Cash-Out Refinancing Made Easier for Furloughed Workers During a Government Shutdown?


Cash-out refinancing will be easier for furloughed workers, in the event of another government shutdown in February. Fannie Mae, Freddie Mac, and Better Mortgage have all announced plans to help furloughed workers who own a home more easily qualify for a cash-out refinance. The three have done so by modifying proof of income rules and removing the verification of employment. However, the borrower must have enough cash or assets to cover at least two months of mortgage payments, including taxes and insurance. Why might these workers want to refinance? Think fresh cash towards bills, expenses, and any other costs they’ve incurred.

Multifamily real estate just had its best year since 2000! Any way you look at it, 2018 was the best year for multifamily real estate this century: Renters paid more for housing than they ever have before, Freddie Mac and Fannie Mae had banner years, and commercial and multifamily debt hit an all-time high, all while delinquencies remained at historic lows.

Is student loan debt reducing the number of homeowners? Three analysts from the Federal Reserve Board’s Division of Research and Statistics have now drawn a correlation between their 9-percentage point decline in homeownership and student loan debt.

Loan Insights, Rent Burdens, & More.


Photo Source: Unknown.

CoreLogic’s Loan Performance Insights report for September 2018 was released last week, showing the nation’s labor market and increased home prices overall has had a positive impact on serious delinquent loans and foreclosure rates—the overall delinquency rate is down 0.6 percent since September 2017. The 30-day delinquencies showed an increase of 0.4 percent but is being entirely attributed to Hurricane Florence.

Will more homeowners tap into their home equity in 2019. While increases in home prices might keep some homebuyers from making a move, it’s also resulting in record levels of home equity, and more homeowners are projected to have more opportunity to tap into that equity. Consumers in need of paying off higher interest rate credit card debt or in need of home improvements are prime candidates. This also allows for homeowners who might otherwise upgrade to a bigger home save money by tapping into that home equity and invest in home additions or upgrades.

Builder Confidence dropped four points to 56 according to the National Association of Home Builders Housing Market Index. Buyer Traffic was the only piece below 50, the threshold. Current Sales and Future Sales, however, both remained in the 60s. A reading above 50 signals growth. We should note Builder Confidence dropped significantly in areas with high home prices—the current deterrent of buyers is not mortgage rates thanks to recent declines. The demand is still there but consumers are hesitating due to “rising home costs.”

While the overall level of homelessness across the nation has fallen despite housing costs continuing to increase, the rent burden is becoming so extreme it’s risking thousands of Americans becoming homeless. Many areas are already pass the 32 percent tipping point, where over 32 percent of a household’s income is going to rent. Monroe Country in Florida is almost double, “with a median market rate rent consuming 62.9 percent of the area’s median household income.” That’s insane.

Ann Arbor, MI might rank as the No. 1 best small college town in the nation but it was ranked third overall for best college towns and cities, regardless of size—Austin, TX scored the hot seat. Ann Arbor is noted for its low unemployment rate of only 3 percent but the college town is also known for its social environment and academic and economic opportunities. The city is booming with part-time jobs for college students.

The Federal Reserve meets this week and there’s an 80% expectation they will hike rates another quarter point. Wednesday we find out their decision after their two-day meeting but more importantly, we’re hoping for any indications of what 2019 will look like for rate hikes.

Housing Balance.


Pending Home Sales fell 2.6 percent in October, a disappointing read and a miss. The National Association of Realtors is attributing this decline to the rise in mortgage rates, which really began in October, reducing the pool of eligible homebuyers. Last week we saw a dip in mortgage rates and compared to 18 years ago, rates are still favorable. Back in October 2000, mortgage rates averaged almost 8 percent for a 30-year fixed. What does all this mean? Short-term, experts are having difficulty finding consensus on the housing outlook. Mortgage rates are expected to rise modestly but they don’t know what that translates to for borrowers and homebuyers as it seems many hesitate. Long-term, there’s confidence homebuyers will accept the new norm for mortgage interest rates and continue to buy based on lifestyle and need. The benefit to sales cooling: the inventory of homes for sale is recovering.

Is 2019 the year for balance? That’s what Zillow is predicting as home values begin to slow down and are expected to continue the trend through next year, with mortgage rates expected to keep rising. 2019 should bring a more balanced market among buyers, sellers, and renters. Housing competition will remain strong in the most desirable areas.

The Federal Reserve Minutes from their meeting earlier this month were released yesterday afternoon, showing most Fed members still believe we need 3 more rate hikes, with a December quarter-point rate hike still on deck and expectations for the next one to not be until at least March 2019. While rate hikes are a sign of a healthy economy there is also risk of hiking too early, making December’s possibility of one still debatable.

Earlier this week, we mentioned home renovations are becoming more popular. Here’s some top common-sense tips we have found since:

  • “My dad told me, ‘You can do anything yourself, except foundation, electrical, or plumbing.'” —Kirsten Selvage, homeowner in Ontario, Canada.
  • “It’s cheaper to do it right than it is to do it over.” —Jim Molinelli, architect in Columbia, MD.
  • Renovate with the next buyer in mind but do so long before you sell in order to enjoy the improvements yourself.
  • Over schedule to not feel stressed by lack of time in case any mishaps come up.

Initial Jobless Claims for last week were reported at 234K. While compared to recent months and weeks this is higher than normal, it remains far below that 300K mark highlighting a good, healthy labor market. The ADP and BLS Job Reports are both scheduled for release next week and expectations are 190K and 170K job creations, respectively.

Generation Zs Determined to Own a Home.


Photo Source: Unknown via Instagram.

Four-in-five Generation Zs (those aged 18 to 24) want to own a home and are actively saving for a downpayment “like no generation before them.” Twenty percent of this young generation wants to own their home before they’re 25. Their overwhelming desire and adamancy to save, coupled with the timing of them “graduating into one of the best labor markets in generations”, could give them a leg up.

Renters face more financial uncertainty than homeowners, with over 25 percent of the nation’s renters not confident they could cover a $400 emergency and over 30 percent feeling insecure about food.

Independent females are on the rise. One-in-five homebuyers are single females, outnumbering single male homebuyers two to one.

Zillow has officially entered the mortgage industry, acquiring Mortgage Lenders of America with plans to rebrand the company in 2019. They hope to streamline, shorten, and simplify the homebuyer process. Can’t say we disagree. Good philosophy to have—we find it not only necessary but essential.

Initial Jobless Claims for last week were reported at 214K. It might not be new news but it’s always good news for the economy—and housing—when employers are keeping their employees. More importantly, the BLS Jobs report showed 250K jobs created in October, greatly beating the almost 190K expected. Unemployment remained flat at 3.7 percent—the lowest level in nearly 50 years—and the average Weekly Earnings remained stable at a 3.4 percent annual increase, an 11-year high.

Affordable Downpayment.


Photo Source: Home Bunch via Pinterest.

The Case-Shiller Home Price Index showed a deceleration in home prices and let’s be clear: this is good for home appreciation and housing affordability. It’s good news that it’s cooling off some for homebuyers while still remaining positive for homeowners. Detroit saw a healthy annual 6 percent gain. Las Vegas and San Fran are still seeing double digit annual increase in home prices. Insane.

The economy is booming thanks to unemployment at its lowest since 1969, encouraging consumers to invest and purchase. After a spectacular second quarter, analysts expected a slow down during the third quarter but the economy remained on track to grow 3 percent or more this year and expectation remains for the Federal Reserve to hike rates in December.

The ADP Employment Report showed 227K jobs created in October, greatly exceeding expectations of only 178K.

The average downpayment on a 30-year fixed rate mortgage dropped nearly 10 percent in the third quarter of 2018, along with the average mortgage loan amount falling almost $28K. It’s all about location. We’re still seeing many borrowers who are able to purchase a home by putting down only 5 percent or less.

Homeownership is on the rise, jumping a half percent in the third quarter of 2018 from a year ago, thanks to a healthy economy, affordable housing, low mortgage rates, and increased wages. The hurdle: inventory—that’s not a bad hurdle to face; folks are staying in their homes longer. How long? The average homeowner is opting to stay in their home longer these days: 8.23 years to be exact according to homes sold in the third quarter of 2018. That’s double that of homes sold in 2000.

Financing Home Improvements.

The INSIDER logo

Mortgage Applications increased almost 5 percent last week, with purchase applications up 2 percent and refinance applications up 10 percent. Last week we saw mortgage rates rise slightly, highlighting how obtaining a mortgage is often due to lifestyle circumstances.

Speaking of refinances, more homeowners should be utilizing the equity in their home. A third of homeowners used credit cards to finance home improvements last year, with millennials the most likely to do so. The unfortunate: 62 percent plan to pay it off “over time.” However long that means. How much are homeowners charging? $1,500 to $4,800 on the median $10K home renovation cost. Highlight: median not mean. Those who did $50K or more of home renovations typically charged 28 percent of the costs.

Pending Home Sales—measuring signed contracts on existing single-family homes, condos, and co-ops, and typically a good indicator for the Existing Home Sales report—were up half a percent in September, stronger than expectations of an unchanged report.

New Home Sales decreased 5.5 percent in September, greatly missing expectations of only a 0.6 percent decrease. What’s odd: September saw the highest level of inventory in 7.5 years with 327K new homes for sale, making this a very weak and disappointing report regarding the new home construction market. We would have hoped for more. Given the size of the new construction market in the Southeast, some argue the storms faced in the Southeast played a contributing role to this disappointment. However, they’re not the sole reason. It’s more likely builders noted a cooling market—happens every fall—and have tapered off their efforts before winter comes.

The FHFA (Federal Housing Finance Agency) released their House Price Index, showing home prices rose 0.3 percent in August but were down to 6.1 percent annual change—note this is a decrease in rate and not a negative change in home appreciation, there’s a difference. Home price appreciation is still very strong and healthy.

Initial Jobless Claims for last week were reported at 215K claims. The Bureau of Labor Statistics Job Report for October will be released November 2nd and expectations are for a strong report.

Staged Homes & Forecasted Rate Hikes.

10.01.2018As expected, the Federal Reserve hiked rates last week by 0.25 percent to 2.25 percent. What we’re more interested in is the forecast: 12 of the 16 Fed members forecasted a 4th rate hike this year, expected in December, and 3 rate hikes in 2019. Then you have the outliers in the group, with one believing there will be no more hikes over the next several years and another who thinks 2019 will see 5 rate hikes. Very interesting.

Pending Home Sales report was released last week but was a disappointing miss, down 1.2 percent in August. New Home Sales, however, were up 3.5 percent in August, and are up almost 13 percent year over year. We’re also starting to see a welcomed growth in inventory for Existing and New Home Sales.

Fact: staging your home can not only help you sell your home faster but can also potentially bring in higher bids. What are the tips of the trade to do it yourself? Essentially, lose the clutter but here’s 3 specific tips:

  • Curb appeal! It’s all about first impressions and for the buyer, that’s before they even walk up to the front door.
  • Remove at least 30 percent of your personal belongings: you want to allow the buyer to picture themselves in the home and they can’t do this with your belongings everywhere. This also helps you to create space.
  • Think neutral: the house should remain the focus, keep the walls neutral but use accent colors for décor and for show.

On average, staged homes sell 73 percent faster. Well, when you put it like that, who is ready to pull weeds and move some furniture?

Confident Builders, Confident Older Borrowers.

The number of homeowners over 60 years old are more likely to have a mortgage today than 35 years ago. Why? Basically, it comes down to older generations taking advantage of the equity in their home. The three reasons quoted for influencing older households to carry a mortgage into retirement:

  1. Financial planners advising on the benefits of a mortgage in retirement planning.
  2. Tax incentives and mortgage interest rates being “deductible from income taxes at the federal level and in most states.”
  3. Home equity is a primary source of wealth for those without pensions, with low incomes, and who are less affluent.

Highlight of the report: they don’t appear to be stressed over their mortgage.

Time to sell a home depends on more than just supply and demand in the area, it also depends on the home being correctly priced ­and competitively priced. In less terms, it’s all up to you. It might be a seller’s market in most areas but appealing to buyers still plays an important role. Getting greedy with price could turn away potential buyers and the longer a home is on the market, the more buyers grow wary. Don’t discount staging a home if you’re looking to sell fast.

Builders remain confident in September thanks to a stable and low unemployment rate, growing economy, rising incomes, and increasing household formations. Expectation: boosted demand for new single-family homes. Challenges: rising material costs, moderately higher interest rates (emphasis on moderate because they’re still quite low compared to history), and “burdensome regulations”.

The Best Places to Live in America for 2018 is in but the median household income averages $120K—these cities aren’t for the single folk and only areas with populations over 50K were taken into account. These lists are all about the details. Frisco, TX won the No. 1 spot.

best places to live 2018

Home Wealth.

CoreLogic’s Loan Performance Insights report for April 2018 was released today and if we remove last year’s natural disasters in Houston and throughout Florida and in Puerto Rico, the seriously delinquent loans and foreclosure rates are very strong. Thanks to a long period of strict underwriting practices and improved economic conditions, delinquency rates are near historic lows.

Forty-nine percent of Americans feel wealthy when they own a home, and 62 percent defined wealth as spending time with family. Where better to spend time with family than at home, in one of the largest investments one makes in their lifetime. Home sweet wealthy home.

An increase in home inventories could be on the horizon. Construction jobs saw an increase in employment by 13K in June, making the total figure building jobs created since the start of 2018 more than 280K.

The 2026 World Cup is coming to North America, with the U.S. hosting some of the games and providing the country with an opportunity for “tremendous economic boost” if U.S. cities keep their infrastructure costs in check and are smart. Homeowners could personally benefit by using apps like Airbnb and Uber to capitalize on the tourism the event will bring to town.

top 10 lake towns 2018

Traverse City, MI, the Pure Michigan lake town that’s arguably most recognized as one of the top summer destinations in the state scored the No. 4 spot on the Top 10 Lake Towns of 2018. The median home list price is $327K and a two-year home price appreciation of almost 18 percent. Branson, MO stole the top spot thanks to homes in a variety of price ranges available on the market, the beaches, a full marina, scuba diving, some of the best trout fishing in the country, and being recognized as “the live music show capital of the world.” Vacation home anyone?

Hot: Single Older Women, Hispanic Homeownership, & More.


Photo Source: Instagram via unknown.

When comparing many categories of demographics of homebuyers, single women over the age of 55 have been the fastest growing since 1981. Last year, the percentage of single older women nearly doubled from 20 years ago, making up 8.2 percent of all homebuyers. Also on the rise: Hispanic homeownership, up for the third consecutive year and rising to 46.2 percent in 2017.

Homes with central air conditioning sell for a 2.5 percent greater profit than homes without it. With the heat wave we’re facing in Michigan this week, we can’t say this is a surprise. It’s a common feature many homeowners prefer and was a requirement for 62 percent of homebuyers last year—we’re surprised that percent wasn’t higher.

Two Michigan cities made the top 20 hottest markets list again: Detroit and Grand Rapids. Midland, Texas topped the list, holding onto it’s No. 1 spot for the third month in a row, thanks to homebuyers’ ability to obtain a decent-size home for an attractive price in the area. California only holds five of the top 20 spots, no longer dominating the list, and signaling a shift in interest and money away from the overheated markets and into the less expensive secondary markets.

The Bureau of Labor Statistics reported 213K jobs created in June, beating expectations of 190K but last month’s number was revised lower by 22K and the unemployment rate increased to 4 percent. The Average Hourly Earnings also moved slightly higher. The ADP Employment Report released yesterday showed 177K jobs created in June.