Wednesday, March 23, 2016

Interest Rate Update - March 21, 2016

Interest Rate Update Interest rates are still looking good. Even with the .25% hike in the Federal Funds Rate long term interest rates remain at historic lows.


30 Year Fixed up to $417,000 3.50% to 3.75%
30 Year Fixed “Agency” up to $625,500 3.625% to 3.875%
30 Year Fixed FHA up to $417,000 3.25% to 3.50%
30 Year Fixed FHA “Jumbo” up to $729,500 3.25% to 3.50%

Update From Fannie Mae Here is what Fannie Mae is saying, “A less optimistic outlook for future wage gains coupled with continued strong home price appreciation booted by lean inventory, is adding to the housing affordability challenge. Our latest home purchase sentiment index shows that high home prices are a top reason for consumer’s perception that it is a bad time to buy a home. However, low mortgage rates should help support moderate housing expansion as we move through the year”.
How Does This Affect You ? In a nutshell Fannie Mae is saying that home prices should moderate and the low interest rate environment will keep people buying homes. Remember also that Fannie Mae is talking on a nationwide stage. Here in Southern California the housing industry tends to do better than other areas. So spread the word that rates are still at historic levels and property is still moving.

Nearly 95 percent of young renters want to buy, but many say they can't afford it

Source: Wall St. Journal
A recent survey by the National Association of REALTORS® finds that nearly 95 percent of renters 34 years old or younger want to own a home in the future and overall, 83 percent of renters said they have a desire to own. More than half of renters said they haven’t yet bought a home because they couldn’t afford one, while just 19 percent said they prefer the flexibility of renting. Notably, only half of all households polled—renters and homeowners—said they believe the economy is currently improving, and 44 percent said they believe the country is in a recession, so there is a lack of optimism about the economic conditions that will allow them to pursue homeownership.
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Wednesday, March 16, 2016

Millennial generation most fiscally cautious since Depression

Source: Los Angeles Times

  A new study finds that the millennial generation is the most financially conservative since the Great Depression. According to UBS Wealth Management Americas, these younger Americans are reluctant to take big financial risks due to the trauma of the global financial crisis in 2008. More than one-third of people aged 21 to 36 say they’re financially conservative and their actions speak even louder than their words. The average millennial has 52 percent of his or her portfolio in cash, more than twice the 23 percent of other investors. A mere 28 percent of millennials see the point of long-term investing, and only 12 percent would stash so-called found money in the stock market, according to the survey.

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Wednesday, March 9, 2016

Lack of affordable housing pushes Toyota from California to Texas

Source: Dallas Business Journal

  Toyota recently decided to plant its North American headquarters in Plano, Texas, bringing in more than 3,000 jobs, mostly from Torrance, Calif. According to a professor with inside knowledge of the move, the main driver of Toyota’s move from California was housing costs. Toyota did the math and found that housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth. The median home in Dallas-Fort Worth costs about $210,000, and the median income is roughly $58,000. In Torrance the median home price is $508,000 and the median income is $76,000.

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Wednesday, March 2, 2016

U.S. housing data signals economic strength; manufacturing weak

Source: Reuters
As 2015 drew to a close, the Commerce Department reported that building permits in November vaulted 11 percent to a 1.29 million-unit rate, the highest level since June. Groundbreaking jumped 10.5 percent to a seasonally adjusted annual pace of 1.17 million units. With permits running ahead of starts, home building is likely to remain supported in the months ahead. November marked the eighth straight month that housing starts remained above 1 million units, the longest stretch since 2007. Despite these signs of strength in the housing market, other data showed the industrial sector continuing to struggle under the weight of a strong dollar, cutbacks in inventory investment as well as spending cuts by energy firms in response to persistently low oil prices.”
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