Guardian Residential Lending Industry News, August 22-29, 2019

Guardian Residential Lending Industry News, August 8-15, 2019
August 15, 2019
Guardian Residential Lending Industry News, August 29 – September 5, 2019
September 5, 2019
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Cost of living, mortgage rates and the nation’s most expensive residential listing…

Homeownership is the Top Contributor to Household Wealth (Mortgage News Daily, Aug. 28)

Two US Census Bureau researchers have determined that the biggest determinants of household wealth are owning a home and having a retirement account. While that may not be surprising, the degrees of magnitude are.

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First American says consumer house-buying power is highest it’s been in nearly two decades (HW, Aug. 28)

In June, consumer buying power increased by 12.2% from the previous year

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Americans are brimming with confidence, despite trade wars and recession signs (HW, Aug. 27)

“The first half of the movie wasn’t that scary,” a Wells Fargo economist explains

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How rate sensitive are borrowers? Slight uptick in interest rates leads to decline in mortgage applications (HW, Aug. 28)

Are mortgage borrowers sensitive to small movements in interest rates? Recent data shows that refinances are on the rise thanks to the low interest rates of the last few weeks, but what happens if mortgage rates start to move back up? Will that demand dry up just as quickly as it appeared, even if rates only pick up by a few basis points?

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How Portland ranks when it comes to Cost of Living (PBJ, Aug. 26)

Portland is the 17th most expensive place to live in the US.

Total Cost of Living: $2326.67

Utilities: $172.72

Internet: $63.27

Rent: $1,554.28

Food: $370.40

Gas: $166.26

Top 10 most expensive include San Francisco, New York City, San Jose, LA and Seattle…

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Appraisal Threshold to be Raised for First Time in 25 Years (Mortgage Daily News, Aug. 26)

Appraisals may soon not be required on certain home sales of $400,000 and under. FDIC and OCC have already approved rule change, awaiting sign-off from Fed.

Increasing home prices are at the heart of a decision by the major federal regulatory agencies to raise the threshold for requiring a residential real estate appraisal for mortgages originated by their regulated institutions.  When the rule become effective, mortgages on 1 to 4 family homes sold for $400,000 or less may be exempt from an appraisal; the current level is $250,000.

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Case-Shiller says home-price gains have slowed to a near 7-year low (HW, Aug. 27)

Phoenix reported the highest year-over-year gain among all the 20 cities

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Powell: Economy in favorable place in face of significant risks (HW, Aug. 26)

The economy today is thriving with economic expansion entering its 11th year and becoming the longest on record, said Federal Reserve Chair Jerome Powell as he explained that this is despite significant risks.

Powell explained that the global growth outlook has been deteriorating since the middle of last year, and there are three factors weighing against the current economic expansion in the U.S.: slowing global growth, trade policy uncertainty and muted inflation.

“…the U.S. economy has continued to perform well overall, driven by consumer spending. Job creation has slowed from last year’s pace but is still above overall labor force growth. Inflation seems to be moving up closer to 2%. Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”

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Why aren’t more Millennials buying homes? A bunch don’t understand mortgages (HW, Aug. 23)

Over half chalked it up to lack of savings or low income

The study also looked into Millennials’ knowledge of mortgages. This portion of the survey started with a fundamental question: “Do you believe that a lack of knowledge when it comes to homeownership and mortgages has prevented you from already owning a home or taking longer than expected to become a homeowner?”

To this, over half of the surveyed Millennials who are not homeowners replied “yes.” This response was further confirmed when the same group was asked what they thought a minimum down payment amounted to. The average answer was 37%. 

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Mortgage prepayments jump 58% as refinancings surge (HW, Aug. 22)

The lowest mortgage rates in almost three years are driving more Americans to refinance home loans. The average U.S. rate for a 30-year fixed mortgage fell to 3.6% in the first two weeks of August, the lowest level since November 2016, according to Freddie Mac.

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Fed minutes show more rate cuts likely through 2020 (HW, Aug. 21)

FOMC divided over state of economy

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Tesla will now rent solar panels to homeowners (Curbed, Aug. 20)

With solar panel sales lagging, Tesla tries its hand at renting again

Launching in six states—Arizona, California, Connecticut, Massachusetts, New Jersey, and New Mexico—Tesla’s rental program will offer three solar panel packages, with no installation costs and no time commitment.

Based on estimated annual energy generation, Tesla says the small (3.8 kW for $50 a month), medium (7.6 kW for $100 a month), and large (11.4 kW for $150 a month) solar panels are priced such that homeowners will net anywhere from $80 to $650 in annual savings.

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MBA lowers rate forecast and boosts lending outlook (HW, Aug. 19)

Mortgage Bankers group predicts mortgage originations will gain 15% from last year

Mortgage Bankers Association issued a new forecast that predicts the U.S. rate for a 30-year fixed mortgage will average 3.7% in the third and fourth quarters of 2019, down from the 3.9% the group predicted for the same periods a month ago. 

Lower mortgage rates will boost loan originations 15% compared to last year, according to the forecast issued on Friday. Mortgage originations probably will total $1.86 trillion in 2019, MBA said. Last month, it called for $1.79 trillion. In 2018, mortgage volume was $1.64 trillion.

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Realtor.com launches new tools to help homebuyers stay within budget

Says it’s a first for the industry

Realtor.com announced Monday it will be launching a monthly payment filter to help homebuyers search within their budget. Prospective buyers can now filter out home listings on realtor.com by a monthly payment amount.

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Harvard: First-time homebuyers are changing

The percentage of “never-marrieds” is growing

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Just for Fun

Inside the Most Expensive Home for Sale in America (CNBC, Aug. 27)

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Thanks for reading!