Market Commentary for the Final Week of 2015!

 

Week two of the year-end holiday season has only one monthly economic report scheduled for release that is relevant to mortgage rates in addition to a couple of potentially influential Treasury auctions. There is nothing of importance Monday, but we still may see some movement in the markets and mortgage pricing as traders return from the extended holiday weekend.

The Conference Board will post their Consumer Confidence Index (CCI) for December late Tuesday morning. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for an increase in confidence from November’s reading of 90.4. Analysts are expecting Tuesday’s release to show a reading of 93.5, meaning consumers felt much better about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

We also have Treasury auctions scheduled the first three days of the week. The two that are most likely to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates Tuesday and/or Wednesday. Results will be announced at 1:00 PM each day, so any reaction will come during early afternoon trading.

The bond market will close at 2:00 PM ET Thursday ahead of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Friday for the holiday and will reopen Monday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading a couple days. Therefore, don’t be surprised to see larger moves in bonds with little apparent reason. I would be more concerned with bond losses early in the week than any that may come later in the week.

Overall, I am expecting to see Tuesday be the most active day for mortgage rates, although I don’t see much to be worried about in this week’s calendar. It is difficult to label any day as the calmest because even Monday that doesn’t have anything scheduled to be posted could also be relatively busy following last week’s light holiday trading. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

10 Ways To Make Sure You Don’t Go Insane When You’re Moving

 

Going through the escrow process can be stressful when you’re buying a home. Once you do, you get the privilege of living in the home you’ve worked so hard for. But first, you have to move.

Ugh.

Not only is moving a pain, it’s also, not coincidentally, a huge stressor that can cause anxiety, depression, and even divorce!

“Almost two in three (61 percent) placed the ordeal at the top of their stress list in a poll of 2,000 adults who have moved homes in the past three years,” said Express. They found that misplaced possessions and waiting too long to pack were among the “most stressful moving day moments.”

So how do you move without losing your mind? These 10 tips will help.

1. Breathe

When thing start to go wrong – you don’t have room in your last remaining box for the rest of the guest room knickknacks, your mover just dropped the box with your champagne glasses in it, or your labeling pen just ran out—there’s one thing that can help: just breathe. And count to 10 while you’re at it. It won’t fix the situation, but it will help you to keep your cool and stay focused on the task at hand.

2. Relax

Powering through the packing, moving, and unpacking may sound like a great idea, but it might not be a pleasant experience if it means you’re skipping the activities that help keep you happy. Whether making time for morning yoga, lighting candles and playing calm music, or taking a bubble bath with a good book is your method for relaxing, let yourself have it. It might feel counterintuitive if you have a ton of work to do, but you may actually be more productive once you’ve taken the edge off.

3. Drink

Specifically, water to keep yourself hydrated. Packing may not seem like hard physical work, but all that lifting, stretching, twisting, and kneeling is actually quite a workout.

Make sure you also set aside a bottle of wine for when you’re done moving (plus one or two for when you have your friends over to help you pack).

4. Get some sleep

When we’re overtired, we’re more likely to be grouchy, which can make what is already an unpleasant experience even more so.

5. Label everything (we mean everything)

What seems like a hassle at the time will pay off later when you are able to easily locate the one remote control you need to make all of your electronics work because you listed all the contents on each box. Whether you label them per room (bedrooms are a given) or by type (bed linens in one, towels in another, all boxable electronics together) or a hybrid of both, you’ll be happy you made the effort.

6. Make a plan

You may not be the type of person to plan every minute of your day on a regular basis, but, when you’re moving, it helps to stick to a schedule. Anxiety and stress will start to wrestle with each other when moving day has arrived and you’re nowhere near done with your packing.

Work backwards from your moving day, boxing up items that are not used and identifying throwaways and donations first.

7. Ask for help

Friends and family can take the pain out of packing and moving. Make it a party with pizza and beverages, and they may just come back to help the next time you move, too.

8. Turn on your utilities before you move into your new home

Post-move, you’ll be exhausted. You know what will make it better? Being able to turn on the gas stove and boil some water for tea then kick up your feet and watch Jimmy Fallon. If that’s not possible because you don’t have access to the home before moving day, at least make sure you have a mobile hotspot or some other way to access Internet on a laptop so you can watch Hulu or Netflix.

The memory of the whole family gathered around a 13″ screen on your first night in your new house will be with you forever.

9. Move the most important stuff yourself

There are bound to be a few things that are too important to trust to a truck. Set aside your important papers, jewelry, and your Great-Grandmother’s china to move on your own.

10. Do your research on movers

You don’t want to end up on Dateline because the shady mover you hired took your stuff hostage. The key to finding a good mover is research, research, research. Ask for referrals and then check them out thoroughly to look for complaints. ProtectYourMove.gov will tell you if they are licensed or have ever had a formal complaint, and MovingScam.com is a great place to look because they have a message board loaded with detailed info as well as a black list of moving companies to stay away from.

Written by Jaymi Naciri

Market Commentary for the Week of December 21st - Happy Holidays!

 

This week brings us the release of six pieces of monthly and quarterly economic data that are considered relevant to mortgage rates. It is a holiday-shortened week with the financial markets closing early Thursday and remaining closed Friday in observance of Christmas. None of the week’s data is considered key, but some of it does carry enough importance to affect mortgage pricing. None of the week’s reports come Monday.

The first of this week’s releases is the final revision to the 3rd Quarter Gross Domestic Product (GDP) early Tuesday morning. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.1% annual pace during the quarter and this month’s final revision is expected to show a 2.0% growth rate. A revision higher than that would be considered bad news for bonds. But since this data is quite aged at this point and 4th quarter numbers will be posted next month, I am not expecting this release to affect rates Tuesday.

November’s Existing Home Sales figures will be released late Tuesday morning. The National Association of Realtors is expected to announce a decline in home resales last month, indicating a slowing housing sector. This report will give us a measurement of housing sector strength and mortgage credit demand. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual sales figures vary greatly from forecasts, the results will probably have a minor impact on mortgage rates.

There are four pieces of economic data being posted Wednesday morning. It starts with November’s Durable Goods Orders at 8:30 AM ET. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years such as appliances, airplanes and electronics. Analysts are expecting the report to show a 0.7% decline in new orders. A larger drop in new orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should help push mortgage rates lower. However, a large jump in orders could lead to mortgage rates moving higher early Wednesday morning. This data is known to be quite volatile from month-to-month though, so it is not unusual to see large headline numbers in this report.

Next up is November’s Personal Income and Outlays data, also at 8:30 AM ET. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up over two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.3% increase in income and a 0.3% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly Wednesday morning, especially if the Durable Goods Orders report gives us favorable results also.

The third release of the day is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for a slight increase (92.0 from 91.8), meaning surveyed consumers felt a little better about their own financial and employment situations than they did in October. Bond traders would prefer to see a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future.

November’s New Home Sales data is the final monthly economic report of the week. This report gives us another measurement of housing sector strength and mortgage credit demand. It is the sister report of Tuesday’s Existing Home Sales report, but covers a much smaller portion of the housing market than that one does. A weakening housing sector is considered good news for the bond market and mortgage rates because broader economic growth is less likely in the immediate future. Since bonds tend to thrive in weaker economic conditions, a large decline would be considered favorable for bond prices and mortgage rates. Current forecasts are calling for an increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.

We also have early closings this week that sometimes influence trading. The stock and bond markets will both close early Thursday ahead of Friday’s Christmas Day holiday and will reopen for regular trading hours Monday. Trading will likely be thin Wednesday afternoon as traders head home for the holiday. It is fairly common for some traders to sell small portions of their holdings before a holiday or long weekend to protect themselves from unforeseen events that may take place while U.S. markets are closed. That is more common on 3-day weekends than just a day-and-a-half holiday, especially when the geopolitical and international financial issues seem to be calm. However, the possibility does exist, so minor losses in trading Thursday morning will not be of much concern.

Overall, labeling Wednesday as the key day of the week for mortgage rates is an easy call with four report releases, but Tuesday may also be pretty active for the markets and mortgage rates. Despite the shortened week, it still would be prudent to watch the markets and maintain contact with your mortgage professional if still floating an interest rate.

Market Commentary for the Week of December 14th

 

This week has only four monthly economic reports scheduled for release in addition to some key Fed events that should significantly affect the financial and mortgage markets. All of the week’s events take place over the three middle days of the week, so we should see plenty of movement in rates during that time frame.

November’s Consumer Price Index (CPI) will start the week’s activities at 8:30 AM ET today. It is similar to last Friday’s Producer Price Index, except it tracks inflationary pressures at the important consumer level of the economy. Current forecasts show no change in the overall reading and an increase of 0.2% in the core data that excludes more volatile food and energy prices. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond’s future fixed interest payments, making them less appealing to investors. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.

Next up is November’s Housing Starts at 8:30 AM ET tomorrow morning. This data isn’t known to be highly influential on bonds or mortgage pricing, but it does give us an indication of housing sector strength by tracking new home groundbreakings. Analysts are expecting to see an increase in new starts, indicating strength in the new home portion of the housing sector. Slowing starts would be favorable for the bond market, although a wide variance is likely needed for the data to cause noticeable movement in the markets or mortgage rates Wednesday morning.

November’s Industrial Production report will be posted mid-morning tomorrow. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are calling for a 0.1% decline in output, indicating manufacturing softness. A larger than expected decline would be good news for bonds, while a stronger reading would show manufacturing strength and be considered bad news for rates.

Tomorrow also has some significant FOMC events that can be highly influential on the financial and mortgage markets. The two-day FOMC meeting that began Tuesday will adjourn at 2:00 PM ET Wednesday. This is where the general consensus expects Fed Chair Janet Yellen and friends to make the Fed’s first hike to key short-term interest rates since 2006. At the same time their post-meeting statement is made, they will also release revised economic projections. That will be followed by a press conference with Chair Yellen at 2:30 PM ET.

I am one of those many that are expecting a rate hike tomorrow afternoon, although there is still a chance that the Fed will wait for the next meeting to make a move in my opinion. The markets certainly have a .25% bump built in right now, so what can we expect after the announcement? Let’s tackle the easy one first. That would be the Fed not making a move yet. I am fairly certain that the bond market would rally and we would see a sizable improvement in mortgage rates. The more complicated scenario is if the Fed does announce a .25% rate increase. If this is what happens, I believe that there is a good chance of seeing an initial negative knee-jerk reaction in bonds that would push rates higher. However, shortly after we may see a reversal that would lead to rates starting a downward trend. This is obviously all speculation at this point. I am leaning towards the Fed making the rate hike this week and am expecting an interesting couple of days once the meeting adjourns.

The final economic release of the week be November’s Leading Economic Indicators (LEI) from the Conference Board late Thursday morning. This release attempts to measure or predict economic activity over the next three to six months. It is expected to show a 0.2% increase, meaning that it is predicting slight economic growth over the next several months. This probably will not have much influence on bond prices or affect mortgage rates unless it shows a much stronger reading than forecasts. The weaker the reading, the better the news it is for bonds and mortgage pricing.

Overall, Wednesday is the key day of the week due to the Fed schedule, but Tuesday could be a bit active also. The calmest day will likely be Monday or Friday. It is highly probable that this will be a highly volatile week for the mortgage market. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Teaching Kids to Budget During the Holidays

It’s never too early to start teaching kids money management skills. And the holidays are a wonderful time because you need to plan how much you will spend if you don’t want to be swimming in the red ink in January. An added bonus is that teaching your kids about budgeting will help you think through your budget and look for ways to spend smarter.

Even if your kids are still young enough to believe in Santa, they can still learn about how you set budgets for family and friends. You will just need to remember to add in a special line item for the Santa gifts that you keep hidden.

The discussions should go beyond just the actual present.  We may spend a lot on presents, but there are other money drains that we need to remember:

• Gifts. How much are you spending on immediate family? Extended family? Friends? Co-workers? Teachers?
• Supplies for making gifts
• Cards (with postage)
• Family Christmas letters
• Gift wrappings and bows and ribbons and tags
• Parties (hostess gifts don’t have to be expensive, but they should be factored in. And don’t forget if you need to buy special clothing.)
• The cost of bringing traditional family meals to gatherings

It’s also good to get your kids thinking about how they may be influenced by the media. A good opener is asking them what they received last Christmas. If they don’t remember, but you remember then begging for something, it could be a great way of exploring what is a real want and what is a media driven want.

• Discuss why advertisements target kids and encourage your kids to not believe everything they see when it comes to commercials.
• Let your kids know that local, green, and used items can be just as good as brand name items they see frequently in ads

How to Involve the Kids

Have your kids write out a list of everyone you want to give a gift to and the amount you want to spend per person. Now, you will need to stick to these amounts and not buy expensive gifts out of obligation or wanting to impress people.

Have money budgeted for charity or other donations like giving trees. In order to become generous adults, kids need to see generosity in action.

And work with your kids on creating homemade gifts. They could make cookies or cookie mixes in a jar. Planning ahead helps you to batch process gifts and could save money if you plan around sales. Often, flour and sugar are on sale this time of year, and you may be able to find canning jars in clearance since canning season is over.

Take the kids shopping with you so they can see how to look for the best price. Turn it into a game. Look for coupons. Compare prices.

And most importantly, keep a running tally of your spending to help everyone stay on the same page. If you overspend in one area, work together to find areas where you can adjust the budget. Sometimes, kids can come up with amazingly creative ideas that we haven’t thought of.

Why Real Estate Market Conditions Matter

 

A Comparable Market Analysis (CMA) can tell you what buyers recently paid for homes similar to yours, but that’s not all you need to know to choose the right listing price. You need to know the market’s appetite for your home, and that can only come from an overview of your community’s current market conditions.Market conditions are like a weather report; it helps you predict what the current crop of buyers will do. Using this knowledge, you can price your home to sell quickly, and for the most money possible.

Why is a quick sale important? The right price generates a bumper crop of buyers. If you price your home too high compared to other similar homes, you’ll appear to be testing the market. Buyers will assume that you’re going to be too difficult in negotiations.

Here’s what you need to know – what kind of a market are you in? Market conditions are formed by buyer attitudes, made sunny or cloudy by jobs, incomes, mortgage interest rates, and overall consumer confidence.

It’s possible that your community could have buyer’s and seller’s markets simultaneously. For example, your neighborhood may be hot, while the subdivision a mile away is stone cold.

A seller’s market is characterized by confident buyers, short “days on market” and low inventory levels of less than six months on hand. This usually results in rising prices.

A buyer’s market is characterized by longer “days on market,” and high inventory levels of seven months’ supply or more. To get buyers to come in from out of the storm, sellers must offer incentives such as seller-paid closing costs or lower prices.

The market conditions will tell you the long and short-term trends. If the market is heating up, you can ask a little more for your home. If the market is cooling, you may need to price your home slightly under the market in order to attract more buyers.
One thing you absolutely should never do is ignore market conditions. It’s said the market is always right. If you price your home too high, you’ll know when you get few to no showings.

That’s why it’s important to ask your real estate agent for occasional market updates as well as a fresh CMA. You’ll get a better idea of what your home will sell for and how long it will take to sell. And read our blog every Monday for the National mortgage market analysis for the upcoming week.

Written by Blanche Evans

Market Commentary for the Week of Pearl Harbor Day

 

This week has only three pieces of monthly economic data scheduled for release in addition to a couple of Treasury auctions that have the potential to influence mortgage rates. Two of the economic releases are considered highly important though and the Treasury auctions are the more important set we regularly deal with, so despite the lack of a busy calendar we still should see noticeable movement in rates this week.

The first events we need to deal with are the two Treasury auctions Wednesday and Thursday. Wednesday’s 10-year Note auction is the more important one and will likely have a bigger influence on mortgage rates. Results of the sales will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements to mortgage pricing during afternoon hours those days. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates.

All three of the week’s monthly economic reports are set for release Friday. November’s Retail Sales report is the first at 8:30 AM ET. This report will give us a key measurement of consumer spending by tracking sales at retail level establishments. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising consumer spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher Friday. Current forecasts are calling for an increase of 0.4% in November’s sales.

The second relevant report of the week will be November’s Producer Price Index (PPI), also early Friday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices, giving a more stable reading for analysts to consider. If Friday’s release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and mortgage rates could fall. Current forecasts are showing a 0.1% increase in the overall index and a 0.1% decline in the core data.

The final report of the week is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. Friday’s release is expected to show a reading of 91.6, which would be a decline from last month’s final reading of 93.1. A larger decline in confidence would be considered good news for the bond market and mortgage rates.

Overall, Friday should be the most active day of the week with all of the week’s relevant data being posted, but Wednesday afternoon could be fairly active also. The calmest day will likely be Tuesday. It will probably be a calmer week than last week in terms of mortgage rate movement although we still should see rates change over the week. Accordingly, maintaining contact with your mortgage professional is still recommended if still floating an interest rate.

Finding The Sweet Spot When Pricing Your Home

 

When sitting down with your REALTOR^® to price your home, you’ll be looking at competitive homes that are the most similar in size, location and amenities as your home. You may find that prices can be thousands of dollars higher or lower. It’s tempting to pick the highest price and say, “Let’s list it here.” But what if your home doesn’t sell at that price? High prices are a strategy that can work in an accelerating market, but it’s risky. Your home can sit for months without selling and you’ll end up marking the price down, perhaps lower than it should have sold for in the first place.

Pricing your home is a science. The science is choosing the right price at which your home will sell quickly. How do you do that? By analyzing your local market conditions and where your home fits in the spectrum.

The only way your home will sell at the highest price possible is if your buyer agrees to your home’s value. To best determine market value, you have three important tools: CMAs, appraisals, and your REALTOR’s^® knowledge of the market.

The “comps”

A comparative market analysis (CMA) is a side-by-side comparison of similar homes for sale as well as homes that have recently sold in your neighborhood. REALTORS^® use CMAs to compare the features that make each home unique, including age, location, number of bedrooms, baths, room sizes, updates, condition, etc.

As a seller, you should be able to see where your home fits — in the top or lower price range of similar homes. For example, if a similar home to yours has been recently renovated with a new kitchen, expect it to sell for more than your home if your home has not been improved.

The appraisal

An appraisal is a market analysis performed by a professional appraiser using a variety of sources, including multiple listing system data and conforming loan formulas.

Appraisers most often work for lenders to determine market values, so that lenders can weigh the risk of making a loan to a homebuyer. Appraisals come after an offer is made when the buyer applies for a loan. Even though the buyer pays for the appraisal, the lender uses it to determine whether or not to make the loan at the contract price.

Additional market data

Your REALTOR^® has access to data that may not be public through the Multiple Listing Service. This data is provided to broker members to track market trends over weeks, months and years. Some brokers pay data companies for specific markets that help them plan their business, such as the number of listings on hand, which zip codes are the hottest, and whether closings are trending up or down over last month or last year.

Your REALTOR^® uses all this data to help you hit the sweet spot of pricing. That’s high enough to reflect your home’s value, but attractive enough to buyers to get it sold quickly.

Written by Blanche Evans

Strategies for Black Friday Sales

 

Did you go out to shop on Black Friday last year? Or did you stay home and take advantage of the online sales from Thursday through Cyber Monday?

And, did you stick to your budget?

Financial advisers recommend reviewing past performance regularly in order to ensure that you are going to stay on track. So if last year, you budgeted $1000 and spent $1500, but then you spent $750 less the rest of the month, perhaps you should update the budget to $1300 or $1400 for your Black Friday/Cyber Monday and then look at reducing the other areas where you spent less last year.

If you know that you’re hosting the big Christmas Day party and you’ll be spending more on food, liquor, decoration and napkins, then figure out your budget for that, and look at reducing spending for gifts.  (You really don’t want to sit in your house with the heat off and the lights out to try to save on your electricity to make up for overspending.)

Once you have your budget, it’s time to do your research. There are many sites (see Resources) that leak black Friday ads early. You can figure out what you want to buy, and who has the best price.

Additionally, look carefully at the fine print. You may be able to purchase the item online instead of having to go onsite. And also look to see if there are limited quantities. If not, you may be able to get a rain-check.

Map your strategy out carefully. Also, compare that to your values. You may be able to get a $97 television if you shop on Thursday, but you’re giving up spending Thanksgiving with your family.

The National Retail Federation offers these tips:

• Read store ads carefully. Is the store offering sale items at a limited quantity? Can you get a rain check if it’s an out-of-stock sale item?
• Use the Internet to compare prices, not just the Black Friday ads but also retailers’ regular websites.
• Take the ad with you when you go shopping to make sure you find the precise item at the price advertised. It’s often a good idea to go to the store now to see if the items you want have the quality and features you desire.
• Check to see if your favorite retailer offers an option to buy online and pick up in store. That will allow you to skip the frenzy and head to the customer service counter.
• Focus on bottom-line prices, not discounts. Discount claims may not reflect real savings if the seller inflated the original price of an item.
• Know retailers’ return and exchange policies. Some have a specified number of days in which to return items. Others will give the recipient credit for their after-holiday clearance price without a gift receipt, and some won’t let you return an item bought online to a physical store.

Resources

• Black Friday Ads
• BlackFriday.com
• Brad’s Black Friday
• dealnews.com
• TheBlackFriday.com

Spend time looking online this weekend. Last year, there were some better bargains on the Sunday before Black Friday.

Many National Parks are free and some State Parks will be free to enter on Black Friday as a way of enticing people to get outside and have fun away from shopping. What will you be doing?

Market Commentary for the Week of Thanksgiving

 

This holiday-shortened week brings us the release of six relevant economic reports for the markets to digest in addition to a couple of Treasury auctions that have the potential to affect rates. All of the week’s data is being posted over three days, partly due to the Thanksgiving holiday, so the first part of the week should be the most interesting for mortgage shoppers.

October’s Existing Home Sales data will start the week’s calendar late Monday morning. The National Association of Realtors will give us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show a small decline, meaning the housing sector softened slightly last month. That would be relatively good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on mortgage rates.

Tuesday morning has two reports set for release, starting with the first revision to the 3rd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It is expected to show an upward revision to last month’s preliminary reading of a 1.5% annual rate of growth. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the benchmark measurement of economic growth. Current forecasts call for a reading of approximately 2.0%, meaning that there was more economic activity during the third quarter than previously thought. This would be bad news for the bond market and mortgage rates because strengthening economic growth makes bonds less appealing to investors that hurts bond prices and mortgage rates.

November’s Consumer Confidence Index (CCI) will be released late Tuesday morning by the Conference Board. This index helps us track consumer willingness to spend. If a consumer’s confidence in their own financial and employment situation is strong, analysts believe that they are more apt to make larger purchases, fueling economic growth. This is important because consumer spending makes up over two-thirds of the U.S. economy and makes long-term securities such as mortgage-related bonds less attractive to investors. Analysts are expecting to see an increase in confidence from last month’s level, meaning surveyed consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 99.6 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher Tuesday.

Wednesday has the remaining three economic reports that we need to be concerned with. The first is October’s Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items or products that are expected to last three or more years, such as airplanes, appliances and electronics. This data is known to be quite volatile from month-to-month, so sizable swings from the previous month are fairly normal. It is expected to show a 1.5% rise in new orders. A smaller than expected increase would be considered good news for the bond market and mortgage rates as it would indicate the manufacturing sector was not as strong as thought. We need to see a sizable variance from forecasts though for the markets to have a noticeable reaction due to the usual volatility in the data. It is worth noting though that this is one of the more important reports we get each month.

October’s Personal Income and Outlays data is the second report of the day. This data measures consumers’ ability to spend and their current spending habits. It is important because consumer spending is such a large part of the U.S. economy. It is expected to show that income rose 0.4% and that spending increased 0.3%. Weaker than expected readings would mean consumers had less money to spend and were spending less than thought. That would be favorable news for bonds and could lead to improvements in mortgage rates Wednesday morning.

October’s New Home Sales report will close out the week’s economic calendar. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see an increase between September and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates, partly because this report tracks such a small portion of all home sales.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury Notes Tuesday and 7-year Notes on Wednesday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. However, strong investor demand usually make bonds more attractive to investors and brings more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the Tuesday’s sale will be posted at 1:00 PM ET while Wednesday’s will be at 11:30 AM ET. Any reaction to the sales will come shortly after results are posted.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but the stock and bond markets will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. The same can be said to some degree Wednesday afternoon also. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

Overall, I am expecting Wednesday to be the busiest day for the bond market and mortgage rates with three of the week’s reports scheduled, but Tuesday is likely to be pretty active also. The calmest day of the week will most likely be Friday as many traders will be home for the long weekend rather than in the office working.

Home Organization & Using Self-Storage Spaces

Usually self-storage is used for storing things you can no longer afford to keep in your home but can’t bear to part with. Consider this. Storage units can be used for more than just a place to stack your old boxes. The beauty of having your own unit is that you have the freedom to do what you want with it. Some storage facilities can even serve as weekend soup kitchens, business stowage, exhibitions, and much more. Other facilities like Storage Post can also help with hosting projects such as community events or canned food drive.

For the mothers out there, storage can be something that drastically reorganizes your life. Regardless of the space you live in, having things in their proper place gives you an opportunity to declutter your living space and free your mind. Personally, my head tends to be clearer when I know where belongings are safely located. Many of my stored items are seasonal, like winter sweaters or holiday decorations, as well as furniture that I simply do not have the space for. Whether you consider storage for seasonal items, as an outlet to ease your mind, or neither, there are a plethora of uses for it – and it’s not going anywhere any time soon.

From obscure to original to downright awkward, here’s a quick list of a few other things your self-storage unit may be good for, whoever you are or wherever you live!

Drink Up the Good Life

One of the big advantages of an indoor storage facility over a shed or garage is that it is often climate controlled. The interior is maintained at the ideal temperature and humidity to preserve valuable documents, furs, and more. These conditions also are perfect for the storage of most fine wines. If you are a wine lover without space for a cellar at home, you can easily add racks to a self-storage unit. The security of the self-storage space also makes sure your prized pinot noir does not end up in the glass of an underage oenophile.

DIY Art Show

Aspiring artists often have a difficult time finding a place to show their works to the public. With a few adjustments, a self-storage unit can become a miniature art gallery. You can set up room dividers to create additional wall space for canvases. Additional lighting may be needed to show your work to its best advantage.

The Man Cave

It is a story told over and over again: a guy gets his space just the way he wants it, and circumstances beyond his control force him to man up and relinquish it. If your cave has been transformed into a nursery or home office, adding shelves may be your best bet. If not, storage may be something you must resort to. All you need to do is move your big screen, mini fridge, and recliner into the unit. There may even be enough room for a new putting practice area.

Broadcast Yourself

It seems that everyone is living online today. If you are serious about being the next straight-to-web star, a self-storage space could be the studio you need. You can create and record your latest episode in the unit, or you can go live with Wi-Fi technology. Internet radio personalities can add removable sound proofing to the walls. You can hang a backdrop to give your broadcast a more professional or exotic look as well. Self-storage can be the ideal choice for not only band practice, but for new businesses, too!

However you decide to use your self-storage unit, make sure you follow the guidelines for the site. Also, remember to be a thoughtful neighbor and to turn off the lights when you leave. Though storage units have been commonly known to store old belongings, furniture or even larger items like cars, motorcycles, or boats, there are ways to use a storage unit as something more than just another empty space.

Written by Realty Times

Market Commentary for the Week of November 16th

 

This week has four economic reports scheduled for release that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. One of the reports is considered highly important to the bond market, so we may see a decent amount of movement in rates this week. This is especially true if stocks make a noticeable move higher or lower any particular day.

October’s Consumer Price Index (CPI) from the Labor Department will start the week’s calendar at 8:30 AM ET Tuesday. The CPI measures inflationary pressures at the consumer level of the economy and is one of the more important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.2% rise in the overall reading and a 0.2% increase in the core data that excludes more volatile food and energy prices.

Also Tuesday morning will be the release of October’s Industrial Production data at 9:15 AM ET. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.1% increase in production, indicating little strength in the manufacturing sector. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is not expected to greatly influence the markets. Therefore, it will likely take a sizable variance from forecasts for it to have a noticeable impact on mortgage pricing.

October’s Housing Starts is Wednesday’s only economic data worth watching. This report gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts. It is expected to show a drop in starts of new homes, meaning the new home portion of the housing sector softened last month.

However, also worth noting is the release of the minutes from the last FOMC meeting Wednesday afternoon that can have an impact on the financial and mortgage markets. Traders will be looking for any indication of the Fed’s next move regarding monetary policy, particularly when the first rate increase will come. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising regarding when the Fed will raise key short-term interest rates, we will see some movement in rates Wednesday afternoon.

The final report of the week will come from the Conference Board at 10:00 AM ET Thursday, when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.5% increase, meaning economic activity will likely rise fairly quickly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to miss forecasts by a wide margin from forecasts for it to affect mortgage rates.

Overall, the most active day of the week will probably be Tuesday or Wednesday with two reports being posted each day. The best candidate for calmest day in rates is Friday as we may see reaction to the Paris terrorist attack Monday. Despite the fact this is not a particularly busy week, please maintain contact with your mortgage professional if floating an interest rate and closing in the near future as the markets can get active at any time.

5 Reasons to Buy a Home During the Holidays

 

Whether you’ve been looking unsuccessfully to buy a home for awhile or you’ve just started, now may be the best time to buy a home. Because there’s less inventory, you may have to review your game plan. You do have a plan for must have features and would like features and deal breaking features, right? This allows you to go into a house and figure out how closely it matches your dream home and what you’re willing to settle for. Keep in mind the “bones” of the house and the lot size. You can always look into remodeling or adding on.

Work with your real estate agent. There are some strategies for finding hidden gems that aren’t on the market anymore.

One strategy is to research “old expires,” which refers to homes that were for sale several years ago but weren’t sold at that time.

Another approach is for the broker to send letters to homeowners in your preferred neighborhood, fishing for someone who’s willing to sell a home that meets your criteria.

A third technique is to call brokers who sell a lot of homes in your target area and ask them about homes that aren’t yet listed, but are being prepped for sale and are “coming soon.”

Fewer People Looking for Homes

Most people have stopped looking because they think there’s fewer homes. And there are a lot of family, work and school activities combined with bad weather in many locations. So even though the inventory may be lower, you may have a better chance at getting a home. You may also find better prices.

Motivated Sellers

People selling their homes have often lowered their prices or are willing to make other concessions in order to get their place sold quickly.  Some people had their homes overpriced and are more open to negotiating.

If it’s a recent listing, they’re very serious about selling this house. Perhaps they’ve recently gotten divorced, have to relocate for a new job opportunity, or are under some other personal pressure. This puts you, the buyer, in a much better position to negotiate and ultimately cut a deal, particularly since competition is minimal this time of year.

Tax Advantages

Consult with a tax professional before you make your purchase. You don’t want to make the decision solely on a tax advantage, but it helps to get good advice before purchasing so you know what you can deduct. Usually, you can deduct home purchase costs, including mortgage interest, property taxes and points.

Better Interest Rates

Interest rates tend to trend down during the holidays due to limited demand which creates greater competition amongst lenders. Get in touch with a professional loan officer to get a rate locked in when you get pre-qualified.

Faster Closings

Everyone is motivated to get the deal done and there are fewer people needing to go through the closing process.

Make sure you talk with your real estate agent and mortgage about their holiday plans and get your expectations set.

Three Negotiating Mistakes Sellers Make

 

As a seller, when you list your home for sale, you may think you’ve priced it right, staged it beautifully, and timed the market for a quick sale. You followed all of the advice from your real estate agent.

But, the reality is that buyers are full of surprises most of which are predictable. They rarely pay list price; they discount or dismiss improvements you’ve made; their inspections usually turn up something for you to fix, and they may have terms that you weren’t counting on — like needing to sell their home before they buy yours.

Whether you plan to or not, you’re going to have to negotiate. Negotiating doesn’t mean you win and the buyer loses, or you lose and the buyer wins. It’s simply a way to make smaller concessions so that you don’t lose the buyer and the buyer doesn’t lose your house. Negotiation is designed for both of you to get what you want.

You’ve done something right or you wouldn’t have an offer on your home, but a sale isn’t in the bag yet. Don’t blow it. Here are three negotiating mistakes to avoid.

Demanding top dollar for an aging property

Yes, the market is better than it was during the recession, but an older home that hasn’t been updated or maintained to perfection can’t compete with refreshed or newer homes.

Tastemakers suggest that interiors need updating every 10 years because color, patterns and textures define each generation. The Ikat prints, HGTV bright colors and white marble kitchens of today will go out of style, just as the Harvest Golds and Avocado Greens of the 70s gave way to the pastels and Native American prints of the 80s, and the 90s jewel tones and velvets were replaced by concrete floors and exposed brick in the new millennium.

When you’ve lived in a home for some years, you miss the dings and scuffs that make a home look used. You don’t see the age of your finishes and fixtures the way buyers see them. Even if it’s not torn or broken, buyers may see certain things as needing to be replaced.

Getting angry at a low offer

A buyer may make an offer for your home that is far lower than you feel it’s worth. Don’t take it personally — it’s a negotiating tactic. If the buyer didn’t want the home, there would be no offer, so at least you know the buyer wants to negotiate.

The buyer isn’t really expecting you to take 20 percent off the list price, but they are using a low price to tell you something. Your job is to find out what that something is. Have your agent ask the buyer’s agent for the reasoning behind the low offer before you provide a written response. The buyer could be using inaccurate comparables, they could be trying to buy above their price range, or they may be investors who use a low-ball formula to acquire properties.

No offers or extremely low offers could be telling you that your home is overpriced compared to other similar homes. If your agent told you an estimated range where homes similar to yours are selling and you priced above that range, you need to lower the price. A low offer can also mean the market is slowing down and the buyer feels more confident. Ask your agent for an updated CMA so you can see where the market is heading.

All or nothing attitude

Negotiations keep the dialog fluid and the buyer interested. That’s why asking questions before you say no is a good idea. If you know that the buyer wants, it’s easier for you to offer a deal that will work for both of you.

In a seller’s market, you may expect buyers to give you multiple bids for your home and that could happen, but it’s rare. In a soft market, your buyer could simply walk away and find another home to buy because there are other homes on the market. You need to be flexible on the points that count most with the buyer, like move-in dates, and the buyer is more likely to be flexible with you on repairs or other negotiation.

Remember, you want to sell your home and your buyer wants to buy it. Maximize your offers with good negotiating techniques and move on with your life. And when you buy your next home, you’ll be more experienced and a better negotiator knowing the seller’s side of things.

Written by Blanche Evans

Market Commentary for the Week November 9th

 

This holiday-shortened week brings us the release of only three monthly or quarterly economic reports for the markets to digest along with two relevant Treasury auctions. One of those three reports is considered to be a key piece of data though. The bond market will be closed Wednesday in observance of the Veteran’s Day holiday, but the stock markets will be open for business.

There is nothing of importance scheduled for Monday, so we can expect bonds and mortgage rates to be driven by stock movement. Friday’s Employment report-fueled bond sell-off could extend into Monday’s trading, pressuring rates to start the week.

The first events of the week will be the two important Treasury auctions Thursday. Due to the holiday Wednesday, both auctions will be held Thursday instead of two days. 10-year Treasury Notes and 30-year Bonds will be sold, giving us an indication of demand for long-term securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading Thursday. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds will probably result in upward revisions to mortgage rates.

Friday has all three monthly reports. The Commerce Department will give us October’s Retail Sales figures at 8:30 AM ET. This data measures consumer or retail level spending. It is considered extremely important to the markets because consumer spending makes up over two-thirds of the U.S. economy. It is expected to show a 0.3% increase, meaning consumers spent more last month than they did in September. A larger increase in spending would be considered negative news for bonds because rising spending fuels economic growth and raises inflation concerns in the bond market. If

Friday’s report reveals a decline in spending that indicates consumers spent less than thought, bonds should react favorably, pushing mortgage rates lower. If it shows an unexpected increase, mortgage rates will likely move higher.

Next up is October’s Producer Price Index (PPI), also at 8:30 AM ET. This is considered to be a key inflation reading that tracks inflationary pressures at the manufacturing level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Signs of rapidly rising inflation make long-term securities such as mortgage-related bonds less attractive to investors and leads to higher mortgage rates. The overall reading is expected to show a 0.1% increase from September while the core data is expected to rise 0.1% also. Weaker than expected readings would be good news for bonds and mortgage rates, while a larger than forecasted increase in the core reading could lead to higher mortgage rates Friday morning.

The week’s economic calendar closes late Friday morning when November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment is posted. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 92.0, up from October’s final reading of 90.0. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. And with consumer spending so important, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.

Overall, Friday is likely to be the most active day for mortgage rates with all of this week’s data scheduled, including the highly important Retail Sales report. The calmest will probably be Wednesday since I see many lenders being open for business despite the bond market closure. There is a good possibility of seeing a fairly calm day Tuesday also as some bond trading firms may be on skeleton staff ahead of the holiday. Despite the light economic calendar, there is still a decent chance of seeing a noticeable move in rates this week. Therefore, it would prudent to maintain contact with your mortgage professional if still floating an interest rate.

Three Advantages to Selling Your Home During the Holidays

 

If you’re thinking of selling your home but holding off on listing it until January, this article is for you. There are three big advantages to selling your home in the next two months.

1. There’s less competition. A reduced inventory means there are more buyers checking out your property.
2. Buyers are more motivated during the holidays. They may need to buy a home for tax reasons before December 31. They may be moving because they start a new job in January. The bottom line is that they want to buy.
3. Your home already looks great. So make sure you put up some festive decorations that enhance your home. Keep clutter to a minimum, and keep decorations tasteful and neutral.

Buyers are more serious during the holidays. And they are also more emotional. Seeing a warm home decorated for the holidays will motivate them to pay more.


Another great reason to sell during the holidays is that most people have time off. And that means they’ll have more time to devote to house hunting.

Did you know that internet searches during the holidays dramatically increases? Many home buyers devote a large portion of their house hunting time during the holidays to searching online as opposed to driving around looking for open houses. They can then whittle down their list to their top few. To get your home found, you need to have it on the market.

And if you think it’s a hassle because you tend to travel, think again. That’s actually a bonus that makes it easier for real estate agents to show your home. Everything will be vacant and stay clean. You can keep the heat on to keep potential buyers happy. And your home won’t look vacant with people coming and going.

If you don’t want to be disturbed during your holidays, set a daily showing schedule where agents know when they can bring people by. You can also have black out dates where the home is entirely off-limits. Your listing will stay on the MLS but you won’t be inconvenienced.

If your home has been on the market for awhile, it tends to mean that buyers and their agents believe it to be stale and overpriced.  So you could use this time to lower the price or see if there are any simple maintenance or cosmetic fixes you could do to make your house look more valuable. Increasing your curb appeal should be a priority during the winter months anyway. Keep your gutters clean and walkways free of snow, ice, and slippery leaves.

An added bonus is that if you sell your home before the end of the year, you will have the cash in hand for buying your next home in the Spring when there are more listings. And if you have cash in hand, you will look like a better buyer and have fewer hoops to jump through.

Work with your real estate agent to find the strategy that works best for you.

How to Attract Only Serious Buyers

 

Serious buyers are ready to find a home. They’ve been pre-approved by a lender, are under contract with a real estate agent, and are ready to make an offer on the right home.
A Lookie-Loo is a person who is not seriously in the market to buy a home. “Loo” could be a nosy neighbor, an open house junkie, or someone who thinks they’re serious, but are not able to make a realistic offer.

When determining your marketing strategy, your real estate professional will know what works to get serious buyers coming to see your home, and what will discourage people who will waste your time.

Attracting Serious Buyers

In any market, your home is competing with new construction that offers never-lived-in appeal – pristine appointments, hardwood floors, granite countertops, stainless steel appliances, and more. In a slow market, builders offer landscaping discounts, points on mortgage loans, and decorating allowances as incentives.

Your home is also competing with your neighbors’ homes for sale, which may be in better condition or more updated than yours. You may also be in a market that still has a large number of foreclosures that are pulling home prices down.

The point is that buyers want the most value, no matter what the market is doing. Don’t assume that because home prices are up and sales are picking up that buyers will negotiate any less. Verify market prices with your agent. Price your home for today’s market reality.

Your job is to prepare your home to attract serious buyers. Move-in ready condition is what most buyers want, and you have to provide it. Your agent’s job is network, advertise, and market to make buyers aware of your home and interested in buying it. If the marketing pictures show a problem, you’re not going to attract serious buyers.

Stage your home to best advantage – declutter, depersonalize, clean thoroughly, enhance curb appeal, fresh paint, fresh landscaping. Fix every little thing that’s broken or not working smoothly – no sticking drawers, no wobbly doorknobs. Don’t give buyers room to make unrealistic offers.
Do something extra for your home – some remodeling, new appliances, new countertops can work wonders for buyers. Do something extra for the buyer, like provide a history of the home.

Discouraging Lookie-Loos

The only thing your agent can do to discourage Lookie-Loos is to encourage serious buyers to consider your home. Your agent can network with other agents and tell them all the things you’ve done to attract a serious, realistic offer. They will bring qualified, interested buyers to view your home.

Make sure your agent creates a really good online presentation of your home with lots of pictures, a virtual tour, local amenities, school data, and more. The idea is to give buyers enough information to put your home on their short list.

Your agent can also employ niche marketing and out of box marketing ideas. If your home is near a college, for example, she can advertise in college papers, alumni magazines, billboards or student housing websites.

The more questions you can answer about your home and neighborhood online, the less interested Lookie-Loos will be in traipsing through your home, either at an open house or with their agents.
If you do have an open house, don’t make it easy for people to have the run of your home. Have your agent register visitors and view their identification. Serious buyers won’t be offended but non-serious buyers will be very reluctant to provide personal information. Those are the people you don’t need.

Despite your precautions, some Lookie-Loos will slip through, making appointments that waste your agent’s time and yours, but look at it this way – if your home is ready for market and priced to sell, it’s a good deal for any buyer, even a Lookie-Loo.

Written by Blanche Evans

Market Commentary for the Week of November 2nd

 

This week brings us the release of five economic reports for the markets to digest with two of those reports being much more important than the others. In addition to the data, there is also a high number of speaking engagements by Federal Reserve members, including one by Fed Chair Yellen to the House Financial Services Committee mid-week.

The first release of the week will come from the Institute for Supply Management (ISM), who will post their manufacturing index at 10:00 AM ET Monday. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month, partly because it is the first report every month that tracks the preceding month’s activity. Monday’s release is expected to show a reading of 50.0, indicating that manufacturer sentiment slipped from September’s level. This means fewer surveyed manufacturing executives felt business improved during the month than in September, hinting at slower manufacturing sector growth. A smaller than expected reading would be good news for bonds and likely lead to lower mortgage rates Monday. It is worth noting that a reading below 50.0 is significant because it indicates contraction in the sector.

The second report of the week will be September’s Factory Orders data at 10:00 AM ET Tuesday. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 0.9% decline in new orders from August’s level. A larger decline would be good news for the bond market and mortgage rates while an unexpected rise would be bad news and could push rates slightly higher Tuesday morning since it would indicate economic strength. It is worth noting though, that this report is not considered to be highly important to mortgage rates.

Wednesday’s only report worth watching is the ADP Employment report before the markets open. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reaction to the report, we should be watching it. Analysts are expecting it to show that 180,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

The 3rd Quarter Productivity reading will be released Thursday at 8:30 AM ET. It is expected to show a 0.2% decline in worker productivity during the third quarter. A large increase would be good news for the bond market because higher levels of employee productivity allow the economy to expand without inflationary pressures being a concern. This is a relatively low importance report, meaning it will take a significant variance from forecasts for it to directly affect mortgage rates.

The last report of the week is the most important. Friday brings us the release of arguably the most important monthly piece of economic news- the Employment report. The Labor Department will post October’s employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate, holding at 5.1%, an increase in payrolls of approximately 185,000 and a 0.2% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news.

Overall, the single most important day is Friday but Monday is likely to be pretty active also. Tuesday will probably be the calmest day unless something unexpected happens. We have relevant data set for release each day of the week and a full Fed speaking schedule that can cause ripples in the markets at any time. They lead me to believe that we will see another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if still floating a rate and closing in the near future.

Halloween - A Brief History

 

Happy Halloween!

For fun, we thought we’d post some interesting facts about the history of Halloween.
Halloween has its origins in the Druidic festival of Samhain (pronounced sow-wen) which honored the end of the harvest, and the transition into the dormant, or dead, period until the rebirth in the Spring (Beltane). Samhain is old Irish for “summer’s end.” The Catholics used to have All Saints Day on May 13 and moved it to November 2nd to try to co-opt the holiday. November 1 was Hallow Mass. And October 31 became All Hallows Eve which got shortened to Halloween.

Why Masks

The Druids believed that the veil between this world and the one beyond was at it’s thinnest on Samhain, and to prevent spirits from following you home, you wore masks and costumes. This was also called “guising.”

Masks weren’t very popular for Halloween until the early 1920s. During World War II, Halloween was toned down due to sugar rationing and the somber mood of the citizens. In the 1950s, mask use took off partially because manufacturing ramped up, and partially because of the new suburban areas that encouraged neighborhoods. Current masks have become almost movie special effect quality.

Why Jack O’Lanterns

Originally, people carved faces in turnips. The myth was of a farmer named Jack who tricked the Devil. However, there are no good ways of tracing the stories. In the mid-17th century, Jack-o’-lantern was used as the term for a night watchman or someone with a lantern.

Why do we pass out candy

In the middle ages, people made soul cakes that were passed out to the poor who would go door to door. In exchange cake, the poor would promise them to pray for those stuck in Purgatory. It was believed that if God heard enough prayers for someone in Purgatory, they would be released into Heaven. This tradition was called Souling.

Trick or treating for candy became established in the 50’s. In the 90’s, it evolved into local parties or safe trick or treating such as in a mall.

What’s with the phrase “trick or treat?”

Kids would cause great mischief on Halloween, and some people would bribe them with sweets and treats to prevent them from causing mischief. Thus came the phrase “trick or treat?”

Exterior Renovations That Provide The Best Return On Investment

 

Decked-out kitchens and sparkly spa bathrooms may get our hearts pumping, but deciding to renovate is more often the product of a have-to than a want-to. Whether the renovation you’re considering is driven by a necessary repair or replacement, or the desire to upgrade an item prior to listing your home for sale, the goal is the same: to get the highest return on investment (ROI).

Knowing which items will bring in the best ROI can help you make sound decisions. And this year, the smartest projects are geared toward the exterior of the home. After all, if buyers are turned off by what they see when they drive up, they might not opt to see any more.

Here are the five exterior renovations that will give you the highest return, according to Remodeling magazine’s 2015 Cost vs. Value Report.

Garage door replacement

A beat-up garage door can make your whole house look bad and keep buyers from looking further. Spend $1,595—the national average cost of a garage door replacement—and you’ll get a return of $1,410, or 88.4 percent. Don’t have a garage? According to the report, you can add one for $52,382, which returns $33,938 or 64.8 percent.

Manufactured stone veneer

Adding character to homes can warm them up and make them more desirable, but few of these projects rank high when it comes to paying you back. As a newbie to the report, manufactured stone veneer was the exception, and it didn’t just show up—it made an impression. “It joined Cost vs. Value with a splash, ranking second among all projects with a cost-value return of 92.2%,” they said. “The only project that beat it was for a replacement steel entry door.”

Steel entry door replacement

Speaking of that steel entry door…it tops the Cost vs. Value report for the second year in a row and was even better than last year’s number with a “cost recouped of 101.8%,” they said. “The cost-value ratio expresses resale value as a percentage of construction cost. When cost and value are equal, the ratio is 100%; when cost is higher than value, the ratio is less than 100%; when value is higher than cost, the ratio exceeds 100%. That means the replacement steel entry door is the only project that, on a national basis, more than pays back its investment in the form of a better home resale price.”

Deck addition

More “outdoor living trend” than “curb appeal improvement,” a deck addition can be a smart choice for those looking to sell quickly and also for those who are looking to get some enjoyment out of their home now. Spending $10,048 can pay back $8,085 or 80.5 percent.

Vinyl siding replacement

A $12,013 investment in new siding might not sound exciting, but it may help get your home sold. Not many buyers are going to be excited about checking out your home if the siding is warped, cracked, or peeling. The good news is you’ll recoup 80.7 percent or $9,694, making this a good place to put your renovation dollars.

Written by Jaymi Naciri

Market Commentary for the Week of October 26th

 

This week brings us the release of seven economic reports and two Treasury auctions for the bond market to digest in addition to another FOMC meeting. We have data or other events that are expected to influence mortgage rates set every day, so we could see plenty of movement in rates this week. The data scheduled this week ranges from minor to extremely important, meaning some reports will have a much bigger impact on trading than others.

September’s New Home Sales starts the week at 10:00 AM ET Monday. This data covers the small percentage of home sales that last week’s Existing Home Sales report didn’t include. It is expected to show a slight decline in sales of newly constructed homes, but I don’t see this report having much of an impact on Monday’s mortgage rates. I believe the markets will be much more focused on events coming later in the week.

There are two reports scheduled for release Tuesday, starting with the Durable Goods Orders report for September at 8:30 AM ET. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for a decline in new orders of approximately 1.3%. If we see a large increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a significantly larger than expected decline should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance from forecasts likely will have little effect on Tuesday’s bond trading or mortgage pricing.

October’s Consumer Confidence Index (CCI) will be released at 10:00 AM ET Tuesday. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a drop in confidence from last month’s 103.0 reading. That would mean that consumers did not feel as good about their own financial and employment situations as they did last month, indicating they are less likely to make large purchases in the near future. That would be good news for the bond market because consumer spending makes up over two-thirds of our economy. Current forecasts are showing a reading of 102.5. The lower the reading, the better the news it is for mortgage rates.

This week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. Some market participants feel this is when the Fed will make their first increase to key short-term interest rates since 2006. Since even the Fed has indicated they expect a rate hike before the end of the year, suspense is building that it will come this week. There is only one more meeting scheduled this year, so if it doesn’t come this week the odds rise sharply it will come at December’s meeting. It is my opinion that we will not see a move at this meeting. I think December is the earliest with a decent chance it will not come until early 2016. The meeting will adjourn at 2:00 PM ET Wednesday, so look for plenty of reaction and volatility to the post-meeting statement during mid-afternoon trading.

The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) will be released at 8:30 AM ET Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the total of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually has the biggest influence on the markets. Current forecasts call for an increase of approximately 1.6% in the GDP, which would mean that the economy grew at a noticeably slower pace than the 2nd quarter’s 3.9% rate. If this report shows a much smaller increase, I am expecting to see the bond market rally and mortgage rates fall. However, a larger than expected rise could lead to a rally in stocks, bond selling and a sizable increase in mortgage pricing Thursday morning.

Friday has the remaining three reports scheduled that may affect mortgage rates. The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET. It is the least important of the day’s three reports. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raise wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week. That means will take a large variance from forecasts for this report of have a noticeable influence on mortgage pricing.

September’s Personal Income and Outlays report will also be posted early Friday morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up such a large part of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see a 0.2% increase in income and a 0.2% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing.

The week’s last report comes just before 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. This report is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Current forecasts show this index rising from its preliminary reading of 92.1 to 92.6. Good news for mortgage rates would be a sizable decline in the index.

This week also has Treasury auctions scheduled the first three days. The only two that have the potential to influence mortgage rates are Wednesday’s 5-year and Thursday’s 7-year Note sales. If those sales are met with a strong demand from investors, particularly Wednesday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

Overall, it appears Wednesday or Thursday could be the most active day for mortgage rates and Monday is the best candidate for lightest. The importance of Tuesday and Friday’s reports makes them likely to be active day also, although I suspect the most movement in rates will take place the middle days due to the FOMC meeting and GDP report. With data or other events relevant to mortgage rates scheduled all five days, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Best Remodels For Your Money

 

You’ve decided it’s time to remodel something in the house. Maybe you got a tax refund or a great bonus, and want to invest it in your home. In the back of your mind, you’re probably thinking “What’s the best bang for my buck if I sell this house down the road?” And that’s a great question to ask.

But First…

While it’s good to think about the monetary return on investment, you should also spend some time thinking about the emotional one as well. If you spend most of the time in your kitchen area, perhaps that’s going to bring about the best return rather then remodeling bathrooms that look clean and function well.
Or perhaps you want a swimming pool.  Rarely does a pool pay off in resale value, but maybe it’s your dream to have pool parties, or spend the summer with an iced drink on a floatie.  Your enjoyment of the upgrade should be taken into account otherwise you might resent the remodeled room.

What Doesn’t Usually Pay Off

1. Swimming Pools, Spas, Lap Pools, Tennis courts – most buyers are not interested in taking on what will be an additional cost for maintenance.  Additionally, this is something that will increase insurance as it’s a liability (attractive nuisance)
2. Home Office – A limited number of buyers work out of their home, and won’t be as interested.  This Old House likened it to buying a convertible if you never put the top down.
3. Over-remodeling – When you put in warmed, Italian bathroom tiles, or the most expensive kitchen appliances, you are the only one who is going to appreciate it.
4. Family room
5. Window and Roofing
6. Custom additions (wine cellars, home theaters)

What Does Usually Pay Off

1. Bathrooms – a midrange bathroom remodel often gets the best return
2. Kitchens – again, midrange is going to pay off faster
3. High-end siding replacement
4. Add-Ons – If you have 1.5 bathrooms in a neighborhood that averages 2-3, adding in a bathroom will be a huge return on investment.  However, if you already have 4, and add a 5th, you won’t get a return.
5. Attics – if big enough, you can put a small office or bedroom up there
6. Basement

Things To Keep In Mind

Just because a project is expensive does not mean it will yield a bigger pay back.  Painting the entire house inside and out isn’t very costly, but can have a huge return because the place looks new.
If your remodel is adding on a room, keep it in the same architectural style as the rest of the house. The flow will feel consistent, and future buyers may not even know it was an add-on.

Consider your neighborhood.  If you spend $100,000 to upgrade to a gourmet kitchen with sub-zero refrigerators, and the average home in the neighborhood sells for less than $500,000, you are not going to get your money back.  You will have your happy factor from the years when you used it, but no one else will pay the extra for it.

You can do a partial upgrade instead of the whole enchilada.

Avoid the unusual unless you plan on staying in your home for the rest of your life.  Stick to neutral tones and porcelain tile floors, showers and backspashes for bathrooms and kitchens.

Don’t pull equity out of your home if you plan to sell in the next three years.

Resources

There are five types of remodel projects per About.com.  You can read about them in more depth here.

1. Home Maintenance and Repair Projects
2. Curb Appeal Projects
3. Neighborhood Norm Projects
4. Appraisal Booster Projects
5. Lifestyle Projects

Conclusion

So, to conclude, the longer you stay in your home, the more you will recoup your investment. Balance the project with what is going to bring you the greatest joy.  If you plan on staying in your house for a long time, you can invest more in areas that may not pay off as quickly as if you were planning on selling within two to three years.

Also, talk to a Realtor who specializes in your neighborhood what they have seen as the best investments for remodeling.

What do you want to remodel in your home?