From neighbor Sam - "Reverse mortgages require a lot of forward thinking before committing". A sobering article from the Washington Post. It is something that is not going away due to the demographics of our country. Know what your doing. A great place to get more information is the Consumer Financial Protection Bureau website http://www.consumerfinance.gov/
From Elliott D. Pollack & Company:
According to the Cromford Report, the resale market in Greater Phoenix slowed in November month over month. While the number of listings grew 1.7% from October, resales were down 18.5% from October. However, sales are still up 5.8% from a year ago.
Resale pricing has continued to appreciate and currently stands 9.6% above a year ago. New home prices have softened somewhat and stand 1.7% below last year.
The significant spread between the median price and new home price of an existing home persisted in November. The prices were $307,561 for new homes and $207,700 for an existing home. That puts the ratio at 148.1 compared to the pre-2009 average of about 120. The peak was in 2011 when, due to the large numbers of foreclosures and short sales, the ratio reached 200.
Be Prepared for Google to assist with finding you a lender. Change in our real estate - lending industry is warp speed. Read it here "Google launches mortgage comparison tool with Zillow"
From the Scottsdale Association of Realtors:
FHA Makes It Easier to Get Condo Loans
FHA is making it easier for buyers to get financing for condo purchases. First, it no longer considers second homes as investment properties that count against the 50-percent owner-occupancy limit. Second, homeowner associations can use a wider variety of insurance types to meet coverage requirements. And third, recertification of condo boards is made easier.
From Elliott Eisenberg:
After closely observing three pre-agricultural groups, one from Tanzania, one from southern Africa and one from Bolivia, researchers learned that these peoples averaged 6.5 hours of sleep/day. Moreover, the groups stayed awake for an average of 3.3 hours after nightfall, rarely napped in the afternoon and barely suffered from insomnia. This suggests that coffee, electricity and modernity haven't, contrary to popular belief, led to systematic sleep deprivation.
From Stuart Crawford at VIP Mortgage:
Last week was packed with major economic news, with the biggest story coming from Europe. On Thursday, the ECB (European Central Bank) added less stimulus than expected, causing global bond yields to increase sharply. Then at the end of the week we had the release of the “Jobs Data” which showed continual strength domestically. Both of these events caused mortgage rates to move in an upward trend, and rates ended the week higher.
The ECB announced additional stimulus measures, but the package was smaller than investors had expected. The ECB cut rates and will extend its bond purchase program by six months, but the quantity of monthly purchases will remain at $60 billion euros. Investors were looking for a large expansion of this figure, and the smaller than expected package means less added demand for bonds (and bond yields around the world) including U.S. mortgage-backed securities, moved higher on the news. This caused mortgage rates to move higher.
While Europe and most other countries are adding stimulus, the Fed is beginning a cycle to tighten monetary policy (hence all the talk about them raising rates). This has raised the value of the U.S. dollar, which increases the cost of U.S. goods for foreign consumers and hurts the U.S. manufacturing sector. This was seen on Tuesday as the ISM national manufacturing index unexpectedly dropped to the lowest level since 2009. Slower economic growth is positive for mortgage rates, because it reduces inflationary pressure, and this report caused rates to move lower.
Friday's important employment report was stronger than expected. Against a consensus forecast of 190K, the economy added 211K jobs in November. Upward revisions to prior months added another 35K. The Unemployment Rate remained at 5.0%. Average hourly earnings, a proxy for wage growth, were 2.3% higher than a year ago. The report caused major market volatility, and rates bounced up on Friday. The solid labor market data made investors nearly certain that the Fed will hike rates at the next meeting on December 16th….but only time will tell if this is going to actually happen.
This week, the second biggest report of the month, Retail Sales, will be released on Friday. Retail sales account for about 70% of economic activity so it is always an important indicator of how the economy is doing. As always we will closely monitor the markets for our clients to ensure we are guiding on the best rate lock strategy.
Stuart can be reached at 480.776.2954