Mortgage Interest Rate Prediction for remainder of 2017

Stock Market words on a thermometer to illustrate rising prices and values of investments

Inflation is a key indicator for where mortgage rates are headed.  In simple terms, when prices of goods and services go up, investors of mortgage backed securities lose return.  That is why when prices rise, so too do interest rates.  The last report on inflation saw a slight drop; from 1.8% to 1.4% from January to May.   With three jumps in interest rates this year, many projected a steady increase, but recently mortgage rates dropped slightly.  While I’m not a prognosticator of interest rates, all signs from here to about December 2017 look like they will remain very low, perhaps even a slight decrease.   That is good news for borrowers; especially the huge number of millennials that are taking advantage of low down payment mortgages and looser credit guidelines.

Inventory is getting better.  After three consecutive months, pending home sales reversed course in June in all major regions of the United States with the exception of the Midwest.  Almost all regions saw an increase in contract activity according to the National Association of Realtors®.

How about some more good news?  As I’m writing this blog the Dow Jones Industrial average hit a record high, approaching the 22,000 mark; powered largely by Goldman Sachs, JP Morgan Chase and a few others.

The economy certainly is showing signs of legitimate growth built on the right foundation.  Unemployment numbers SHOULD be next to improve and if and when that happens, we should see a solid run of economic prosperity.

If you are considering a real estate purchase or are considering getting a mortgage, now is a very good time to act.  You have to simply balance the prices of real estate and interest; but when you look at an amortization schedule you quickly place the value of low interest rates over slightly higher real estate prices.  Please let me know if I can help you in any way or if you simply have any questions you need answers to.

 

Generation Rent is Ready for Home Ownership!

Millenials ready to purchaseMillennials are ready to purchase homes finally; after 10 years of declining numbers according to a University of Southern California study.  This is fantastic news for the housing market and fantastic news for millennials as they shift from renting to owning.  A certain shift from 2014 when Pew research reported that for the first time in 130 years, individuals between the ages of 25-44 were more likely to be living with their parents vs. owning a home.

One of the stunning statistics I came across reading a Bank of America study was total lack of understanding of what is actually available to millennials; their perceptions of what it took to own a home was incredible; here’s what it showed:

-30% of millennials believed they need 20% down to get a mortgage

-31% believed they needed 10% down

-Only 5% believed they needed 5%

-6% were simply unsure

That represents 72% of all millennials!  Yet most millennials that do in fact obtain a mortgage pay around 3%!

Until recent times, the factors that contributed to both the realities as well as poor perceptions of one’s ability to own a home were:

  1. Increase in Debt
  2. Unemployment rate
  3. Increase in rental costs leading to decrease in ability to save for a down payment
  4. Credit requirements after the mortgage meltdown
  5. Lower inventory of starter homes
  6. Getting married later- lack of dual incomes to go on mortgage

As I wrote in a prior blog, times are changing for the good.  It’s amazing what a positive outlook does for politicians, investors/Wallstreet, business owners and of course, the stock market.   Low down and no down payment mortgages are truly helping millennials obtain their goals

My advice to the millennials is simple: roll up your sleeves, get with someone that truly knows what they are talking about and define your point “A”.  Meaning, if you want to own a home, don’t be embarrassed about anything: what your bank account says, what your credit score is or what limitations you think you might have.  It’s important to get it all out on paper; some may find themselves in their own home right away, some very soon and for the rest, they are left with a clear path to point “B”, an exact game plan.

Next week I will reviewing interest rates and inventory; thanks for reading!

Tax Liens and Judgements to Come Off Credit Reports

Tax Liens and Judgements to Come Off Credit ReportsTax Liens and Judgements to come off many consumer’s credit report

Effective July 1st, 2017, Transunion, Equifax and Experian will be excluding tax liens and some civil debts/judgements from consumer’s credit reports. The Consumer Data Industry Organization has stated that this initiative is to ensure consumer identifications are accurate and current.

In a move that will boost many consumers credit scores, the three main credit reporting agencies will remove tax liens and civil debts if reports on those particular obligations do not include: names, addresses, and social security numbers and/or date of birth according to the CDIA.

Federal law requires that accurate information is provided to ensure accurate credit reporting. Consumers have complained that paid debts are still appearing on their credit report. The National Consumer Assistance Plan will help consumers with prior challenges to obtain loans they otherwise may have been declined.

This is really good news for the housing market obviously, as this news will have an immediate impact on about 10% of Americans. Couple this information with my prior blog on low down/no down payment mortgages and you end up with great news for many people. With the Dow over 20,000, looser credit guidelines and this recent news on credit reporting; times are looking pretty good.