is only one report, but the increase of prices on the wholesale level was significant.

Next week’s potential market moving reports are:

 

  • Monday February 20th – Presidents Day: Markets Closed
  • Tuesday February 21st – PMI Manufacturing Index
  • Wednesday February 22nd – MBA Applications, FOMC Minutes, and Existing Home Sales
  • Thursday February 23rd – First Time Jobless Claims, FHFA House Price Index
  • Friday February 24th – New home Sales and Consumer Sentiment

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-618-1789.