Low Mortgage Delinquencies and Healthy Outlook for Housing

As we have been saying, homeownership is a great way to build wealth.  CoreLogic is reporting that the average gain nationwide in home equity per borrower in 2018 was $13,600!  So far in 2019, the average gain in equity has been $6,400 per borrower.  Going forward, CoreLogic forecasts that over the next year, the average appreciation rate will be around 5.6%.  Even though home prices have been moving up, they are still on track to have continued health, continuing to make housing a very strong investment. 

Molly Boesel, Principal Economist said, “Home prices have increased steadily since 2011, creating record amounts of home equity and putting homeowners in a good position to weather future downturns.” Ralph McLaughlin, Deputy Chief Economist added, “We expect the housing market to enter a normalcy phase over the next 24 months.  With prices neither rising too fast nor too slow, and with a growing stream of young households looking to buy homes over the next two decades, the long-term view looks healthy.”

Also, mortgage quality has been improving and delinquency is at all-time lows.  CoreLogic has reported that as of April 2019, only 3.6% of home mortgages were in some type of delinquency.  This is down from last year’s report where it was 4.3%.  This is the lowest delinquency reading in over 20 years! 

This is the time to speak with your Advisors Mortgage professional, whether for refinancing or purchasing, to get a quality mortgage for a home that is forecasted to help you increase your wealth.

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Source: CoreLogic

30-Second Update: Economic Expansion & Stock Market All-Time High

According to the National Bureau of Economic Research, this month marks the longest expansion of economic growth since 1854, stemming back to June of 2009, a record 121 months!  Gross Domestic Product has grown a cumulative 25% during this record setting run.  In addition, the unemployment rate dropped to 3.6% in May, the lowest level since 1969. 

Driving the economic expansion, the Dow Jones Industrial Average closed above 27,000 for the first time ever on Thursday, July 11th.  The S&P 500 also notched a record close.   Fueling the stock market are investors choosing to put their money into stocks, amidst expectations that the Fed will cut interest rates later this month.  Art Hogan, Chief Market Strategist at National Securities said, “The Fed is on a one-way street heading to a cut. The market is clearly in ‘don’t-fight-the-Fed’ mode.”

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Home Prices Continue to Appreciate

CoreLogic has reported that single family homes across the nation have appreciated in price by 3.6% from May last year to May this year. They are also forecasting that there will be a 5.6% rate of appreciation by this time next year! 

Frank Nothaft, Chief Economist for CoreLogic said, “Interest rates on fixed-rate mortgages fell by nearly one percentage point between November 2018 and this May. This has been a shot-in-the-arm for home sales.  Sales gained momentum in May and annual home price growth accelerated for the first time since March 2018.”

When using these forecasted numbers, at 5.6% appreciation, a $300,000 home will be worth $316,800 next year.  When combining this large amount of equity gained with historically low interest rates, you get a recipe for building wealth.  This is a great time to purchase or refinance your home.  Call an Advisors Mortgage expert today to review your numbers and to get expert advise to take advantage of this hot market.

We Are Happy To Help” Call us at 855-LOANS-USA or visit us at

Source: CoreLogic

30-Second Update:  Pending Home Sales Rise/Mortgage Rates Hit 2 ½ Year Low

The Pending Home Sales Index, which is a forward-looking indicator based on home contract signings, increased 1.1% to 105.4 in May, up from April’s 104.3.  Pending home sales in the northeast rose 3.5% to a 92 reading.  The National Association of Realtors (NAR) Chief Economist Lawrence Yun said, “The lower-than-usual mortgage rates have led to the increase in pending sales for May.” 

Mortgage rates for the week ending June 27th, have tumbled to their lowest levels since late 2016.  Yun went on to say, “Lower rates create extremely attractive conditions for consumers.  Buyers, for good reason, are anxious to purchase and lock in at these rates.”  The key right now is matching supply and demand.  Homes are selling at a swift pace, and there is a need for home builders to ramp up construction to help assist in balancing the two. 

Now is a great time for first-time homebuyers, as well as current homeowners looking to downsize or move-up from their existing homes, to capitalize and lock-in on these very low rates.

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The Fed and Lower Rates

After the Fed’s meeting last week, we saw bond pricing improve which has pushed interest rates even lower.  The Fed has decided to keep the Fed Funds rate unchanged.  They also discussed no need to increase rates at this time, and even mentioned the idea of lowering it. 

The Fed has a dual mandate: keeping inflation near 2% and maintaining healthy job growth.  Because inflation is currently lower, actually at 1.5%, which was reported on May 31st in the PCE report, the Fed may open the appetite for lending money by decreasing the Fed Fund Rate.  Fred Bullard, St. Louis Fed President, actually voted against the national Fed decision and actually wanted a rate cut by a quarter percent, while the other members voted to keep the rate unchanged.  Bullard said, a rate cut “may be warranted soon”.   Analysts are also saying that even though there wasn’t a rate cut during this meeting, they are seeing the possibility of a rate cut as soon as the next meeting in July. 

With the current outlook of the economy and pending recession, rates are very attractive and moving lower.  This is a great time to start thinking about refinancing or purchasing a home.

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