30 year rate falls

Mortgage rates fall a bit – 30-year at 3.88%

WASHINGTON – Oct. 19, 2017 – Long-term U.S. rates slipped this week, reversing two straight weekly increases.

Mortgage buyer Freddie Mac says the average rate on 30-year, fixed-rate mortgages fell to 3.88 percent from 3.91 percent last week. A year ago, the benchmark rate stood at 3.52 percent.

The rate on 15-year, fixed-rate mortgages, popular with homeowners who are refinancing, dipped to 3.19 percent from 3.21 percent last week. A year ago, the 15-year rate was 2.79 percent.

Long-term home loan rates tend to track the yield on 10-year U.S. Treasury notes, which fell this week.

The average rate on five-year adjustable-rate home loans rose to 3.17 percent this week from 3.16 percent last week and 2.85 percent a year ago.

The Federal Reserve, citing an improved outlook for the U.S. economy, has raised short-term interest rates twice this year and is expected to raise them again at its December meeting.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee on 15-year loans also remained at 0.5 point.

The fee on adjustable five-year loans stayed at 0.4 point.

AP Logo Copyright © 2017 The Associated Press, Paul Wiseman, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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So the more money you have the more affordable something is? Never knew.

Rents statistically more affordable as renters get richer

NEW YORK – Oct. 13, 2017 – Following the Great Recession, the cost of rental housing took a growing bite out of U.S. household budgets, as increasing demand for rental units pushed up prices. Now the share of households considered burdened by high rents is falling, according to a report from New York University’s Furman Center for Real Estate & Urban Policy.

That’s good news. But the dynamics driving improved affordability are a mixed bag.

One reason for the shift is that wealthier families are increasingly likely to rent, allowing landlords to raise prices without raising the risk that their tenants won’t pay. The number of households that spend 30 percent of their income on rent (considered cost-burdened) and the share that spend half their income on rent (considered severely cost-burdened) are still historically high.

Twenty-one percent of households earning at least 120 percent of the area median income rented in 2015, up from 15 percent in 2006; families with children and households where at least one member has a bachelor’s degree also became more likely to rent over the course of the decade.

“More people are choosing to rent, and disproportionately so among the higher-education, higher-income groups,” said Sewin Chan, a professor of public policy at NYU and co-author of the report. “It seems extremely likely that they’re driving up rents.”

Not all cities benefited from better affordability; of 53 metros with at least 1 million people, one in three recorded an increase in the number of cost-burdened households. Fifty-nine percent of Miami renters spent at least 30 percent of their income on rent, the highest in the U.S.

One positive from the report is that rental affordability improved across income levels, with the rent-burden rate falling fastest for households earning between 50 percent and 80 percent of their area median income. Those earning less than half their median area income saw more modest improvement, though, and there’s currently a shortage of more than 7 million housing units affordable to the poorest U.S. households, according to the National Low Income Housing Coalition.

Households that moved, meanwhile, probably saw their rent go up. Across the 53 metros included in the Furman Center report, households that had moved in the 12 months preceding the Census Bureau’s 2015 American Community Survey reported paying rents that were 5 percent higher than the renter population at large. But renters in the big metros shown in the chart above faced much steeper hikes.

Copyright © 2017 Bloomberg L.P; and © 2017 Penton Media; Patrick Clark, Peter Jeffrey, editor

I have some crytocurrency for sale. Want some?

SEC: REcoin cryptocurrency is a fraud

WASHINGTON – Oct. 5, 2017 – The U.S. Securities and Exchange Commission (SEC) alleges that a type of “cryptocurrency,” called REcoin, was touted for the real estate industry, but it’s a fraud designed to dupe investors out of money.

Cryptocurrency is a “digital or virtual currency that uses cryptography for security.” The most famous example is Bitcoin, which has been used in real estate transactions.

The REcoin Group launched REcoin in July with an “initial coin offering” (ICOs), which is the first offering of its digital currency. It touted REcoin as the “first ever cryptocurrency backed by real estate.”

The company said REcoin was a “new, proprietary cryptocurrency designed for a broad range of financial transactions.” It claimed it was backed by “real estate held by 101REcoin Trust in countries with a developed and stable economy, such as the U.S., Canada, Japan, Great Britain and Switzerland.”

As reported by HousingWire, the SEC announced last week that it charged REcoin and the company’s founder, Maksim Zaslavskiy, with defrauding investors by selling unregistered securities and selling digital tokens or coins that didn’t really exist. SEC’s complaint states that the REcoin Group doesn’t have any real operations in place.

After the company launched, the SEC says it announced plans to run several “partner platforms” for investors, including an online auction platform for the sale and lease of real estate; a service for finding and offering real estate services; a news site dedicated to real estate; a classified ads platform designed specifically for real estate professionals; and an online platform for crowdfunding in real estate.

“Investors should be wary of companies touting ICOs as a way to generate outsized returns,” Andrew Calamari, director of the SEC’s New York regional office, told HousingWire. “As alleged in our complaint, Zaslavskiy lured investors with false promises of sizeable returns from novel technology.”

Source: “SEC Says ‘First Ever Cryptocurrency Backed by Real Estate’ Is a Fraud,” HousingWire (Oct. 2, 2017)

© Copyright 2017 INFORMATION INC., Bethesda, MD (301) 215-4688

Congress can never make things easy.

Tax reform: Deduct property taxes or mortgage interest?

WASHINGTON (AP) – Oct. 4, 2017 – Homeowners would be forced to choose between two popular tax deductions – one for local property taxes, the other for mortgage interest – under a potential compromise that House Republicans are considering as they craft the evolving tax revamp.

The nearly $6 trillion tax overhaul plan being pushed by President Donald Trump and Republican leaders in Congress promises to retain the deduction of mortgage interest from federal income taxes – a cherished tax break used by about 30 million Americans that supporters say is a catalyst to homeownership.

Republicans in high-tax states such as New York, New Jersey and California are balking at the proposal from Trump and GOP leaders to eliminate the federal deduction for state and local taxes, fearing the financial hit on their constituents.

The possible deduction tradeoff is among several compromises being floated by Republican lawmakers to gain the support of their defecting colleagues from high-tax states. Their opposition threatens to derail tax legislation that’s seen as a political imperative for Republicans and Trump.

Rep. Chris Collins, R-N.Y., said Tuesday he and several other Republicans discussed possible ways around the current impasse on Monday with Rep. Kevin Brady, R-Texas, who heads the tax-writing House Ways and Means Committee.

“It looks like we’re going to have some compromise” on state and local tax deductions, Collins said Tuesday at the Capitol. “I am confident there will be an accommodation for the high-tax states.”

But Republican Sen. Tim Scott of South Carolina, a member of the Senate’s tax-writing Finance Committee, wasn’t sold on the deduction tradeoff idea.

“What does it save and where does it get us? Should the average South Carolinian subsidize the high property taxes in other states?”

Scott noted that the state and local deduction costs the government an estimated $1.3 trillion in lost revenue over 10 years. It covers local property taxes and state income taxes. With more than $1 trillion having to be mined from closing loopholes and ending deductions to finance the Republican plan’s sweeping tax cuts, regional divisions within the GOP have jumped to the fore.

The high-tax, high-income states – New York, Connecticut, New Jersey and California – that urgently want to preserve the state and local deduction are Democratic strongholds, but with plenty of Republican lawmakers. A coalition of 70 lawmakers from those so-called blue states, including 20 Republicans, are fighting the proposed repeal of the deduction, arguing it would subject people to being taxed twice.

Collins said other possibilities discussed with Brady included “some either-ors” like the home deduction tradeoff and “maybe some capping.” That could mean limiting the amount homeowners could deduct on their local property taxes, for example, to correspond with a maximum $1 million of the home’s value, he suggested. Or further reducing the cap on the federal mortgage interest deduction, which currently allows homeowners to deduct interest on up to $1 million in mortgage debt.

Changes like those “would take the argument that this is a tax cut for the rich off the table,” Collins said.

Trump, top administration officials and Republican architects of the plan insist that it would provide badly needed tax relief for the middle class – and wouldn’t benefit the wealthy.

The wealthiest sliver of the nation would reap big benefits, however. The plan would drop the tax rate for Americans making a half-million dollars or more by almost 5 percentage points. And the blueprint calls for eliminating the estate tax – paid by those with multimillion-dollar inheritances, a boon for wealthy individuals who inherit businesses, investments and real estate. Also slated for elimination is the alternative minimum tax, a supplemental tax for wealthy individuals and corporations that enjoy exemptions lowering their income tax bills.

AP Logo Copyright © 2017 The Associated Press, Marcy Gordon. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

So basically you don’t know.

The problem with Economist’s is they look at data and assume things.  They  don’t live in the world they are trying to figure out.  How does an economist get of a deserted island?   They assume they have a boat.  (Finance humor)

Yellen: Fed perplexed by chronically low inflation

CLEVELAND (AP) – Sept. 27, 2017 – Federal Reserve Chair Janet Yellen acknowledged Tuesday that the Fed is puzzled by the persistence of unusually low inflation and that it might have to adjust the timing of its interest rate policies accordingly.

Speaking to a conference of economists, Yellen touched upon key questions the Fed is confronting as it tries to determine why inflation has remained chronically below its target of 2 percent annually. The Fed chair said officials still expect the forces keeping inflation low to fade eventually. But she conceded that the Fed may need to adjust its assumptions.

In noting the persistence of low inflation, Yellen suggested that the Fed will take care not to raise rates too quickly. But she also said the central bank should avoid raising rates too slowly. Moving too gradually, she suggested, might eventually force the Fed to have to accelerate rate hikes and thereby elevate the risk of a recession.

Most analysts expect the central bank to raise rates in December, for a third time this year, in a reflection of economic improvement. But the Fed has said its rate hikes will depend on incoming data.

In her speech in Cleveland to the annual conference of the National Association for Business Economics, Yellen went further than she has before in suggesting that the Fed could be mistaken in the assumptions it is making about inflation.

“My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective or even the fundamental forces driving inflation,” Yellen said.

The Fed seeks to control interest rates to promote maximum employment and stable prices, which it defines as annual price increases of 2 percent. While the Fed has met its goal on employment, with the jobless rate at 4.4 percent, near a 16-year low, it has continued to miss its inflation target.

Chronically low inflation can depress economic growth because consumers typically delay purchases when they think prices will stay the same or even decline.

Inflation, which was nearing the 2 percent goal at the start of the year, has since then fallen further behind and is now rising at an annual rate of just 1.4 percent.

Yellen has previously attributed the miss on inflation this year to temporary factors, including a price war among mobile phone companies. She and other Fed officials have predicted inflation would soon begin rising toward the Fed’s target, helped by tight labor markets that will drive up wage gains.

In her remarks Tuesday, Yellen said this outcome of a rebound in inflation is still likely. But she said the central bank needed to remain alert to the possibility that other forces not clearly understood might continue to keep inflation lower than the Fed’s 2 percent goal.

The Fed chair cautioned that if the central bank moved too slowly in raising rates, it could inadvertently allow the economy to become overheated and thus have to raise rates so quickly in the future that it could push the country into a recession.

“It would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” Yellen said.

During a question-and-answer session, Yellen said the Fed would be “looking at inflation very carefully” to determine the timing of upcoming rate hikes. But she said the data is likely to be difficult to assess, in part because of the effects of the recent devastating hurricanes, which have forced up gasoline prices.

Yellen’s remarks came a week after Fed officials left their benchmark rate unchanged but announced that they would start gradually shrinking their huge portfolio of Treasury and mortgage bonds. Those holdings had grown from purchases the Fed made over the past nine years to try to lower long-term borrowing rates and help the U.S. economy recover from the worst downturn since the 1930s.

The Fed did retain a forecast showing that officials expect to boost rates three times this year. So far, they have increased their benchmark lending rate twice, in March and June, leaving it at a still-low range of 1 percent to 1.25 percent.

Last week, the Fed said the reductions in its bond holdings would begin in October by initially allowing a modest $10 billion in maturing bonds to roll off the $4.5 trillion balance sheet each month.

Asked about how long-term loan rates might respond to reductions in the Fed’s bond portfolio, Yellen cited a study that estimated that the increase in its bond holdings had lowered such rates by about 1 percentage point.

But she said the reduction in the holdings wouldn’t likely raise rates by as much as a percentage point given that the Fed intended to keep the size of its balance sheet significantly higher than it was before the financial crisis. She said any upward pressure on rates would likely be gradual and take place over several years.

Later Thursday, Yellen toured a job training center operated by Cuyahoga Community College and participated in a roundtable with students, faculty and potential employers.

Yellen, who has visited a number of job centers during her time as Fed chair, told the group that job training was especially important now as employers find it harder in a tight labor market to find workers with the necessary skills.

AP Logo Copyright © 2017 The Associated Press, Martin Crutsinger and Dake Kang. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Crutsinger reported from Washington.

 

 

I Don’t Think So.

Buy a home using bitcoin? Is that even possible?

NEW YORK – Sept. 22, 2017 – Nearly half of Americans are unsure of the legality of bitcoin, a new study this week suggests, yet a loyal group of its advocates embrace it as a symbol of financial and philosophical freedom.

“I believe there is a strong chance that it may someday revolutionize significant parts of our financial infrastructure,” says Aaron Hanson, a software engineer from Chicago.

Hanson uses bitcoin wherever he can – to buy food at an empanada restaurant, airline tickets, his honeymoon in Africa this year – listing it alongside technology and individual freedom as his three beliefs in life.

Austin Craig, a practicing Mormon who attended Brigham Young University, went a step further: He lived entirely on bitcoin during the first three months of his marriage and chronicled it in a documentary, Life On Bitcoin.

“Mormons are descendants of pioneers who carved their livelihood out of the wilderness,” he says, describing the cryptocurrency’s appeal to members of The Church of Jesus Christ of Latter-day Saints. “There is a strong element of rugged individuals, self-sufficiency.”

Welcome to the mind-set of a typical bitcoin owner. For many, it is a lifestyle, something to be valued more than gold for financial investments and shielding personal information from the prying eyes of a distrusted government.

Most Americans (78.5%) are familiar with the cryptocurrency, according to a survey of 1,000 Americans by LendEDU, a personal-finance comparison site. But 48% aren’t sure it’s legal, and 11% consider bitcoin ownership illegal in the U.S.

Still, 40% were open to using bitcoin in the future, says Michael Brown, research analyst at LendEDU.

For those with any doubt about the digital currency, they need look no further than its true believers, who have embraced bitcoin as a way of life and help drive its prices to record highs, causing some analysts to warn of a bitcoin bubble.

The digital currency, whose finite quantities are created by computer programs, trades outside the traditional financial system, an attraction for people who have doubts – or at least seek an alternative – to mainstream institutions.

“There’s certainly a libertarian feel” to the beliefs of bitcoin users, says Melanie Shapiro, CEO of Token, an identity-ring maker in New York. “But we’re technologists, and technology provides freedom” from centralized government systems.

Their long-term passion and principles have paid off handsomely: Bitcoin closed Tuesday at $4,009 per token – twice its price in July and significantly more than when Shapiro and her husband bought it for just $2 in 2011.

The currency, which surfaced in early 2009 from someone using the name of Satoshi Nakamoto, has slowly evolved from cult curiosity to widespread lifestyle choice, with elements of political and religious fervor.

What began as a currency championed by libertarians advocating decentralized currency or criminals trying to avoid law enforcement has been embraced by venture capitalists and investors. It’s not mainstream yet – too many people are wary of its high risk and complicated tools – but it’s getting there.

“It is the first global, highly liquid form of currency,” says Mike Jones, CEO of Science, an incubator that owns and trades cryptocurrency. “Much more so than gold. It is about opening financial markets globally.”

“It is digital gold,” says Overstock CEO Patrick Byrne, whose online retailer was one of the first to accept bitcoin payment.

There is a “doomsday sentiment” among many bitcoin users, who horde the currency along with non-perishable food and drinks in the event of an emergency.

Byrne’s Salt Lake City-based company has stockpiled several million dollars worth of cryptocurrency, $12 million in gold and a 30-day supply of food to feed all of its 2,000 employees there.

(Byrne is convinced the U.S. dollar will dramatically weaken, as has currency in Venezuela, because of a crippling debt, thus strengthening bitcoin and other digital currency.)

That, in part, is motivation for bitcoin fanatics – but not the entire story, financial analysts say.

“Devotees are motivated less by (the) financial (aspect) than their passion for distributing power to the masses,” says Jawad Ansari, managing director of investment firm Boustead Securities.

Copyright 2017, USATODAY.com, USA TODAY, Jon Swartz

It’s official: Fed will start selling bonds

WASHINGTON – Sept. 21, 2017 – The U.S. economy is finally sturdy enough for the Federal Reserve to withdraw the extraordinary support it has provided it since the depths of the recession and financial crisis.

In a move that that could nudge consumer borrowing costs higher, the Fed agreed Wednesday to begin gradually shedding much of the roughly $3.5 trillion in bonds it snapped up during and after the downturn to lower long-term interest rates.

“We’re working down our balance sheet because we think in some sense it’s no longer needed,” Fed Chair Janet Yellen said at a news conference. “We feel the U.S. economy is performing well.”

And while the Fed held its key short-term interest rate steady, at a range of 1 percent to 1.25 percent, it maintained its forecast for a third rate hike in 2017 and three increases next year. But in a nod to weak inflation, the Fed cut its projection from three rate increases to two in 2019. By 2020, the Fed expects its benchmark rate to be 2.9 percent, and it trimmed its estimate of the rate over the longer run to 2.8 percent from 3 percent.

Higher interest rates would push up costs for everything from car loans and mortgages to business loans. Fed officials, however, have indicated they could forgo another rate increase late this year if inflation doesn’t accelerate. The Fed lowered its inflation forecast for this year to 1.5 percent from 1.7 percent in its June estimate and to 1.9 percent next year from its prior projection of 2 percent.

“If the (inflation) shortfall is persistent, it will be necessary to adjust monetary policy to address that,” Yellen said.

“Storm-related disruptions and rebuilding will affect economic activity in the near-term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term,” the Fed said in a statement following the meeting.

Despite the impact of the hurricanes, the Fed now expects the economy to grow 2.4 percent this year, up from its prior forecast of 2 percent.

The storms are expected to reduce third-quarter economic growth to about 2.2 percent from 2.7 percent, economists say, with much of the loss made up in the fourth quarter.

The Fed’s road map also could be redrawn if its leadership is overhauled. Fed Vice Chair Stanley Fischer has announced he’ll step down next month. And Yellen’s term expires in February, though President Trump has said he hasn’t ruled out reappointing the Democrat. Trump also must fill three other vacancies on the Fed’s board of governors.

Meanwhile, the widely expected shrinking of the Fed’s bloated balance sheet marks a milestone for the 8-year-old economic recovery. From 2008 to 2014, the Fed purchased more than $3.5 trillion in Treasury bonds and mortgage-backed securities in a campaign to lower long-term interest rates and stimulate a listless economy, swelling its balance sheet to $4.5 trillion.

The unprecedented program was widely credited with staving off a potential depression and has been mimicked by several major central banks around the globe. But with the U.S. economy on solid footing, Fed officials worry the low rates are encouraging investments in higher-yielding assets, increasing the risk of bubbles that eventually may pop.

Copyright 2017, USATODAY.com, USA TODAY, Paul Davidson

CoreLogic: Mortgage fraud on the rise

NEW YORK – Sept. 20, 2017 – A growing share of purchase-money and wholesale lending has helped to push up the risk of mortgage fraud. Also contributing were jumbo refinances.

There was some indication of mortgage fraud on an estimated 13,404 applications for single-family loans during the second quarter of this year. That worked out to 0.82 percent of all residential loan applications that were submitted during the three-month period.

Deterioration was noted compared to the second-quarter 2016, when just 12,718 applications – or 0.70 percent – were estimated to contain mortgage fraud.

Those were some of the findings from CoreLogic Inc.’s Mortgage Fraud Report.

The year-over-year deterioration was “relatively large,” according to Bridget Berg, principal, Fraud Solutions for CoreLogic.

“If the factors that influenced the increase continue, including a shift to purchase transactions and growing wholesale channel origination activity, it is likely that mortgage application fraud risk will continue to rise as well,” Berg said in the report. “Fraud on cashout refinance transactions and home-equity loans may become more of a factor in the coming years as home values and equity rise.”

CoreLogic’s Mortgage Application Fraud Risk Index jumped 17 percent on a year-over-year basis.

One factor behind the increase was the growing share of purchase financing, which widened to two-thirds from 55 percent a year earlier.

“Purchase transactions have higher risk due to the stronger motivations and increased opportunities to commit mortgage origination fraud,” the report stated.

Another factor was an increase in the share of business generated through the wholesale lending channel, which has broadened to 7.3 percent from 5.0 percent in the second-quarter 2016.

By loan type, jumbo refinance transactions had the biggest increase in fraud risk. Risk in this category soared 59 percent even as volume dropped 35 percent.

The risk of occupancy fraud rose 7.0 percent from a year prior, while transaction fraud risk was up 3.9 percent, and income fraud risk increased 3.5 percent.

But property fraud risk retreated 1.9 percent, while undisclosed real estate debt fraud risk was down 2.7 percent, and identity fraud risk tumbled 7.3 percent.

New York had the highest level of application fraud risk during the most-recent period. New Jersey was next, followed by Florida, the District of Columbia and California.

Copyright © 2017 Mortgage Daily. Distributed by Tribune Content Agency, LLC.

August Sales Numbers Are In

Closed sales decreased 7.1% for the same period last year with the median price increasing 18.2% to $236,000.

New listings decreased 6.4%.  Current Inventory increased .2% to 1,166 (we only have 1,200+ Realtors in Indian River County).

To see the full report click below.

Sebastian-Vero_Beach_MSA_Single_Family_Homes_2017-08_Detail

Homes built to stricter standards fared better during Irma

MIAMI – Sept. 19, 2017 – As homeowners in Florida begin to take stock of the damage from Hurricane Irma, industry observers note that homes built to the state’s stricter building codes seem to have fared better.

The feedback we’re hearing is positive,” says Rusty Payton, chief executive of the Florida Home Builders Association. “We’re all interested and there will be a deep dive. It appears that it did its job.”

Bill Wheat, executive vice president and chief financial officer at home builder D.R. Horton Inc., says his company’s early assessments “indicate that the more recent building standards post-Andrew over the last 20 years have held up relatively well.”

The evidence so far is preliminary, however. Insurance companies, home builders, city and county officials and local resiliency experts say they are still conducting assessments of how homes and commercial buildings built to different standards held up during Irma.

Florida has one of the strongest building codes in the country. Passed statewide in 2002 after Miami-Dade County beefed up regulations in the wake of Hurricane Andrew in 1992, the new rules required newly built homes to have stronger fasteners that prevent their roofs from blowing off, nails instead of staples, and impact-resistant windows in certain areas.

Florida passed a bill this spring that gives the Florida Building Commission flexibility to evaluate whether or not to make code changes to keep up with technological advancement and removed a requirement that it adopt International Code Council standards every three years.

Topics: Wall Street Journal (09/18/17) Kusisto, Laura; Campo-Flores, Arian

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