Fed’s hike of 0.25 point in short term rates

Fed’s hike of 0.25 point in short term rates

For the first time in a year and only the second time in a decade, the Federal Open Market Committee (FOMC), the policy making arm of the Federal Reserve, voted on Wednesday in its eighth and final meeting of the year to raise the federal funds target rate by 25 basis points up to the 0.50 to 0.75 percent range. Analysts in the housing industry have been speculating for weeks as to what the effect of a Fed rate hike would be on mortgage interest rates and overall affordability. In the month prior to the Fed voting to raise the federal funds target rate, the average 30-year FRM rose by more than 50 basis points to a level above 4 percent for the first time in more than a year.

“While the Fed’s hike of 0.25 point in short-term interest rates may trickle down to long-term rate products like 30-year mortgages, the more immediate impact will be felt by borrowers with variable-rate mortgages and home equity lines of credit who can expect an increase in their payments at their next rate reset,” said Tim Manni, mortgage expert at NerdWallet. “Homebuyers shouldn’t be particularly concerned with today’s Fed move. Even with rates hovering over 4 percent, they’re still historically low.

The Fed released a new forecast Wednesday and it projects U.S. economic growth this year to be 1.9% and next year to be 2.1%, both slightly better than the Fed’s previous projection in September. The rate increase indicate that the U.S. economy no longer needs the Fed’s crutches and consumers and businesses can afford to pay more to borrow.

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Home Ownership: Up or Down?

united-states-home-ownership-rate

Home Ownership Rate in the United States increased to 63.50 percent in the third quarter of 2016 from  62.90 percent in the second quarter of 2016 which it was the same as in 1965, when the US Census started tracking the metric.  Home Ownership Rate refers to the percentage of homes that are occupied by the owner.

What factors drive Home Ownership rate?

There are several factors that will drive Home Ownership Rate, here are just some of those:

• Income growth

• Higher rents and housing costs

• Constrained credit

• Loss of confidence in wealth through Home Ownership

Nevertheless, owning a home is a financially savvy move because builds wealth over time,  and in general makes “cents”, and indeed there is no place like Home.

 

 

 

 

 

Love your kitchen forever!

Getting your home ready to Sell!

reduced2Getting your home ready to sell can seem overwhelming, but it doesn’t have to be. However, you need to look at your home from the perspective of a potential buyer.

Here are some tips that can help you on getting your home ready for sell boosting its curb appeal:

  • Add color to you landscape by either replacing flower beds or potted flowers, along with fresh sod.
  • Replace light fixtures and plumbing fixtures that will give your home a modern touch for a minimal investment.
  • Remove window treatments, unless they are current and high-end. That cuts the risk of turning off would-be buyers who don’t share your taste, and uncovered windows that will let more light into the rooms.
  • If you’re using your dining or a bedroom as an office for example, turn it back to their original use.
  • Replace dirty or worn carpet, you’re better off removing the carpet if there are hardwood floors underneath.
  • Uncluttered your house by packing away items that you will not use on an every day basis is a must. You want the new family to envision themselves living in the home.
  • A deep cleaning before you put your home on the market is a must, so everything shines.
  • Repaint all rooms in neutral colors. A fresh coat of paint also makes the house look newer and more modern.

Focus on low cost improvements! This will enhance your house’s curb appeal, and get your house ready to Sell!

Sandy Flores Broker/Realtor (714)963-7462

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Housing affordability Keeps on Going!

Homeownership closer than ever!

Housing affordability is up nationwide due to low-interest rates and home prices as National Homeownership Month begins in June, according to a recent release from the National Association of Home Builders (NAHB).

In addition to lower prices and interest rates, low-down payment programs offered by Fannie Mae and Freddie Mac is also helping creditworthy borrowers who cannot afford a large down payment   for a mortgage. These programs offer down payments as low as 3 percent for eligible first-time homebuyers.

Homeownership is the key of building wealth, since it is often a primary source of net worth and a step toward accumulating long-term personal financial assets.   It is not only limited to financial freedom but also building stronger communities and personal achievement.

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Decline in Mortgage Default Rates drive a drop in the Composite Default Index

Decline in Mortgage Default Rates drive a drop in the Composite Default Index

nyse127The national composite default index dropped by seven basis points from February to March, its first month-over-month decline in eight months, led by declines in both mortgage default indices, according to S&P Dow Jones Indices and S&P/Experian Consumer Credit Default Indices for March 2015 released Tuesday.

The mix of recent economic data suggests the economy is growing, but more slowly than at the end of 2014.

Moreover, the signs of moderation – retail sales and March’s slower increase in payrolls – suggest that the Fed isn’t likely to raise interest rates until later in 2015 or 2016.

ARE WE ON THE RIGHT TRACK?

ARE WE ON THE RIGHT TRACK?

foreclosure-montageEight national banks,  Bank of America, JPMorgan Chase, Citibank, HSBC, OneWest Bank, PNC, U.S. Bank, and Wells Fargo  saw the performance of their first-lien mortgages improved in the fourth quarter of 2014, while the delinquency rate on those mortgages and the foreclosure activity continued to decline, according to a quarterly report on mortgage performance by the Office of the Comptroller of the Currency (OCC) released Friday.

The mortgages covered in the report comprised about 45 percent of all outstanding residential mortgages in the United States – about 23.1 million mortgages with principal balances totaling about $3.9 trillion as of December 31, 2014.

Foreclosure inventory dropped by 39.7 percent year-over-year in Q4 down to 315,022, and Home retention actions, which included modifications, trial period plans, and shorter-term payment plans, totaled 195,577 in Q4, a decline of 19.5 percent year over year.

What do you think…

Negative Equity continues being a Serious Concern Despite Year Over Year Decline!

Negative Equity continues being a Serious Concern Despite Year Over Year Decline!

HARP-Refinance

While the percentage of homes in the United States with negative equity has declined substantially since the fourth quarter of 2013, they experienced a slight increase quarter-over-quarter in Q4 2014, according to CoreLogic‘s Q4 2014 Equity Report released last Tuesday.

CoreLogic reported that 10.8 percent of all residential homes were underwater in Q4, this is about 5.4 million properties approximately, which was down from 13.3 percent  in the same quarter a year earlier. The Q4 total was up slightly from the 10.3 percent that was reported for Q3 2014 – an increase of 3.3 percent.

Despite the year-over-year decline in the percentage of underwater residential properties, negative equity remains a serious issue, according to Anand Nallathambi, president and CEO of CoreLogic. For the full year of 2014, 1.2 million borrowers regained equity – but nearly five and a half million properties remained in negative equity as of the end of the year after approximately 172,000 homes slipped into negative equity from the third quarter to the fourth quarter in 2014.

Approximately 10 million of the nearly 50 million residential properties with a mortgage in the United States, which is about 20 percent of these properties have less than 20 percent equity, a condition known as under-equitied.

Visit http://www.sandyflores.com

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1.2 Million Borrowers Nationwide Regained Equity in 2014

1.2 Million Borrowers Nationwide Regained Equity in 2014

 

On today’s new analysis released by CoreLogic, leading global property information, analytics and data Price-Income_Featured-f084f5services provider, reported that 1.2 million borrowers regained equity in 2014. Nationwide, borrower equity increased year over year by $656 billion in Q4 2014. Borrowers with near negative equity are considered at risk of moving into negative equity if home prices fall. In contrast, if home prices rose by as little as 5 percent, an additional 1 million homeowners now in negative equity would regain equity. The calculations are not based on sampling, but rather on the full data set to avoid potential adverse selection due to sampling, and only data for mortgages residential properties that have a current estimated value is included.

Visit me at http://www.sandyflores.com; More information call me (714)963-7462

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