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Apache is functioning normally

Apache is functioning normally

Mortgage rates actually recovered a bit on Friday as the underlying bond market experienced a modest correction after spiking to the weakest levels in more than a decade over the past 2 days.  Despite the improvement, mortgages are also still near multi-decade highs.  Why is this the case when the Fed didn’t hike rates this week?

This counterintuitive movement is fairly common when it comes to the 8 Fed meetings each year.  Rates have fallen on several occasions when the Fed hiked throughout this rate hike cycle.  There are several reasons this can happen.  Some are complicated, but two of the simplest reasons are all we need this time around. 

First off, the Fed only has 8 scheduled opportunities to update rates every year while the bond market has thousands of opportunities every day. Because of that, a Fed rate hike is often just a lagging development that the market has already priced in.  The Fed actually tries to avoid surprising the market when it comes to hikes/cuts.  Via speeches and press conferences, it effectively preps the market for potential changes. 

The market can trade these expectations in a variety of ways.  The most direct is via Fed Funds Futures, which give traders a way to bet on the level of the Fed Funds Rate on any given month well into the future. Traders haven’t budged in their expectation of this week’s meeting resulting in a 5.375% Fed Funds Rate for months!

In other words, when the Fed held rates steady this week, it wasn’t a surprise to anyone and the market was already priced for it.  We can thus rule out the rate decision as the catalyst for the mortgage rate volatility and look elsewhere.  We won’t need to look far.

On 4 out of the 8 Fed announcements per year, and at the exact same moment as the Fed Funds Rate decision, the Fed also releases a “summary of economic projections.”  Among these forecasts is a dot plot showing where each Fed member sees the Fed Funds Rate at the end of the next few years.  These so-called “dots” have become a big deal for financial markets despite Fed Chair Powell’s requests to avoid reading too much into them.

The market doesn’t care about the dots due to some amazing track record of accuracy from the Fed.  Rather, they simply offer a very detailed update as to how the Fed’s decision-making process is evolving  when it comes to future rate hikes/cuts.  If the average Fed member expected rates to be almost 1% lower by the end of 2024 and now only sees them being 0.25% lower, that would tell the market a lot about the Fed’s intention to keep rates higher for longer, all other things being equal.

That is exactly what happened.

Markets expected the dots to rise, but not by this much.  Neither stocks nor bonds (aka rates) were happy about it.

Traders had already been pricing in a “higher for longer” path for the Fed Funds rate based on recent economic data.  In the bigger picture, this week’s revelation didn’t materially alter the trend in those expectations, but it did give them a noticeable bump.  Here’s how the market’s outlook for the Fed Funds Rate in September 2024 has been evolving.

The “bump” just happened to hit when rates were already near long-term highs.  The average 30yr fixed rate didn’t technically break above the highest level seen last month, but it came within 0.01% based on the more timely data from Mortgage News Daily.  We expect Freddie’s weekly numbers will challenge multi-decade highs next week.

Why is all this happening?  In a nutshell, the Fed Funds Rate is a blunt instrument tasked with fighting inflation.  Inflation has been coming down, but it’s still high and a bit of a rebound can’t be ruled out due to things like higher fuel prices, auto worker strikes, and an adjustment in the way certain health care costs are calculated.  In addition, the Fed is not yet seeing the type of downturn in economic data that would suggest impending disinflation.  

That last point is a matter of debate as some critics say the Fed has already done enough and simply needs to give their policy more time to have an impact.  The Fed admits that this economic cycle is different than past cycles and that there’s no way to know with certainty when it’s time for a friendly shift.

Regardless of who’s right about the timing of a policy shift and whether enough has already been done, most can agree that it will be economic data that serves as the trigger for a change.  Not just any economic data will do.  The Fed and the market are both focused on several of the highest impact reports.  Most of them will be released on the first week of October.  If they take a turn for the worse, rates would likely recover.  If they continue to surprise to the upside, so will rates, unfortunately. 

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

The FOMC also said it would continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities.

During a press conference with reporters on Wednesday, Fed Chair Jerome Powell said that the committee decided to leave their policy interest rate unchanged. However, looking ahead, he did not exclude the possibility of another hike.

In spite of a higher-than-expected CPI reading in August, core inflation readings have been falling every month in 2023. Meanwhile, the pace at which new jobs were added to the economy slowed. Other labor market indicators, such as job openings and the unemployment rate, also point to a cooling economy, Danielle Hale, chief economist at Realtor.com noted.

Today’s decision not to raise rates will likely influence credit markets.

“In the mortgage market, for instance, consumers who have been holding off may begin to be motivated by the announcement to consider making the home purchase they have been waiting on,” Michele Raneri, vice president and head of U.S. research and consulting at TransUnion, said. 

In fact, mortgage applications picked up in the week leading up to the Fed meeting, signaling a wave of optimism. 

The CME FedWatch Tool showed a 99% chance the Fed would halt its hikes to the 5.25 to 5.5% range on Wednesday morning, according to interest rate traders. However, only 70.9% of these investors bet officials will freeze the rate hike at the November 1st meeting. 

On Monday, mortgage rates for 30-year fixed-rate mortgages were at 7.21%, according to HousingWire‘s Mortgage Rates Center. However, at Mortgage News Daily, mortgage rates were higher on Tuesday, at 7.30%.

The effects of tighter policy have already reverberated across the economy. While mortgage rates have steadied just below recent highs, they remain more than 3 percentage points above their pandemic-era lows. In the housing sector, the combined impact of higher rates and higher home prices drove the cost of financing a home up more than $400, or 22.5%, from a year ago.

Overall, the market has been rather optimistic about the rate picture this year. However, a number of experts are concerned that lifting rates too high could send the economy into recession.

Inflation picked up to 3.7% in August, down significantly from where it was a year ago but still higher than the 2% threshold. Core inflation—which excludes food and energy costs—rose 4.3% in August. Raising interest rates is designed to tackle those still-high prices outside of the volatile food and energy sectors.

If shelter was excluded from the CPI calculation, inflation would be about 1% in August, said Bright MLS Chief Economist Lisa Sturtevant last week. In August, the rent index was up 7.2%, rising for the 40th consecutive month. Meanwhile, rent growth slowed considerably and median rents nationally fell year-over-year in August, according to Sturtevant. Additionally, apartment construction is strong, which puts an additional pressure on landlords to avoid vacancy. In the second quarter of 2023, the national vacancy rate was 6.3%, up from 5.6% a year earlier. However, it takes months for those aggregate rent trends to show up in the CPI measures.

What’s next?

Although the Fed decided to hold steady this time, it remains fixated on taming inflation and bringing it back to the 2% target. In light of this goal, Realtor.com’s Hale expects the Fed to keep the option for an additional future rate hike on the table. 

During the press conference, Powell remained  extremely cautious, insisting on the Fed’s data dependent approach. He reiterated that the decisions that will be made at the two remaining meetings in 2023 will depend on the totality of all the data gathered, including the inflation data, the labor market data, the growth data, the balance of risks, etc. As is custom now, he sidestepped questions from reporters about what would prompt the FOMC to raise rates again before the end of 2023 or hold them steady.

Powell also shared the committee’s economic projections, showing a longer period of elevated rates.

“FOMC participants expect the rebalancing in the labor market to continue, easing upward pressure on inflation,” Powell said. “The median unemployment rate projection in the summary economic projections rises from 3.8% at the end of this year to 4.1% over the next two years.”

Meanwhile, the median projection for total PCE inflation is 3.3% this year, 2.5% next year and to reach 2% in 2026, he added.

Even though inflation remains well above the Fed’s longrunning goal of 2%, he acknowledged that inflation has moderated since the middle of last year.

On the housing market, he noted that activity “picked up somewhat” although it remains well below the levels of a year ago, largely reflecting higher mortgage rates. 

Indeed, Sturtevant highlighted the resilience of the housing market in the face of rising interest rates. “Over the past year, buyer interest has remained high, home prices continued to rise in most markets, and homebuilding activity has surged,” she said.

However, she underlined that, even with today’s pause, the aggressive rate hikes have had major and somewhat deferred impacts on the housing market. 

As demand might decline in the fall, Sturtevant expects home prices to fall in some markets. However, price declines will remain modest as supply will remain low, she added. 

“The biggest downfall of the market cooling is that many individuals and families–particularly first-time homebuyers–have been priced out of the market as a result of the Fed’s aggressive rate increase,” she said.

This afternoon’s projections give valuable insight into the amount of improvement in inflation that the Fed would want to see before pausing or ending the current tightening. 

“The Federal Reserve is rightly on pause and is looking for more data before determining its next course on interest rates,” NAR Chief Economist Lawrence Yun said. “With fewer job openings, slowing job gains, and softening core consumer price inflation, the Fed must consider the potential economic damage arising from any future rate hikes.”

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

The Halloween spirit began to possess Goodwill Southern California back in August.

In Lincoln Heights, a creepy doll with blood-red tears and a stuffed animal in a Grim Reaper cloak posed amongst the seasonal tchotchkes. At the regional flagship store in Glassell Park, a witch and a flapper were amongst the mannequins dressed in their Halloween party finest to welcome shoppers.

“Halloween is like Christmas for us,” says Marla Eby, director of marketing and media relations for Goodwill Southern California, which covers Los Angeles County north of Rosecrans, as well as Riverside and San Bernardino counties.

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While seasonal items might pop up at one of the 80+ stores in Goodwill Southern California’s territory throughout the year, staffers often save Halloween donations for the two months leading up to the holiday. It’s a popular spot for costume shopping; in fact, that’s the focus of Goodwill Southern California’s September and October lookbooks. But like most thrift, vintage and antique shops, it’s also a great place to source decorations. As we toured the Glassell Park facility, I spotted a small chandelier, a smattering of goblets and an ornate mirror amongst the Halloween merchandise.

There are a lot of benefits to shopping secondhand for Halloween decorations. Choosing a pre-owned item over something new is an environmentally friendly option since you’re extending the lifespan of a good and potentially saving it from a landfill. Depending on when, where and how you shop, it can be easier on your wallet, too. But perhaps the most attractive benefit of shopping secondhand is the knowledge that you’ll find something far more interesting than the seasonal products at big box stores.

“They’re a statement piece,” says Chuck Garcera, who co-owns King Richard’s Antique Center in Whittier. “It’s exciting because it’s broken-in. It’s got some character.”

At King Richard’s, where more than 140 dealers occupy 302 spaces in the four-story complex, the Halloween season starts around mid-September. However, some vendors, like Creep & Kitsch, located downstairs from the main floor, offer spooky items all year. On a trip to King Richard’s in August, I came across potential Halloween decorations throughout the market, including a Wigglin’ Hand, a painting of a skull surrounded by candles and even a prop electric chair.

But shopping secondhand for Halloween can be tricky. If this is your favorite holiday, you might be on the lookout for themed goods all year. If not, know that you should start your shopping early. “Now is the time to shop because I promise, the closer it gets to Halloween, the more treasure hunting you have to do,” says Eby.

If you’re working with a small budget, Goodwill Southern California has a plenty of affordable options, including monthly coupons for those who sign up to their email list and discounts for military, seniors and students. They also have color tag sales. When you’re shopping, you’ll probably notice that the tags are coded in various colors. Each week, one of those colors is half-off. On Thursdays, a designated color tag will be sold for $1.99. “It’s a really great way to save,” says Eby.

This is also a good option for those who like to reimagine secondhand items for Halloween. Eby points to a recent social media trend where people paint spooky images on existing artwork. You can find base pieces for these projects amongst the home decor at Goodwill.

For those with a larger budget or who want items that can hang around the house long after October 31, vintage and antique shops might be the best option. Your choices here aren’t just the ones that scream Halloween. Vintage horror movie posters and memorabilia, memento mori and home items with a Victorian look are just a few things that can take you through the spooky season and beyond.

Wherever you shop, look beyond the designated Halloween displays. Pick up horror movies on VHS, DVD or Blu-Ray to play in the background at parties. Seek worn books, particularly ones with creepy cover illustrations, that can be used as coffee table decorations. Thrift clothes and accessories to outfit any prop witches and creatures you might be building. Look for old dolls and toys to reappropriate as Halloween decorations. Sift through photographs, film slides and postcards, which can be used in a variety of different projects.

Whether you are thrifting or antiquing, you should use the same plan. Note the best shopping options in your area, including both brick-and-mortar stores and events like flea markets. Make time to shop and break up the excursions over a period of weeks if that’s easiest on your schedule.

Be sure to shop with an open mind. You never know what you’ll find inside a thrift store or an antique shop. The most important advice, though, is to be prepared to buy what you love when you see it.

Says Garcera, “It’s like we tell customers, if you see something at an antique store, you better buy it now. It might not be there tomorrow.”

Source: sandiegouniontribune.com

Apache is functioning normally

Apache is functioning normally

Witness the pinnacle of opulence, ingenuity, and artistic brilliance as Kohler, the global frontrunner in kitchen and bath solutions, introduces its highly anticipated third Experience Centre in India on August 11. Nestled in the vibrant heart of Bengaluru, at Trinity Circle on MG Road, the Kohler Experience Centre (KEC) sprawls across an expansive 10,000 sq. ft, promising an unparalleled wellspring of inspiration for elevating bath space decor, where luxury transcends boundaries. Serving as a haven of immersive encounters, the KEC beckons architects, designers, and consumers alike to engage with products, exchange creative ideas, and embark on personalized ventures imbued with their unique aesthetic sensibilities.

David Kohler, Chair and CEO of Kohler Co, expressed, “KEC Bengaluru marks the third installment in India and the thirteenth globally, underscoring our unwavering dedication to providing extraordinary experiences for our esteemed customers in India. As we celebrate our 150th anniversary, we remain committed to serving our customers through targeted investments, robust distribution, and the offering of distinctive products tailored for India. We eagerly anticipate welcoming the creative community to explore and draw inspiration from the boundless possibilities of transforming their spaces into havens of style, functionality, and unparalleled quality.“

Salil Sadanandan, President of K&B South Asia and Asia Pacific at Kohler, further elaborated, “At the Kohler Experience Centre, innovation, design, and craftsmanship converge to craft a unique encounter. We are confident that this new space will become a realm of luxurious indulgence and synonymous with refined living. It will empower our consumers to explore an array of cutting-edge solutions for bath spaces, meticulously customized to resonate with their design preferences.“

The KEC bears exceptional significance as it breathes life into Kohler’s 150th-anniversary celebrations under the theme of “Come All Creators.” Beyond showcasing captivating creations from artistic collaborations with talents spanning India, the USA, Brazil, and China, the center features five inspirational suites envisioned by renowned Indian and international architects: Talati and Partners LLP, DSP Design associates, Miaja Design Group, Fab Designs, and Venkataramanan Associates. These suites are meticulously conceived to display the limitless possibilities in luxury bathrooms, each presenting Kohler’s finest products within a distinctive thematic context.

Vishal Chadha, Managing Director of K&B for India and South Asia at Kohler, enthused, “We are genuinely thrilled to unveil the doors to this distinctive space, where Art, Technology, and premium bath products harmoniously merge. Through the Experience Centre, our vision is to inspire consumers and empower them to transform their dreams into reality.“

The Bengaluru-based KEC proudly showcases a series of artist-edition sinks, reflecting Kohler’s dedication to collaborating with artists and infusing artistry into their products. These handcrafted decorative sinks transcend mere aesthetic appeal; they are meticulously crafted from premium materials and draw inspiration from cultures and heritage across the globe, rendering them as distinct as their homeowners. Notable mentions include “Aranya” and “Quila” by Pushpa Kumari and Padma Shri Jai Prakash, respectively, showcasing Mithila and Miniature painting styles, leaving an indelible mark at the forefront of KEC Bengaluru.

Embodying Kohler’s rich legacy in colors, the KEC radiates a harmonious blend of India-inspired hues, such as Thunder Grey evoking the monsoon’s spirit, Peacock reminiscent of India’s national bird, and Indigo capturing the essence of natural dyes. Global finishes like Rose Gold and Matte Black enhance the allure of the KEC, bearing testament to the brand’s color-centric heritage since 1927. These finishes serve to enrich bath spaces while fostering a sense of unity and delight.

The Experience Centre stands as a treasury of live, fully functional displays showcasing an array of showers and Intelligent toilets, alongside a selection of the most innovative, design-forward products sourced both globally and regionally. Among the highlights is the Statement showering system, which redefines indulgence through its opulent spray functions, creating immersive environments for rinsing, massaging, and rejuvenating. The Anthem digital controls offer preconfigured hydrotherapy journeys that introduce new dimensions of wellness to daily routines. Additionally, the live area boasts an exquisite collection of bathtubs in diverse shapes and sizes, harnessing the power of water to calm the mind, refresh the body, and revitalize the spirit.

 

Source: indianretailer.com

Apache is functioning normally

Apache is functioning normally

The housing market will remain subdued until the Federal Reserve starts cutting rates next year, according to economists and housing pros following the central bank’s Wednesday announcement to leave the benchmark rate unchanged in the target range of 5.25%-5.5%.

Until interest rates come down, affordability challenges will continue to put first-time buyers on the sidelines, housing industry observers said. Real estate experts reiterated caution against further rate increases. 

While Fed Chair Jerome Powell emphasized incoming data will determine whether the central bank will raise its federal funds rate at its next FOMC meeting in November, the “dot-plot” of rate projections showed policymakers foresee one more hike by the year-end. The bulk of central bank officials expect to have interest rates finishing the year at around 5.6%.

In an elevated rate environment, the lack of inventory continues to be the biggest challenge for many potential buyers, the Mortgage Bankers Association said. 

“While homebuilder sentiment is clearly impacted by the recent surge in mortgage rates, permits for single-family homes provide a positive outlook for the pace of construction in the year ahead. If mortgage rates trend down in 2024 as we anticipate, the combination of more homes for sale and somewhat lower rates should support stronger purchase volume,” Mike Fratantoni, SVP and chief economist at the MBA.

The MBA expects mortgage rates should begin to reflect that the Fed’s moves in 2024 will be cuts – not further increases. MBA’s mortgage finance forecast projected the 30-year fixed mortgage rate to decline to 5.4% in 2024 and 5.1% in 2025.

Powell also noted in a press conference that because people locked in “very low rate mortgages, even if they want to move now, that would be hard because the new mortgage would be so expensive.”

Rates are most likely to stay elevated until 2024, said Danielle Hale, chief economist at Realtor.com, thus putting a damper on the number of home sales transactions.

“Higher mortgage rates have radically altered homebuyer purchasing power and have been a key factor in existing home sales dropping from a more than 6.5 million unit pace in early 2022  to the roughly 4 million unit pace in recent months,” Hale said. 

More importantly, higher mortgage rates continue to keep existing homeowners sidelined, with as many as one in seven buyers out of the market because they don’t want to borrow at today’s much higher rates, Hale noted. 

Short-term mortgage rate movement

In the short-term, mortgage rates are likely to bounce around a bit as the markets digest upcoming economic data, Melissa Cohn, regional vice president of William Raveis Mortgage, said. 

Incoming data of job and CPI reports next month will provide more clarity on how strong the economy is. Reports on jobs and inflation will be released on October 6 and October 12, respectively. 

“If the data reveals that inflation remains elevated and employment is still growing, then mortgage rates are likely to move up and we can look for what we hope to be the last rate hike of this cycle,” Cohn said.

The rapid ascent is mostly behind us but it will be a while before the economy sees any sign of a gradual descent, Marty Green, principal at mortgage law firm Polunsky Beitel Green, added.

“In my view, this means the mortgage interest rate environment will continue to bounce sideways through the next several months,” Green said.

Mortgage rates have been on an upward trend this year with rates in August surging to 7.23%—the highest since 2001.

Fed officials expect interest rates to be at 5.1% in 2024, up from the 4.6% projected in June. Officials expect fewer cuts in 2025 with the median estimate for the benchmark rate to be at 3.9%, up from 3.4%. 

The committee raised its projections for growth, and is looking for a better-than-expected labor market as well, with the jobless rate peaking at 4.1%, rather than 4.5%.

Pushback against further rate increases

With two more scheduled FOMC meetings in November and December, housing experts cautioned against further rate increases.

The Fed must consider the potential economic damage arising from any future rate hikes, Lawrence Yun, chief economist at National Association of Realtors, reiterated his position. 

“Commercial real estate has come under stress from higher interest rates, which will further negatively impact community banks due to their large exposure to the sector. Therefore, the Fed needs to wait and not raise rates. Possible interest rate cuts then need to be considered once inflation is fully under control,” Yun said.

Overall data point to an accelerating slowdown but continues to be mixed because of some lagging indicators, Green noted.

Unemployment rates and the CPI component lags measures of market rents by around a year.

“With rates elevated into restrictive territory, I expect the Fed to be patient and hold off on any additional increases until it becomes clearer that an additional rate hike is warranted,” Green said. 

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

According to the Lost & Found survey by Pixie, nearly one in four Americans misplace their house or car keys twice a week. Having a spare key is quite handy if you find yourself locked out of your apartment.

Where do you hide a spare key when you live in an apartment?

Hiding a spare key in your car or at a house is typically pretty easy, but knowing where to hide a spare key for an apartment is trickier. After all, there aren’t as many nooks and crannies where a spare key can go. Plus, you want to make it easy to find but not obvious to anyone who might be looking for it. However, with a little creativity, there are some great spots where you can hide a spare key for your apartment.

1. Tuck it in your décor

If you routinely decorate your apartment entrance, this could provide an ideal hiding place for your spare key. For instance, you could tape it inside your door knocker or attach it to your wind chimes. If you change out your décor to reflect the season or holidays and tucked your spare key in a wreath or other item, don’t forget to move it from the old décor and place it in the new.

2. Put it in a fake rock along the walkway

Fake rocks are a great option for hiding a spare key for your apartment. However, you shouldn’t place those fake rocks just anywhere — you don’t want to set one near your doorway because it will look out of place, immediately grabbing the attention of would-be thieves. A better location is the landscaping along the walkway to your building or alongside the building. Placing it on the ground among other rocks or under shrubs will camouflage your container. The goal is to make sure it looks natural wherever you place it.

3. Slip it in a magnetic key box under a staircase

Many people often slip a spare car key into a magnetic key box and hide that box somewhere in their car. You can use this same technique by putting your spare apartment key in a magnetic box and hiding it under a metal staircase. Or, you could attach it to the back of a light along the lighted corridor. Another good spot is on the rear of a metal gutter. Essentially, any magnetic surface will work, but make sure it’s not a spot that others may access often. For instance, don’t put it near electrical boxes that may require routine maintenance.

4. Hide it among your outdoor furniture

If you have a patio that’s easily accessible from the exterior of your apartment, you could hide a spare key on the furniture. Tape it under a chair or under your storage box for cushions. Another option is taping it to the underside of your barbecue grill. If you do, check the adhesive on the tape periodically to make sure it’s still securely taped to the grill. A birdhouse is another good hiding spot. Slip your key in there for when you need it, but make sure it’s easy to get out. Just skip the obvious places like under a potted plant or doormat.

5. Stash it under a balcony or deck

For apartment buildings with balconies or decks, you can stash a key in the nooks and crannies underneath the structures. When placing a spare key, check to make sure it won’t fall out easily or get washed away when it rains. Depending on the structure, you might be able to drive a nail into one of the wood posts and hang the key on it.

6. Leave a spare key with your neighbor

If you have a neighbor you know and trust, ask them to keep a spare key to your apartment. Not only will this be handy if you actually lock yourself out of your apartment, but they can help you out if you need someone to put a delivery in your apartment or check on your pets while you’re gone.

Where not to put a spare key for your apartment

When hiding a spare key for your apartment, skip the obvious spots that a would-be burglar may check. These include under the doormat, in or under a potted plant near the door or along the door jam. Although your apartment key would be out of sight, it likely wouldn’t be out of mind for someone trying to gain access to your apartment.

Also, while a fake wall socket or fake clock with a safe can provide a great hiding place, you need to install them in the wall, meaning you’ll need to cut a hole in the wall to place it. If you want to try this option, make sure you talk to your landlord before you make permanent cuts.

The right spot for the spare key for your apartment

Figuring out where to hide a spare key to your apartment might seem difficult at first, but it might be easier than you think. Take a look around your apartment and building and see what good hiding spots you can find. From a metal staircase to a flowerbed to the lights in your hallway, you’ll be surprised at how many places you can find to hide a spare apartment key.

An experienced freelance writer, Karon Warren has covered home and real estate topics for more than 20 years for such outlets as Curbed Atlanta, Apartment Therapy, RealTrends and HotPads.com. She is a member of the American Society of Journalists & Authors.

Source: rent.com

Apache is functioning normally

Apache is functioning normally

HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

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HELOC, Manufactured, Technology, Marketing, and Digital Tools; Central Banks and Inflation

By:
Rob Chrisman

7 Hours, 56 Min ago

If you want something sobering, almost mesmerizing, here’s a short drone video of the flood damage in Libya (at the 15 second mark you can see how it tore through the city). Fortunately not so sobering are some stats out of the United States. The U.S. homeownership rate in 2022 was even higher than before the COVID-19 pandemic at 65.8 percent compared to 64.6 percent in 2019. That rebound was driven largely by those aged 44 and younger. And who says Millennials aren’t buying homes? Homeownership continued to climb from the foreclosure crisis (2004) and Great Recession (2008), when rates dipped as low as 63.4 percent in 2016. Homeownership rates recovered approximately half of the 5.6 percent decrease from 2004 to 2016. In Hawai’i the homeownership rate is 59 percent, I bring up the Aloha State because American Savings Bank, First Hawaiian Bank, and Central Pacific Bank joined Hawaiʻi Community Lending, a Hawaiʻi-based nonprofit community development financial institution, in pledging to provide mortgage forbearances to Maui families impacted by the recent wildfires. (Today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Today’s podcast features Greg Korn and Ben Petit in an interview from the New England Mortgage Bankers Conference.)

Lender and Broker Software, Products, and Services

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“Did you hear Capacity’s big announcement at TMC Fall? We’ve acquired Denim Social! Together, we’re building a support automation platform that helps you automate support, connect more authentically with your borrowers, and close more loans, faster. Read the press release to learn more! We also gave away a personalized AI Assessment worth $10,000 to help mortgage lenders identify opportunities for improving their business with AI. Plus, our new GSE Search feature pulls accurate, up to date GSE regulations within seconds using generative AI. Want to join the AI in mortgage revolution? Meet the Capacity team today.”

A new era in loan origination has arrived. Mortgage Machine Services, an industry leader in digital origination technology to residential mortgage lenders, announced the launch of its namesake platform Mortgage Machine™, an out-of-the-box, all-in-one LOS designed to accelerate lenders’ operational velocity and support an end-to-end digital origination process. Developed by digital mortgage pioneer and industry veteran Jeff Bode, Mortgage Machine utilizes intelligent automation, configurable business workflows and a cloud-based infrastructure to optimize the entire loan lifecycle and create a seamless lending experience. Key platform features include AI-powered task automation, a scalable cloud-based infrastructure, flexible APIs, pre-configured workflows for retail and TPO channels, integrated document management and POS functionality. Mortgage Machine also offers all-in-one eClosing capabilities, including an eClose room, eNotes, eVault and RON, and utilizes MISMO SMART Doc® data and security standards. Visit here to get started on your digital transformation journey.

Blend Labs continues to be the mortgage industry’s leading technology platform. Core to the platform is Blend’s unique integration with Desktop Underwriter® (DU®) and LPA. These integrations help streamline your approval process for borrowers, with all the conditions lined up for your fulfillment team. Add in intelligent and automated follow-ups and you’ll get to the closing table faster and more efficiently. Putting this information at the loan officer’s fingertips creates a streamlined process and eliminates manual work which equals lower costs, higher pull-through, and increased revenue. See more ways that Blend is committing to innovation and continues to lead the way.

Looking for timely advice on how to capture more loan volume and improve your bottom line in a down market? Now is the time to explore ways to tap into new markets. Expanding your mortgage footprint through new products and channels or by reaching new geographies insulates your business against economic and interest rate volatility by diversifying your sources of volume and revenue. By setting the groundwork to connect with new borrower markets now, you’ll open new revenue possibilities for when the market inevitably recovers, positioning your business to hit the ground running and beat out the competition. Download this informative eBook from mortgage solutions provider Maxwell for actionable advice, including how to create your expansion plan and choose the offerings best suited to the markets you want to pursue. Click here to download Growing Your Mortgage Footprint: How to Launch New Loan Products, Channels & Geographic Expansions.

Broker and Correspondent Products

Build your book with AFR Wholesale® (AFR)! Now, get the chance to listen from and ask questions directly to AFR and Freddie Mac to turn those prospects to active pipeline at the next Why Wait webinar series covering Manufactured Home Financing on Wednesday, September 20th at 1 PM EST. Register here today! Have you and your borrowers looked into Manufactured Housing as an option? With unbeatable affordability, customization options that are very tailored, quick installation and trusted quality, manufactured homes are worth exploring. Especially with a top lending partner in AFR who has been an industry leader for over 25 years. This is a live webinar, and a recording will not be provided so make sure to join and get great insight and have the opportunity to ask questions and listen to scenarios! Visit AFR Wholesale, email [email protected], or dial 1-800-375-6071. AFR Wholesale® – Don’t wait. Register today!

“With Cash-Outs on the decline during this high interest rate environment, it is important to present your borrowers with different cash-out options. That is why Vista Point is announcing a brand new HELOC product coming soon, in addition to our existing Closed-End Second. Our HELOC product is being designed as a complement to our Closed-End Second to provide a full suite of Equity Solutions. Our HELOC will provide a specific solution for borrowers that want the optionality of an interest-only payment, or the ability to draw up and buy down their line during the 5-year draw period with no Appraisals up to $250k. Just like on our Closed-End Second offering, with HELOC loan amounts up to $550K and combined lien amounts up to $2.5M, your borrowers can get the cash they need without sacrificing their advantageous 1st mortgage rate. HELOC will be available for full doc and bank statements on OO and 2nd homes. For more information, reach out to us, or meet us at the Philly MBA to discuss.”

Capital Markets

We learned last week that prices in August rose by the largest monthly percentage in 15 months. However, that month-over-month inflation was widely expected due to a surge in gasoline prices. Underlying oil prices are also pointing towards further increases in September. Meanwhile, core prices were up 0.3 percent and core goods prices declined by 0.1 percent. Over the last three months core prices have increased at an annualized pace of 2.4 percent, the lowest three-month pace since March 2021. Retail sales rose faster than analysts’ expectations in August, also due to higher gas prices. Many analysts expect consumer spending to slow as excess savings built up over the pandemic have materially declined and credit is increasingly costly and difficult to obtain. Additionally, the resumption of student loan payments is expected to cut into discretionary spending. It will take more than expectations of slower spending before the Federal Reserve feels inflation is firmly under control.

What could move mortgage rates this week? The U.S. Federal Reserve, Bank of England, Bank of Japan, and the central banks of Norway, Sweden, and Switzerland are all announcing rate decisions after a spate of recent inflation data shows that price increases are alive and well. The Fed’s Federal Open Market Committee (FOMC), the action arm of “the Fed,” is not expected to raise rates. It’s unlikely that the commentary around the commitment to keep fighting inflation and higher rates for longer will change either, but it could tilt a little more to the hawkish side after a stronger-than-anticipated inflation report for August.

The week could also see some extra drama on the political front as the countdown continues toward a potential government shutdown on October 1 in addition to the battle between the United Auto Workers (UAW) union and Detroit automakers. The auto worker strike could complicate Fed Chair Powell’s bid for a soft landing. Union leaders are asking for a 36 percent wage increase over four years, to match the similar recent pay increase for top executives. The union also wants pay to rise automatically with inflation in the future, as it did before the financial crisis.

This week brings the aforementioned FOMC meeting that begins tomorrow and concludes on Wednesday with the Statement, updated SEP (where fed funds projections will be closely scrutinized), and Chair Powell’s press conference. The treasury will also be in the headlines with more coupon auctions scheduled: $13 billion reopened 20-year bonds tomorrow and $15 billion reopened 10-year TIPS on Thursday. The only scheduled, probably non-market moving, news out today is the NAHB Housing Market Index for September. We begin the week with Agency MBS prices roughly unchanged from Friday, the 10-year yielding 4.34 after closing last week at 4.33 percent, and the 2-year is at 5.00 percent.

Employment

Are you more energized, more encouraged, and more motivated to succeed today than yesterday? Zig Ziglar famously stated, “People often say that motivation doesn’t last. Well, neither does bathing; that’s why we recommend it daily.” “As an industry leader, Thrive knows that motivation, discipline, and belief in your ability to succeed is critical,” stated Randell Gillespie, National Sales Leader for Thrive Mortgage. “There is no better time than now to find ways to continually motivate your team, which is why we put so much focus on daily opportunities like these at Thrive. Through our weekly High-Performance Coaching Calls, our very own nationally-recognized Marketing Master, James Duncan, leads these motivating and educational experiences for results. The biggest names in the mortgage industry and thought-leadership have been part of our Thrive Nation broadcasts. We want everyone to be better today than yesterday. Start a conversation with us and find out how.

“The fall season is here, and now more than ever is the time to build rapport with your referral partners and clients to maintain a steady stream of business. At Guaranteed Rate Affinity, not only do we have the greatest number of products, but we have the tech platform for our loan officers to do business from anywhere. With PowerVP, you can do anything from creating loan applications to sending pre-approval letters all from your mobile phone. Anything you could do from your desk, you can now do on the go with PowerVP. Gone are the days of being chained to your desk and missing out on important moments. Primarily, it gives you a work-life balance you never thought possible. Luckily, we’re hiring the best of the best loan officers to leverage our tech platform to grow their business. Ready to learn more? Contact Tim McGraw to get started.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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Apache is functioning normally

Posted on: September 18, 2023

The Federal Open Market Committee’s next meeting is scheduled for September 19, 2023. A policy update, which will include any rate adjustments, is expected to be announced on September 20. As the next meeting date approaches, all eyes are on the decision-makers at the Federal Reserve.

Let’s explore what experts expect in the coming meeting and what that could mean for home buyers.

Check your VA home buying eligibility. Start here (Sep 18th, 2023)

What the experts expect

The CME FedWatch Tool, a tool investors use to predict Fed policy changes, indicates that there is over a 90% chance that the Fed will keep interest rates the same at the meeting later this month. As of September 6, there’s less than a 10% chance the Fed will increase the federal funds rate.

Although this tool is helpful, it’s not a foolproof estimation. In August, Jerome H. Powell, chair of the Federal Reserve, made a speech at the Jackson Hole Symposium. Powell kicked things off by saying, “It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so. We have tightened policy significantly over the past year. Although inflation has moved down from its peak — a welcome development — it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

It’s impossible to know what will ultimately come out of the FOMC meeting. But many expect rates to stand where they are.

Could mortgage rates fall?

Mortgage interest rates have been on the rise since March 2022. Until that point, American home buyers were enjoying historically low interest rates on home loans. But that all changed when interest rates started climbing.

Since March 2022, mortgage interest rates have increased dramatically. From an average of 3.76% on 30-year fixed-rate loans in March 2022, rates are currently sitting at 7.18% for the same loan type. Rising rates mean more expensive loan options for prospective homeowners. In some households, higher interest rates have put a home purchase out of reach.

If the Federal Reserve pauses its ongoing battle against inflation, interest rates will remain steady at the upcoming meeting. For potential home buyers, this pause will allow mortgage rates to remain where they are for now. The interest rate stability could be a game-changer for anyone looking to buy a home.

Beyond holding rates steady, some experts foresee a pause in interest rate hikes, leading to a drop in home loan interest rates. More stability in the market could allow lenders to offer slightly lower rates for home buyers.

Check your VA mortgage rates. Start here (Sep 18th, 2023)

What this means for you

If you are looking to take out a loan of any kind, a pause on interest rate hikes is a welcome reprieve. At the very least, you won’t face any higher interest rates. But in the best-case scenario, you can take advantage of the market’s temporary stability to lock in a slightly lower interest rate.

For anyone looking to purchase a home, a pause in rate hikes could be the signal that the cooling housing market has been waiting for. Any dip in mortgage rates could reignite the hot market conditions that persisted throughout 2021.

If you want to make a mortgage move, by either purchasing a new house or refinancing your current mortgage loan, a pause on interest rate hikes might be the appropriate time to act on your plans.

Future rate hikes

If the Federal Reserve doesn’t increase interest rates at the upcoming meeting, it will mark a big change. We’ve been seeing rates climb for over a year. A pause to higher rates would be a welcome reprieve.

Of course, we can only wait to see what the Fed will do at the next meeting. But even if interest rate hikes are paused for this meeting, it’s possible rate hikes will continue at the next meeting. After all, Powell’s recent speech made it clear that taming inflation is still the top priority for the Federal Reserve.

If you are planning to take out a home loan in the near future, keeping an eye on the changing interest rate market could make a big difference. A higher interest rate could eat into your home purchase budget, which means locking in the lowest possible rate is critical.

Check your VA home buying eligibility. Start here (Sep 18th, 2023)

Source: militaryvaloan.com

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A proposed set of higher risk weights for mortgage-related assets at banks could broadly compound current strains on home affordability and conflict with other policies and rulemaking promoting it, critics testified at a congressional hearing Thursday.

The new rules not only increase portfolio lending expenditures for low down payment loans, but aspects like a possible change affecting servicing rights also add costs for lenders and the market at large, said Bob Broeksmit, president and CEO, Mortgage Bankers Association.

The rights and associated work of handling loan payments are a key cost for the mortgage industry at large and if depositories further withdraw from investments in them, costs for nonbank lenders already struggling to profit due to higher rates could rise, he said.

“The mortgage servicing value is an integral part of how every mortgage is priced, not just mortgages made by these banks,” Broeksmit said at a House Financial Services subcommittee hearing. The subcommittee involved is focused on financial institutions and monetary policy.

Mortgage servicing rights already have a relatively high risk weighting under current bank capital rules that discourage holding them in amounts above 25% of Tier One common equity. The proposal would lower the cap to 10% of common stock or other assets in that category.

Broeksmit also reiterated his past criticisms of moving from a risk-weighting of 50% for most home mortgages outside the income-producing sector, to a proposed step-up of percentages in that category by loan-to-value ratio that’s in excess of global Basel III rules.

“If these increased capital requirements go into effect, banks will make fewer mortgage loans or they will raise the price,” said Broeksmit.

He also doubled-down on his previously stated concerns about the fact that the new requirements don’t account for the additional protection private mortgage insurance can provide to loans with lower down payments.

Others testifying said the capital rules could put a strain on mortgages that have balloon payments due in a higher rate market.

“In a time of historic inflation, the fastest increase in interest rates in modern history, and a growing likelihood of the credit crunch, now is not the time to raise capital levels,” said Committee Chair Rep. Andy Barr, R.-Ky. “Such action threatens to further constrain credit availability and put already-sensitive sectors such as commercial real estate in further peril.”

The new capital rules also could be a constraint on lines of credit used both by businesses and consumers, Broeksmit said.

“If I understand this voluminous proposal correctly, banks would be required to hold capital on the maximum amount that could be drawn rather than the amount that is outstanding. That could have a really chilling effect on … small business credit and also home equity lines of credit where consumers take that out and use it as they need it,” he said.

Other speakers and some Democratic members of Congress debated the assertion that the rule would hurt access to financing.

“We strongly disagree that new capital requirements will undermine credit availability,” said Alexa Philo, senior policy analyst, Americans for Financial Reform, after Rep. Ayanna Pressley, D.-Mass, asked whether the new rules could protect the availability of lending in a downturn.

There’s a significant body of research that has found that domestic financial institutions with higher reserves provided more financing than those with lower capital levels, Philo said.

“Well capitalized, large U.S. banks had higher loan originations and liquidity,” she said.

Source: nationalmortgagenews.com

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If you’ve ever had the privilege to experience a taste of la dolce vita in Italy, then you’ll understand the dilemma I am facing; I want to shop for everything. The homes and hotels of Italian tastemakers have well and truly stolen my heart, so I set myself a little challenge to narrow down these trends to just five – five key home decor trends that I would slowly incorporate into my own home. 

You may already be familiar with, or even own, a few of these Italian-influenced designs. See which ones are having a moment below – at least for me – and get inspiration for how to decorate with them in your own space.

decorating with neutrals. One important aspect to consider when decorating with a subtle or muted color palette is to bring in as much texture as possible as it creates interest and layers – important factors when strong room colors are out of the picture. 

Texture in interior design is crucial if you want to create a modern rustic room that is also contemporary yet cozy. Quite simply, without texture, your space will fall flat. It’s vital to look at the room as a whole and bring an area together with mixed materials for energy and warmth.

‘Texture can determine how a modern rustic room looks and feels, so invest in plenty of raw materials alongside natural reclaimed wood, linen, wool – and elements of greenery,’ says homeowner Lauren Meichtry, founder of Elsie Home.

3. Kitchens with character

Tailor-made kitchen by Officine Gullo in Florence

(Image credit: Officine Gullo)

Decorative kitchens, with plenty of personality, are rife in Italy. For many traditional Italian families, the kitchen is truly the heart and soul of the home. 

No matter the era or status of the home, the kitchen was first and foremost a functional space. It is the engine room of the home, the space that keeps everything running smoothly. It is somewhere that meals are prepared and sometimes eaten, as well as being where the essential household tasks are carried out. However, this is only part of its role – it is also the hub of the house. 

Today, the kitchen is a space to commune and spend time with family and friends. The duality of its role means that it is important that the kitchen not only meets your practical needs but is also beautifully decorated, offering a warm welcome to anyone who passes its threshold.

This delightfully bold and bright kitchen in the heart of Florence’s historical center is a visual feast for the senses. Designed by Officine Gullo, the colors have been chosen to harmoniously chime with the architecture and furnishings that define the room.

‘Colourful kitchen ideas have been enjoying rather a renaissance, and we’re seeing brighter colors on walls, cabinets, and even ceilings,’ says Emma Bulmer, head color consultant at Edward Bulmer Natural Paint. ‘The colors and color combinations being used are also becoming more creative and confident.’

4. Patterned tiles

(Image credit: Studio Indigo)

Often featuring a myriad of intricate patterns, original patterned tiles are highly sought after. Globally, Italian manufacturing and innovation dominate the design industry, and tiles are no exception.

More than any other floor and wallcovering, tiles have undergone a renaissance, becoming a design favorite whether used in a new build or to remodel an existing home. While there are plenty of choices for popular neutral tones, the big tile trend is for tiles that feature the dazzling colors and patterns of traditional Moorish and Italian tiles. 

As reclaimed tiles come from all sorts of properties, they often have a unique story attached to them. ‘We source a lot of tiles from junkyards – a good place to start if you only need a few replacement tiles to mix and match,’ says Andy Triplow from The Vintage Floor Tile Company. ‘However, reclamation companies often only stock a handful of tiles and are unable to offer enough for a complete floor, which is why it is good to start collecting early.’ 

5. Lighting with purpose

(Image credit: Natalia Miyar Studio)

No one does innovative and contemporary design quite like some of the world’s best Italian designers. Lighting with purpose, be it sculptural or to highlight a focal point, is a look that the Italians have perfected. 

With their delicate interplay between form and function, all rooms benefit from a well-executed decorative lighting scheme. During my time away, I was taken aback by the creativity on display when it came to choosing light sources. 

Lighting isn’t just about the light. There are many design-led options for your home and backyard, from decorative pendants to wall lights with an extendable arm. Remember that warm white light will create an inviting glow.

‘Homeowners are seeking unique pieces for their homes that create maximum impact,’ says Ian Cameron, creative director at Cameron Design House. ‘From unusual shapes to innovative materials, there is an increased desire from customers looking to be more daring in their design choices. There will be a demand for unusual and eye-catching light pieces that challenge every day and are show-stopping art forms in themselves.’

Shop the Italian-style decor edit

Achieving the Italian dream in your home is easier than you think. I’ve selected my favorite buys for you to shop below. They are already in my basket…

Ines Chair

Astrid Fringe Stool

Velvet Trova Pillow

Marlow Bouclé Curved Sofa

Vienne Wool Striped Ochre Yellow Area Rug

Punyo Side Table

Source: homesandgardens.com