It’s all over but the shouting. You found the house, cut the deal with the help of a qualified real estate professional, and now you’re counting down the days to the move. You might feel as if this is when everything goes on autopilot as you pack boxes and deal with the enormous to-do list before you. But you’d be wrong. Despite your diligence and preparation, scammers and con artists can throw curve balls your way, and you won’t even know what hit you.

 

The purchase of a home is easily one of the largest lifetime investments you’ll make, which means you need to be extra cautious with your money during, before, and after the sale, keeping an eye peeled for these unfortunate real estate scam scenarios:

 

While you are anticipating the closing date, you get an email from what appears to be your real estate agent with instructions on where to wire your down payment. This has the potential to be mortgage fraud, but what can you do to guard against it? For one, don’t trust the email address even if it looks legit. Call or email your agent and ask if he or she sent anything looking like this, and chances are good they will be in abject shock.

 

Cybercriminals are adept at hacking into the email account of someone involved in a real estate escrow, whether it’s the buyer, the seller, any attorneys involved, real estate agents or bankers. These hacked emails tell them all the details they need to know, including your closing date. And as soon as they see your funds in their phony account, your down payment goes the way of that sock in the dryer that is never found again. To guard amassing this, keep communications open with the people involved, both over the phone as well as email, and hand that bank check to someone in person whenever possible, even if you have to pay a courier to do it.

 

But wait. There’s more. A new homeowner arrives at their new front door and tries the key in the lock only to find that it doesn’t work. Suddenly someone opens the front door asking why you’re there and you peek inside, only to see the house is already occupied — by renters.

 

It’s useless to be angry at the occupants, however. These poor folk probably have no idea they were scammed as well. After all, they answered an ad from someone who advertised themselves as the landlord of a vacant property, signed a dummied-up a lease, handed over a deposit, and even got a new set of keys. Your appearance their front door is as shocking to them as theirs is to you. They no doubt already lost not only their deposit but also their first and last month’s rent to this scammer. Whatever transpired, they now have renter’s rights, and you may have to go through a costly eviction process to get your own home back.

 

Unfortunately, the law hasn’t caught up with this crime quite yet. But there is something you can do if the home you bought had been vacant for a while before closing. Ask your agent and anyone else you can think of to check on it regularly, even peering through the windows. The most you can do is try to catch this phenomenon happening before closing takes place.

 

So now you think you’re safe. Even with every “i” dotted and every “t” crossed, however, you can still get rooked during the move itself. The federal government receives thousands of complaints every year about moving companies who offer you a quote and then bills you for twice as much, holding your belongings hostage until you pay up. Some of your items may end up missing as well, only complicating this nightmare.

 

What to do to protect yourself from this? Check customer reviews not only the website of the moving company you hired; also check sites like Yelp! for what others say about this company, and look up their Better Business Bureau score as well. Get more than one estimate and see how it compares to others to determine if it’s on track for the number of rooms they’re loading up and the distance your belongings are being moved. And by all means, call your insurance agent to inquire about buying some short-term insurance to protect your belongings in the move.

 

Scams like these continue to happen, becoming even more sophisticated over time, and we’re not trying to freak you out. It’s a matter of staying diligent until the very day you hook up the big screen TV. For more information on how to deal with these and other fraud issues, go to your local Department of Real Estate Services website.

 

Source: TBWS

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Sep 7, 2018

If the eyes are the window to the soul, then the front door is the gateway to the soul of your home. Aside from providing security, is it a statement? Does it provide need light in an otherwise dark entry area? Is it weathered and tired, or does it welcome guests?

 

If you are considering selling your home, think of the entry door as the first thing potential buyers will see and touch when entering your house, leaving a lasting impression as well as portending what else your house contains. As homeowners, we often don’t take the time to analyze what someone else’s first impression might be.

 

Ask any home improvement specialist or Realtor about the importance of curb appeal and they will confirm that how your home looks from the road may mean the difference between a drive by and an appointment to view it. And if you are looking for a good return on investment, Remodeling Magazine reports that you’ll recoup almost 91 percent of the cost on a steel entry door and nearly 78 percent on the price of a fiberglass one. Go even further and choose one for not only its security but also its architectural appeal, and those percentages may go up.

 

BUILDER Magazine article addresses this when schooling homebuilders on how to make a good first impression on the potential buyers of a new construction home. “Something’s missing. It might be hard to place, and yet they encountered it as soon as they entered the room. Though it might be the last item on your checklist, doors are the absolute first impression of any home. At first, doors might seem like an additional embellishment, but in reality, they should never be an afterthought.”

 

Builders and architects tend to think about doors as a way of masterfully pulling the whole home together from the entrance throughout the entire home as an experience of function and form, according to the article. “The perfect front door should complement the rest of the building’s exterior while reflecting a vision of the homeowners to the outside world, requiring it to both feel right and look right.”

 

Even with secondary doors throughout your home’s interior, a mood is set simply by door style: streamlined (solid, tall, flat-panel doors) can make a house feel sleek, modern, and even a bit sexy. Doors with detail can take traditional and transitional into the homey and comfortable realm.

 

Hardware is also a significant element, whether it’s a matte black handle with uncluttered lines, vintage-style crystal knobs with facets, or brushed brass with substantial heft. Today’s modern farmhouse can reflect traditional with updated vibes by sporting traditional-style doors with classic panel designs and decorative glass. Mid-century modern looks, however, often feature a simpler design with stunning wood grains, as if part of the furniture and entry doors often boast tiny or elongated vertical windows in a contemporary pattern for an understated look.

 

The doors in your home (especially the entry door) can either upgrade a space or make that space fall flat. While they may not be the focal point of any room, however, doors never fail to make an impact upon entering any home or any room.

 

 

Source: TBWS

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When an airline executive throws around terms like “revenue per passenger mile” it sounds impressive to us lay people, who picture every air mile having the same dollar sign attached to it. But when a real estate consultant bandies the term “cost per square foot” to discuss a home’s value, it should give you reason to pause and ask a LOT of questions.

 

Like everything else, values lie along a wide spectrum, with no one price per square foot being applied to every property in a neighborhood. While taking the price of a home, dividing it by the square footage of the property, and coming up with the price per square foot sounds easy, it’s also a dangerous way to judge real value — sometimes vastly different from the value a bank appraiser would come up with. In newer neighborhoods, where two or three builders compete for business using the same types of homes, lot sizes and amenities (concrete tile roofs, stucco exteriors, granite countertops, and built-in security systems), price per square foot may be the most meaningful. But in seasoned neighborhoods, where homes have changed owners, features, and attractiveness many times over, and where infrastructure and commercial building has grown up around it for decades, using price per square foot to judge value can be a veritable crap shoot.

 

Just as an appraiser takes detailed note of a structure’s characteristics, condition, location, lot size, quality of upgrades, bed/bath count, size, etc, all have the potential to affect the price per sq. ft. and can can vary wildly. “A small remodeled home selling at $250 per sq. ft., a model match fixer selling at $175 per sq. ft., a short sale model selling at $185 per sq ft, and a home with an adverse location selling at $215 per sq ft. Thus even for one model there could be a price per sq. ft. range from $175 to $250.” says appraiser Bryan Lundquist in a Sacramento Bee article on the topic.

 

Because smaller homes cost more to build, they tend to have a higher price per sq. ft. than larger homes — that is, unless that larger home was completely updated using costly design elements or was built as a custom home with every bell and whistle installed.

 

When your real estate agent talks price per sq. ft. in a particular neighborhood, instead of taking it as an important determining factor, it’s wise to have him or her explain detail what went into that value. Of course, he or she can’t be privy to the kind of information an appraiser can pull out of a hat. “Appraisers, pay close attention to the price per sq. ft. range in a neighborhood. Some appraisers treat price per sq. ft. as a meaningless metric, but it’s actually valuable. If your value does not fall within the range (especially the competitive price per sq ft range), it’s important to be able to explain that,” says Lundquist.

 

Here are some of the most important factors in determining a home’s value:

 

There is a basic house, built for economy, to appeal to those who wish to spend as little as possible to get out of an apartment or their parents’ basement. In these homes, builders are careful to use materials that keep costs down — not necessarily of the greatest quality or desirability, but good enough for the basics so you can swap it all out as your income goes up. This applies to roofing materials, plumbing fixtures, HVAC systems, cabinetry, and flooring. Flat, hollow-core doors are often used throughout. Basic lighting fixtures are adequate but not fancy or even fashionable. Even front yards contain the requisite lawn, single tree, and a few shrubs, but you won’t find meandering walkways, aggregate driveways and coach-like garage doors.

 

Move up in price, and you’ll find homes built with more durable (and attractive) materials. Gone are the Formica countertops, the flat panel doors, the one-tile backsplash in bathrooms and the lower end plumbing fixtures. Cabinets, flooring, and even HVAC systems are more sophisticated, even though the builder may have built these homes with economy in mind as well. What lies behind the walls is important as well — those things you don’t see or notice — the thickness of the insulation, the way the outer walls are wrapped, the types of windows used — even the quality of what the house sits upon —a post tension slab or a raised foundation.

 

Now add custom-built spec, luxury or owner-builder homes to the equation and you’ll find things kicked up several notches, including a slew of elements not found in lower categories. Cabinets and built-ins are custom made. Flooring is the latest in wide-plank hardwood, perhaps laid on the diagonal for eye-appeal, countertops may be marble, quartzite (not quartz) or even elaborately-poured and buffed concrete. Crown molding may be everywhere, and architectural features, such as massive skylights and lofty beamed ceilings make it look like a resort hotel.

 

When you consider these differences, you can see how different types of homes, even in the same neighborhood, can vary widely using the cost-per-square-foot equation as a tool to determine value. The cost of a single room in the luxury home may match that of an entire economy home.

 

Lot size, floor plan, the number of renovations, and especially location, are, of course, huge determining factors as well. One home may have a square footage calculation that includes a finished basement, while the next may not, in which case comparing both homes by their price per square foot becomes useless (below grade square footage is worth much less than above grade space).

 

It’s unfair to pin errors in valuation only on rookie agents who don’t take all this into account, however. Online value estimators (where you fill in the address of a property, and it pops up with an approximate value) can be just as faulty. And appraisals done for refinancing purposes are done differently as well.

 

Experts agree that the only real way to understand the value of any given home is to calculate the value based on the individual home, preferably with the help of a competent real estate professional — those people who do comparable calculations in their sleep and advise sellers on how to price their home. After all, their livelihood depends on their expertise. A seasoned veteran who knows the area and has seen the neighborhood morph into what it is today can estimate the value of a home in a particular area and give you an idea of what it is worth.

 

While a given home may indeed end up being worth what a willing buyer would pay for it, accurate information is the foundation of good real estate deals. Veteran real estate professionals understand that trying to use price per square foot as a means to value a home is not the best bet, since taking into account the unique characteristics of each piece of property and using recent sales of similar homes — such as views, location, finishes, layout, amenities, and styling are all important in determining a home’s true market value.

 

 

Source: TBWS

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You know the drill when you sell a car. Research it on Kelly Blue Book or Edmunds to see what your car’s year, make, model condition and mileage might get price-wise. Get the shopping cart dents popped out and spiff up the exterior and interior, take some tasteful pictures of it, and offer a detailed description of its attributes and features.

 

The Forbes Real Estate Council recommends much of the same approach when selling your home, even when it remains a sellers’ market. The key is remembering the age-old basics of home selling — pricing, presentation, and negotiation.

 

Overpricing your home is a kiss of death in today’s market, according to Forbes’ Beatrice De Jong. “Research homes in the area that have sold recently, and make sure they are actually comparable (i.e., don’t compare a fixer-upper to a newly remodeled house). Check how long local listings are typically on the market for, and adjust your expectations accordingly. Keep your eye on what else is on the market at the same time as your listing — if there is another home that is seen as a better deal, your listing will look less desirable.”

 

Despite going for the highest price possible, strategically its best to list for a lower price and then let bidding buyers jockey for the final number. “Listing at a lower price is common practice in very competitive real estate markets like San Fransisco and Los Angeles. This approach often ends up getting more exposure on the listing since it will show up on more homebuyers’ online feeds,” says De Jong.

 

Presentation is everything, especially in these days of competitive, high-tech digital images and virtual tours. Your listing should not be the exception to that rule. De Jong advises, “Some buyers love a project, but most are hoping to have to do as little work as possible (and keep their budget as low as possible). Keeping the home clean and uncluttered and presenting clear photos will present the home at its best.”

 

When it comes to breaking the budget on staging, there are inexpensive ways to spruce up your house to make it look more appealing, even if it’s to place your clutter and bulkier items in storage. With a cleaner palate, it’s ever for agents to point out all the positive aspects of the home when showing it.

 

An open mind is a beautiful thing when selling your home. Even the most off-the-wall offers can be negotiated, and most will make an offer assuming that you plan to spar with them over price and terms. Rude rejections can result in buyers never returning to try again, even if your house languishes on the market. “Emotions run high on both the buyer and seller side of buying a home, and while it’s important for buyers to not write ridiculously low offers, it’s also key for the sellers to keep from being offended, and try to see if there is some reasoning,” says De Jong.

 

Those magical first two weeks a home has been listed will reveal a lot, especially in more competitive markets. Make sure you observe the basics, and the chances are good that your home will magically sell.

 

Source: Forbes.com, TBWS

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Trade-related news dominated investor sentiment during the week.  Last Monday, news of a bilateral trade agreement between the U.S. and Mexico propelled several stock indexes to new all-time highs including the Nasdaq Composite and S&P 500 indices.  With stocks making new highs, bond prices failed to gain much traction with the yield on the benchmark 10-year Treasury note rising slightly during the week.  Following news of the trade deal between Mexico and the U.S., Canada entered trade discussions with the U.S. but was unable to conclude a new trade deal by a Friday deadline.   Negotiations are scheduled to resume this coming week.

 

In other trade news Thursday, President Trump announced he would move ahead with tariffs on $200 billion worth of Chinese goods as early as this coming week and also said in a Bloomberg interview that the European Union’s (EU) offer to eliminate auto tariffs was “not good enough” and compared the EU’s trade policies to those of China.

 

This tough talk on trade by the president is a negotiating tactic and it will be interesting to see the ultimate outcomes when trade deals are finalized between the U.S. and the EU and China.

 

There were several housing-related news releases during the week.  Tuesday, the latest Case-Shiller Home Price Index from S&P Dow Jones Indices and CoreLogic showed home prices nationwide increased 6.2% for the year through June 2018.  However, this is lower than May’s reading of a 6.4% price gain for the year.  Average home prices for the top 10 metropolitan areas increased 6% and the 20-city composite saw a 6.3% year-over-year gain.

 

David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, remarked “Home prices continue to rise across the U.S.  However, even as home prices keep climbing, we are seeing signs that growth is easing in the housing market.  Sales of both new and existing homes are roughly flat over the last six months amidst news stories of an increase in the number of homes for sale in some markets.”

 

Seattle, Las Vegas and San Francisco continue to have the highest year-over-year gains among all cities in the 20-city index.  Las Vegas took the lead from Seattle with a year-over-year price increase of 13% to Seattle’s 12.8% price increase while San Francisco saw an increase of 10.7%.

 

Wednesday, the National Association of Realtors (NAR) reported Pending Home Sales fell on an annual basis for the seventh consecutive month in July.  The NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, dropped 0.7% in July to 106.2, down from 107 in June.  With June’s decline, the index is down 2.3%.   NAR Chief Economist Lawrence Yun stated “Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity.  It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.  The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.”

 

 

Elsewhere, the latest data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey showed a decline in mortgage applications.  The MBA reported their overall seasonally adjusted Market Composite Index (application volume) fell 1.7% during the week ended August 24, 2018.  The seasonally adjusted Purchase Index decreased 1.0% from the week prior while the Refinance Index fell 3.0% from a week earlier.

 

Overall, the refinance portion of mortgage activity remained unchanged at 38.7% of total applications from the prior week.  The adjustable-rate mortgage share of activity decreased to 6.3% from 6.5% of total applications.  According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance decreased to 4.78% from 4.81% (the lowest rate since the week ended July 20, 2018) with points increasing to 0.46 from 0.42 for 80 percent loan-to-value ratio (LTV) loans.

 

For the week, the FNMA 4.0% coupon bond lost 17.1 basis points to close at $101.813 while the 10-year Treasury yield increased 4.70 basis points to end at 2.860%.  The Dow Jones Industrial Average gained 174.47 points to close at 25,964.82.  The NASDAQ Composite Index advanced 163.56 points to close at 8,109.54.  The S&P 500 Index added 26.83 points to close at 2,901.52.  Year to date on a total return basis, the Dow Jones Industrial Average has gained 5.04%, the NASDAQ Composite Index has advanced 17.47%, and the S&P 500 Index has added 8.52%.

 

This past week, the national average 30-year mortgage rate rose to 4.65% from 4.63%; the 15-year mortgage rate increased to 4.15% from 4.14%; the 5/1 ARM mortgage rate increased to 3.98% from 3.95% while the FHA 30-year rate remained unchanged at 4.37%.  Jumbo 30-year rates eased to 4.33% from 4.34%.

 

Economic Calendar – for the Week of September 3, 2018

 

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

Mortgage Rate Forecast with Chart – FNMA 30-Year 4.0% Coupon Bond

 

The FNMA 30-year 4.0% coupon bond ($101.813, -17.1 bp) traded within a slightly wider 29.7 basis point range between a weekly intraday high of 101.953 on Monday and a weekly intraday low of $101.656 on Wednesday before closing the week at $101.813 on Friday.  Mortgage bond prices took a dip lower to test a solid, triple layer of support Monday through Wednesday from the prior week’s extremely “overbought” position.  Prices then bounced just above the triple support layer formed from the convergence of the 25-day (101.727), 100-day (101.745) and 50-day (101.784) moving averages on Thursday and Friday.  Mortgage bonds are no longer “overbought” and prices appear ready to continue higher from support.  However, a stubborn resistance level found at the 76.4% Fibonacci retracement level at $101.988 has put a manhole cover over any meaningful advances since last May.  This has resulted in bond prices getting squeezed between support and resistance forcing a mostly sideways direction in the market.  This action should continue this week with minimal effect on mortgage rates.

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The stock market recorded moderate gains with the S&P 500 notching another all-time record high on Friday, the first time since January 26th of this year.  Bonds also fared well with U.S. Treasury yields decreasing modestly during the week.  President Trump’s publicly pronounced unhappiness with Federal Reserve Chair Jerome Powell for raising interest rates in addition to voicing his desire for Fed policymakers to keep interest rates low may have helped boost buying demand for Treasuries, sending yields lower.  Because U.S. Treasury yields are substantially higher than many other industrialized nations, U.S. Treasuries remain attractive investments for foreign buyers.

 

President Trump also publicly blamed both the European Union and China of manipulating their currencies to weaken them relative to the U.S. dollar in an effort to boost their exports to the U.S. Although low-level trade talks between the U.S. and China took place in Washington, D.C. during the week, no real progress was made on tariffs and trade.  In fact, last Thursday the U.S. began to enforce an additional 25% in tariffs on Chinese imports ranging from machinery to motorcycles while China retaliated with corresponding tariffs on U.S. products from coal to trucks.  Trade resolutions may not be realized until later in the year when higher-level negotiations are scheduled to take place.

 

Meanwhile, the minutes from the Fed’s July 31–August 1 monetary policy meeting indicated the Fed expects to next raise rates at its September meeting.  Fed officials stated in the minutes that it would likely “soon” be appropriate to raise rates.  There currently is a 96.0% probability rates will be bumped up another 25 basis points on September 26.  Friday, in a speech at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming, Fed Chair Powell defended the gradual pace of the Fed’s rate hikes saying that the “slow increases are appropriate given current levels of inflation and unemployment.”

 

It was a big week for housing news.  Wednesday, the National Association of Realtors reported Existing Home Sales tumbled for the fourth straight month falling to a seasonally-adjusted annual rate of 5.34 million in July, down 0.7% from June.

 

Affordability issues are taking a toll on home buyers, especially for first timers facing ever-increasing prices on lower inventory and seeing home prices increasing faster than their incomes.

 

Total home sales in July were 1.5% lower than the same period a year ago.  The median existing home prices for all housing types increased 4.5% in July to $269,600 – the 77th straight month of year-over-year gains.

 

For sales of existing single-family homes, the median price has climbed 4.6% from a year ago to $272,300.  Unsold inventory remained at a 4.3-month supply, unchanged from June and last July and remaining below the 6.0-month supply typically associated with a more balanced market.

 

Thursday, the Commerce Department reported sales of New Homes fell 1.7% month-over-month in July to a seasonally adjusted annual rate of 627,000.  This was below the consensus forecast of 645,000 and also below an upwardly revised 638,000 (from 631,000) in June.

The median sales price increased 1.8% year-over-year to $328,700 while the average sales price increased 5.9% to $394,300.

Based on the current rate of sales, the inventory of new homes for sale increased to a 5.9-months’ supply, versus 5.2 months in June and 5.8 months in the year-ago period.

Homes priced below $400,000 accounted for 71% of new homes sold in July versus 70% in June.

 

 

Jefferies, LLC economist Ward McCarthy had this to say about the latest housing data.  “Housing activity in general has retreated from levels that were temporarily boosted by 2017 natural disasters –hurricanes and wild fires— that forced displaced households to seek alternative housing.  The housing sector is also undergoing an adjustment to affordability that is less attractive than it was for most of the cycle, as well as changes in the treatment of SALT deductions in the federal tax code.  That is the bad news.  The good news is that there is no evidence of the type of imbalances that could cause a sharp downturn, such as heavy inventories and/or rising mortgage default and delinquency rates.  We also note this is not the first temporary slowdown in housing activity this cycle.”

 

Also on Thursday, the Federal Housing Finance Agency (FHFA) released their latest House Price Index (HPI) showing home prices increased just 0.2% in June from May.  Economist William Doerner said although home prices rose in the second quarter, it was at a much slower pace than previously recorded in the past four years.  “Mortgage rates have increased by more than half a percentage point over the first six months of the year.  Rates are still inexpensive from a historical standpoint, but their bump-up appears to have gently pressed the brakes on house price increases.”

 

Nationally, home prices in all 50 states and the District of Columbia increased since the second quarter last year.

 

 

States with the largest gains are Nevada (+17%), Idaho (+13%), District of Columbia (+11.8%), Utah (+11.3%) and Washington (+11%).

 

States showing the least amount of annual appreciation are North Dakota (+2.1%), Louisiana (+2.3%), West Virginia (+2.3%), Connecticut (+2.4%) and Alaska (+2.6%).

 

Elsewhere, the latest data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey showed an increase in mortgage applications.  The MBA reported their overall seasonally adjusted Market Composite Index (application volume) rose 4.2% during the week ended August 17, 2018.  The seasonally adjusted Purchase Index increased 3.0% from the week prior while the Refinance Index jumped 6.0% higher from a week earlier.

 

Overall, the refinance portion of mortgage activity increased to 38.7% from 37.6% of total applications from the prior week.  The adjustable-rate mortgage share of activity increased to 6.5% from 6.2% of total applications.  According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance was unchanged at 4.81% with points decreasing to 0.42 from 0.43 for 80 percent loan-to-value ratio (LTV) loans.

 

For the week, the FNMA 4.0% coupon bond gained 15.6 basis points to close at $101.984 while the 10-year Treasury yield decreased 5.10 basis points to end at 2.813%.  The Dow Jones Industrial Average gained 121.03 points to close at 25,790.35.  The NASDAQ Composite Index advanced 129.65 points to close at 7,945.98.  The S&P 500 Index added 24.56 points to close at 2,874.69.  Year to date on a total return basis, the Dow Jones Industrial Average has gained 4.33%, the NASDAQ Composite Index has advanced 15.10%, and the S&P 500 Index has added 7.52%.

 

This past week, the national average 30-year mortgage rate fell to 4.63% from 4.64%; the 15-year mortgage rate remained unchanged at 4.14%; the 5/1 ARM mortgage rate decreased to 3.95% from 3.97% while the FHA 30-year rate remained unchanged at 4.37%.  Jumbo 30-year rates eased to 4.34% from 4.37%.

 

Economic Calendar – for the Week of August 27, 2018

 

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

 

Mortgage Rate Forecast with Chart – FNMA 30-Year 4.0% Coupon Bond

 

The FNMA 30-year 4.0% coupon bond ($101.984, +15.6 bp) traded within a narrower 17.2 basis point range between a weekly intraday low of 101.828 on Monday and Friday and a weekly intraday high of $102.00 on Monday before closing the week at $101.984 on Friday.  Mortgage bond prices traded mostly in a sideways direction between technical support provided by the 100-day moving average and overhead resistance from the 76.4% Fibonacci retracement level located at $101.988.  The bond remains on a buy signal from August 10th but is now extremely “overbought” and susceptible to a pullback toward technical support.  However, support is close at hand, so we could see a continuation of a sideways trading pattern without much effect on mortgage rates.  Rates should continue to show stability in the coming week

 

 

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The stock market turned in a “mixed” performance while mortgage bonds and treasuries traded essentially flat on the week.  Both the Dow Jones Industrial Average and S&P 500 were able to advance while the technology-heavy NASDAQ Composite Index posted a modest loss.  Equity markets were influenced by continuing volatility in emerging market currencies, the Turkish Lira in particular.  Other factors included news of renewed trade negotiations between the U.S. and China and economic news of solid retail sales.

 

Thursday and Friday, reports surfaced that the U.S. and China will resume trade negotiations by the end of August.  U.S. and Chinese trade negotiators reportedly now have a goal of ending their trade disagreements ahead of multilateral meetings between President Trump and President Xi of China scheduled for November.

 

In economic news, the Commerce Department reported Retail Sales increased a robust 0.5% in July to easily surpass the consensus forecast of +0.1% and a downwardly revised 0.2% gain in June.  Core Retail Sales, sales excluding autos, gas stations, and building materials stores, rose by an even greater 0.6% and were driven by healthy spending at clothing stores, restaurants and bars, and online purchases.

Last Wednesday in housing, the National Association of Home Builders (NAHB) reported their Housing Market Index (HMI), a gauge of builder opinion on the relative level of current and future single-family home sales, fell slightly lower for August to 67 from last month’s reading of 68.  Readings above 50 indicate a favorable outlook on home sales while those below 50 indicate a negative outlook.

NAHB chairman Randy Noel had this to say “The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations.  However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.”

 

 

On Thursday, the Commerce Department reported Housing Starts increased 0.9% in July to a seasonally adjusted annual rate of 1.168 million.  This was below the consensus forecast of 1.256 million and followed a downwardly revised 1.158 million from an initially reported 1.173 million for June.  However, Building Permits increased 1.5% to 1.311 million.  Although the Permits number was slightly below the consensus forecast of 1.316 million, June’s number was revised higher to 1.292 million from an originally reported 1.273 million.

 

Permits for single-family units increased 1.9% to 869,000 while Permits for multi-unit dwellings increased 0.7% to 442,000.  Regionally, single-family starts were 5.7% lower in the Northeast, 22.3% higher in the Midwest, 2.0% higher in the South, and 10.0% lower in the West.  The number of units under construction at the end of July totaled 1.122 million units.  This is slightly below the second quarter average of 1.123 million, suggesting a slightly negative influence on third quarter GDP forecasts.

 

 

Overall, the fact that single-family starts increased by only 0.9% to 862,000 likely reflect some of the difficulties home builders are facing with higher costs for land, materials, and skilled construction labor.

 

Elsewhere, the latest data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey showed another decrease in mortgage applications.  The MBA reported their overall seasonally adjusted Market Composite Index (application volume) fell 2.0% during the week ended August 10, 2018.  The seasonally adjusted Purchase Index dropped 3.0% from the week prior while the Refinance Index remained unchanged from a week earlier.

 

Overall, the refinance portion of mortgage activity increased to 37.6% from 36.6% of total applications from the prior week.  The adjustable-rate mortgage share of activity decreased to 6.2% from 6.3% of total applications.  According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance dropped to 4.81% from 4.84% with points decreasing to 0.43 from 0.45 for 80 percent loan-to-value ratio (LTV) loans.

 

For the week, the FNMA 4.0% coupon bond gained 1.5 basis points to close at $101.828 while the 10-year Treasury yield decreased 0.90 of one basis point to end at 2.864%.  The Dow Jones Industrial Average gained 356.18 points to close at 25,669.32.  The NASDAQ Composite Index fell 22.78 points to close at 7,816.33.  The S&P 500 Index added 16.85 points to close at 2,850.13.  Year to date on a total return basis, the Dow Jones Industrial Average has gained 3.84%, the NASDAQ Composite Index has advanced 13.22%, and the S&P 500 Index has added 6.60%.

 

This past week, the national average 30-year mortgage rate remained unchanged at 4.64; the 15-year mortgage rate rose to 4.14% from 4.13%; the 5/1 ARM mortgage rate increased to 3.97% from 3.95% while the FHA 30-year rate remained unchanged at 4.37%.  Jumbo 30-year rates eased to 4.37% from 4.40%.

 

Economic Calendar – for the Week of August 20, 2018

 

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

 

Mortgage Rate Forecast with Chart – FNMA 30-Year 4.0% Coupon Bond

 

The FNMA 30-year 4.0% coupon bond ($101.828, +1.50 bp) traded within a narrow 25.0 basis point range between a weekly intraday low of 101.641 on Tuesday and a weekly intraday high of $101.891 on Wednesday and Friday before closing the week at $101.828 on Friday.  Mortgage bond prices retreated slightly on Monday and Tuesday before recovering essentially to where they began the week during Wednesday through Friday.  Prices are trending along a convergence of the 25-day, 50-day, and 100-day moving averages that act both as technical support and resistance.  The bond is neither “overbought” nor “oversold” while remaining on a ‘buy” signal so we could likely see more of the same recent pattern where prices trend in a sideways direction with the above-mentioned major moving averages.  Continue to look for stable to slightly improved mortgage rates this coming week.

 

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Is the monthly payment more important than the total price of a home? from CNBC.

Is the monthly payment more important than the total price of a home?
Mark Fleming of First American says rising mortgage rates, home price appreciation and lack of new homes may be combining to put the squeeze on affordability.
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Another wave of trade disputes ignited by a somewhat unusual situation unsettled the stock and currency markets late in the week.  In a dispute with Turkey over that country’s jailing of an American pastor, President Trump announced the U.S. would be doubling its tariffs on steel and aluminum imports from Turkey.  This led to a significant currency decline in the Turkish lira which spilled over into other emerging market currencies.  This in turn led to lower equity markets in the U.S. and elsewhere globally.  Furthermore, the trade “war” between the U.S. and China continued to escalate with China announcing new tariffs on $16 billion worth of U.S. imported goods.  These geopolitical trade events promoted a modest “flight to safety” in U.S. Treasuries on Friday to push the yield on the 10-year Treasury note down to its lowest level in almost a month.

 

Meanwhile, second-quarter corporate earnings reports continue to be mostly better than expected among analysts.  According to the latest data from FactSet Research Systems, a financial data and software company catering to investment professionals, earnings for S&P 500 Index companies have grown 24.6% over the same quarter a year ago while keeping pace with the first quarter’s results which were the best earnings growth in nearly eight years.

 

In housing, the latest data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey revealed last Wednesday showed a decrease in mortgage applications.  The MBA reported their overall seasonally adjusted Market Composite Index (application volume) fell 3.0% during the week ended August 3, 2018.  The seasonally adjusted Purchase Index decreased 2.0% from the week prior while the Refinance Index decreased by 5.0% from a week earlier to its lowest level since December 2000.

 

Overall, the refinance portion of mortgage activity decreased to 36.6% from 37.1% of total applications from the prior week.  The adjustable-rate mortgage share of activity decreased to 6.3% from 6.4% of total applications.  According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance remained unchanged at 4.84% with points remaining unchanged at 0.45.

 

For the week, the FNMA 4.0% coupon bond gained 14.1 basis points to close at $101.813 while the 10-year Treasury yield decreased 7.95 basis points to end at 2.873%.  The Dow Jones Industrial Average lost 149.44 points to close at 25,313.14.  The NASDAQ Composite Index added 27.09 points to close at 7,839.11.  The S&P 500 Index fell 7.07 points to close at 2,833.28.  Year to date on a total return basis, the Dow Jones Industrial Average has gained 2.40%, the NASDAQ Composite Index has advanced 13.55%, and the S&P 500 Index has added 5.97%.

 

This past week, the national average 30-year mortgage rate declined to 4.64% from 4.72%; the 15-year mortgage rate fell to 4.13% from 4.18%; the 5/1 ARM mortgage rate dropped to 3.95% from 4.00% while the FHA 30-year rate fell to 4.37% from 4.42%.  Jumbo 30-year rates eased to 4.40% from 4.48%.

 

Economic Calendar – for the Week of August 13, 2018

 

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

 

 

Mortgage Rate Forecast with Chart – FNMA 30-Year 4.0% Coupon Bond

 

The FNMA 30-year 4.0% coupon bond ($101.813, +14.1 bp) traded within a narrow 39.0 basis point range between a weekly intraday low of 101.516 on Wednesday and a weekly intraday high of $101.906 on Friday before closing the week at $101.813 on Friday.  Mortgage bond prices dipped slightly lower mid-week before turning higher toward resistance levels to end the week.  While the bond is no longer “oversold,” there is room for prices to run higher before becoming “overbought.”  So, we could likely see prices push higher this coming week to challenge resistance levels at the 25-day, 50-day and 100-day moving averages which are in close proximity to one another.  Bottom line, the technical chart continues to suggest there will be stable to slightly improved mortgage rates this coming week.

 

 

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Is there ever a question you CAN’T ask a Realtor? Never. When it’s your future and your money at stake, you owe it to yourself to pose any questions that eat at your gut, so ask away. With the help of ImagineYourHouse.com’s Lynna Pineda, we’ll answer a few common ones for you, but we think you’ll get the idea.

 

Do I really need to replace my carpeting before the first open house?

 

If it’s worn, smelly, discolored or worn out and YOU were a potential buyer walking through your house for the first time, how would you react? Buyers think about two things when they tour a property that has not been updated or repaired: time and money.

 

We are smokers. Do we really have to worry about what our home smells like?

 

Looking at online photos of your home show one thing. Walking through the front door and smelling the smoke that has permeated your flooring, drapery, cabinets and even furniture are an entirely different experience. Many a buyer will turn on their heels right there in your entryway and head for the next listing. So yes. Be concerned. Be very concerned.

 

Is it okay to decorate my home for the holidays while it’s on the market?

 

Absolutely. ’Tis the season. But if you are prone to filling every nook and cranny with happy Santas, hanging stars and extra Christmas trees, this is the time to scale back. You’ll obscure spaces that might otherwise be considered spacious.

 

Does having a dog make my house harder to sell?

 

Not if you’ve already dealt with and remediated (1) doggie odors (2) doggie damage and (3) your furry friend’s tendency to bark or scare homebuyers.

 

Can I keep my displays of vintage guns, religious paintings, and my grandmother’s doll collection while my house is on the market?

 

If you hope to get the highest prices and sell your home in the shortest length of time, remove as many of these things as possible so the widest range of buyers walking through there will not be distracted. It’s a great idea to pack them up early and have them waiting to grace the interior of your next home.

 

 

Source: Imagineyourhouse.com, , TBWS

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