19
JUN
2017

McLean Mortgage News Release: Local and National Awards

McLean Mortgage Garners Local and National Awards

McLean Mortgage Garners Local and National Awards

McLean Mortgage Corporation is proud to announce that the company and its sales force have received a multitude of awards thus far this year.  These awards are in recognition of achievement with regard to their volume of production, as well as personal accomplishments and employee satisfaction.

Company Awards

Individual Awards

  • The following McLean Mortgage loan officers were named as Top 400 Originators in the Nation by National Mortgage News: Sean Fritts, Robert Rudd III, Mike Stein, Melissa Bell, Larry Justice, Troy Toureau, Reginald Maddox, Andrea Wine, Vinnie Apostolico, Jeremy Johnson and Mark Bragaw
  • The following McLean Mortgage loan officers were named as Top 1% Originators in the Nation by Mortgage Executive Magazine.  All originators listed above plus:  Leslie Wish, Glen Bralley, Darren Chamblee, Stephen Walker, Paula White, Mike Orsini, John Masci, Todd Call, Remigio Ferrara and Jaqueline Sommer.

“I am proud of what our company has accomplished in less than one decade of existence. We have provided leadership for the industry and especially within the Mid-Atlantic Region,” said Pat Peavley, CEO of McLean Mortgage Corporation, “It is particularly gratifying to recognize that 20% of our loan officers were named nationally to the top 300 list, and over one-third were named as top 1% loan officers.” James Nader, COO of McLean, added:  “Being named as a Best Mortgage Employer in the DC area along with multi-national companies, and being ranked as the #2 independent DC home mortgage lender, are both outstanding achievements which are a testament to our entire staff.”

McLean Mortgage Corporation is a privately held full-service mortgage lender based in Fairfax, Virginia, with branch offices in Virginia, Maryland, North Carolina and the District of Columbia. McLean Mortgage is dedicated to delivering first-in-class customer service to each client. Our company is focused upon continuing their expansion footprint throughout the Mid-Atlantic Region and is interviewing branch managers and loan officers who share our ideals and goals.

Website www.WhyMcLeanMortgage.com

19
JUN
2017

The Deed is Done: The Weekly Market Update

The Fed Speaks

The Fed Speaks

The Federal Reserve Board’s Open Market Committee met last week to consider raising short-term interest rates. As we approached the meeting, the consensus was that the Fed would move their Discount and Federal Funds Rate higher by one-quarter of one percent. The weaker than expected jobs report put a bit of doubt in some analysts’ minds; however, most were still expecting the increase to be approved.

Thus, no increase would have been somewhat of a surprise and an increase of more than one-quarter of a percent would have been a major surprise. Therefore, the fact that the Fed moved by one-quarter of one percent was seen as somewhat of a non-event. Just as importantly, their statement released at the conclusion of the meeting provided us clues as to what the members thought of the state of the economy. The statement lauded the progress of the economy and downgraded their forecast for inflation. They continue to espouse a gradual rise in rates and, in the fourth quarter, the Fed expects to start selling off some of the assets they have amassed in the past to help the economy.

Anytime we are focused upon actions by the Federal Reserve Board, we have to remind our readers which interest rates the Fed controls directly. The Federal Funds Rate and the Discount Rate are rates the Fed charges member banks and member banks charge each other for overnight funds to balance their sheets. Thus, when we indicated that these are short-term rates, they are very short term. In reaction, other short-term rates such as three- and six-month T-Bills are affected most directly. On the other side of the coin, long-term rates, such as home loans, can move in tandem or have a different reaction, especially if the markets feel that the Fed is staying ahead of any threat of inflation. Thus, an increase in interest rates for home loans are not guaranteed to follow suit, though certainly the Fed’s action last week does pose that possibility.

The Weekly Market Update

Rates were up slightly last week, remaining near their lowest levels of the year. For the week ending June 15, Freddie Mac announced that 30-year fixed rates rose two ticks to 3.91% from 3.89% the week before. The average for 15-year loans also rose slightly to 3.18%, and the average for five-year adjustables moved up to 3.15%. A year ago, 30-year fixed rates averaged 3.54%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The rate on 30-year loans rose 2 basis points over the week to 3.91 percent. However, our survey was conducted before investors drove Treasury yields sharply lower in a reaction to the surprisingly weak CPI release. If that drop in yields sticks, rates on home loans are likely to follow in next week’s survey.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

15
JUN
2017

Change Could Help Many Homebuyers: Special Real Estate Report

Change Could Help Many Homebuyers

Homebuyers May Get Better Scores

What could be a boom for some homebuyers — their credit scores will get a surprise boost — might prove worrisome for lenders, landlords and others who depend on credit reports to evaluate their potential customers. In a little-known policy shift, starting July 1 the three national credit bureaus — Equifax, Experian and TransUnion — plan to stop collecting and reporting substantial amounts of civil judgment and tax lien information on public records affecting millions of American consumers.

Both types of information have negative impacts on credit scores and remain in credit files for extended periods. Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments are ordered by courts in legal disputes, typically involving monetary damages — debts owed by the losing party. With the elimination of this information from vast numbers of consumer credit files, some lenders are concerned that when they order credit reports to evaluate an applicant, they may no longer get the full picture of the risk of nonpayment posed by the consumer.

David H. Stevens, president and CEO of the Mortgage Bankers Association, said that if tax lien and civil judgment data is suppressed from credit reports, “it’s unclear whether creditors will be able to make informed decisions” about loan applicants. Stevens said that blocking this information will raise some applicants’ credit scores artificially, creating “false positives” that make individuals appear lower risk than they are. A study by credit scoring developer VantageScore Solutions, which was created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. Stevens said 8 percent and 10 points may sound small, but in the residential loan business they equate to significant numbers of applicants.

Source: Ken Harney, The Chicago Tribune

15
JUN
2017

Prospects May Get Better Scores: Special Real Estate Report

Change Could Help Many Homebuyers

What could be a boon for some homebuyers — their credit scores will get a surprise boost — might prove worrisome for lenders, landlords and others who depend on credit reports to evaluate their potential customers. In a little-known policy shift, starting July 1 the three national credit bureaus — Equifax, Experian and TransUnion — plan to stop collecting and reporting substantial amounts of civil judgment and tax lien information on public records affecting millions of American consumers.

Both types of information have negative impacts on credit scores and remain in credit files for extended periods. Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments are ordered by courts in legal disputes, typically involving monetary damages — debts owed by the losing party. With the elimination of this information from vast numbers of consumer credit files, some lenders are concerned that when they order credit reports to evaluate an applicant, they may no longer get the full picture of the risk of nonpayment posed by the consumer.

David H. Stevens, president and CEO of the Mortgage Bankers Association, said that if tax lien and civil judgment data is suppressed from credit reports, “it’s unclear whether creditors will be able to make informed decisions” about loan applicants. Stevens said that blocking this information will raise some applicants’ credit scores artificially, creating “false positives” that make individuals appear lower risk than they are. A study by credit scoring developer VantageScore Solutions, which was created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. Stevens said 8 percent and 10 points may sound small, but in the residential loan business they equate to significant numbers of applicants.

Source: Ken Harney, The Chicago Tribune

12
JUN
2017

Fed Meeting Amid Shortages: The Weekly Market Update

Fed Meeting Amid Shortages

Listing Shortages

We have previously brought up the listing shortages which seems to be constraining the real estate market while price growth continues. This shortage of listings presents a major opportunity for builders. Of course, builders are facing several shortages as well and these are constraining their ability to keep up with demand, especially within the first-time buyer market. These shortages include a lack of skilled labor and a lack of buildable lots in many areas. Thus, there are several shortages which are constraining the growth of the real estate market.

Could these shortages be related to the labor situation? We had another jobs report recently which showed a similar pattern. The number of jobs added was disappointing again. Yet, the unemployment rate moved to lows not seen since 2001. Could it be that we are running into a labor shortage? With the overall labor participation rate low, we expected that people would be coming back into the labor force as jobs were created, but perhaps their skills do not match the types of jobs that are open. Similarly, there are plenty of buildable lots in America, but not near many cities which are growing.

If the Federal Reserve Board meets this week feeling that we are facing a labor shortage and that wages are about to rise, they are likely to raise rates. If they feel that we just need to create more jobs, then they may not raise rates. While this one question may be an over-simplification of the situation and will not be the only one they face, it will be interesting to hear their statement after the meeting.

The Weekly Market Update

Rates continue to drift lower, setting another 2017 low this past week. For the week ending June 8, Freddie Mac announced that 30-year fixed rates fell to 3.89% from 3.94% the week before. The average for 15-year loans moved down to 3.16%, and the average for five-year adjustables remained at 3.11%. A year ago, 30-year fixed rates averaged 3.60%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield fell 3 basis points this week. The rate on 30-year fixed loans moved in tandem with Treasury yields, falling 5 basis points to 3.89 percent. Mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

12
JUN
2017

Fed Meeting Amid Shortages: The Weekly Market Update

Fed Meeting Amid Shortages

Listing Shortages

We have previously brought up the listing shortages which seems to be constraining the real estate market while price growth continues. This shortage of listings presents a major opportunity for builders. Of course, builders are facing several shortages as well and these are constraining their ability to keep up with demand, especially within the first-time buyer market. These shortages include a lack of skilled labor and a lack of buildable lots in many areas. Thus, there are several shortages which are constraining the growth of the real estate market.

Could these shortages be related to the labor situation? We had another jobs report recently which showed a similar pattern. The number of jobs added was disappointing again. Yet, the unemployment rate moved to lows not seen since 2001. Could it be that we are running into a labor shortage? With the overall labor participation rate low, we expected that people would be coming back into the labor force as jobs were created, but perhaps their skills do not match the types of jobs that are open. Similarly, there are plenty of buildable lots in America, but not near many cities which are growing.

If the Federal Reserve Board meets this week feeling that we are facing a labor shortage and that wages are about to rise, they are likely to raise rates. If they feel that we just need to create more jobs, then they may not raise rates. While this one question may be an over-simplification of the situation and will not be the only one they face, it will be interesting to hear their statement after the meeting.

The Weekly Market Update

Rates continue to drift lower, setting another 2017 low this past week. For the week ending June 8, Freddie Mac announced that 30-year fixed rates fell to 3.89% from 3.94% the week before. The average for 15-year loans moved down to 3.16%, and the average for five-year adjustables remained at 3.11%. A year ago, 30-year fixed rates averaged 3.60%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield fell 3 basis points this week. The rate on 30-year fixed loans moved in tandem with Treasury yields, falling 5 basis points to 3.89 percent. Mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

08
JUN
2017

The Kids Are Leaving: Special Real Estate Report

Departures Accelerating

The pace of young adults leaving their parents’ homes is accelerating significantly, Fannie Mae’s Economic and Strategic Research Group notes in a new analysis. Young adults in their mid- to late 20s or early 30s living with their parents fell between 2013 and 2015—a period known as the economic recovery—much more so than between 2010 and 2012, when the economy and housing market were still recovering from the Great Recession, researchers note. Young adults aged 24 to 25 in 2013 and 26 to 27 in 2015 residing with their parents dropped by 7.6 percentage points. On the other hand, those who passed through that same age range between 2010 and 2012 saw a decline of only 5.4 percentage points, researchers note.

“Stronger income growth and an accelerated rate of marriage are likely two primary reasons why millennials are starting to leave their parents’ homes at a faster pace,” researchers note. Millennials in their 20s or early 30s saw their income, adjusted for inflation, grow by at least 23 percent between 2013 and 2015 when compared to 2010 and 2012. Also, millennials in their late 20s and early 30s between 2013 and 2015 were getting married at a markedly faster rate than their predecessors did in that same age range during the recession and the recovery thereafter, Fannie Mae’s report notes. “Millennials’ accelerated rate of departure from their parents’ homes bodes well for housing demand,” Fannie Mae’s Economic and Strategic Research Group notes in the report. “Cohort analysis shows that the increased pace of leaving home has been accompanied by accelerated young-adult household formation.”

Source: Fannie Mae Housing Insights

08
JUN
2017

The Kids Are Leaving: Special Real Estate Report

Homeownership Rate Ready to Rise

Departures Accelerating

The pace of young adults leaving their parents’ homes is accelerating significantly, Fannie Mae’s Economic and Strategic Research Group notes in a new analysis. Young adults in their mid- to late 20s or early 30s living with their parents fell between 2013 and 2015—a period known as the economic recovery—much more so than between 2010 and 2012, when the economy and housing market were still recovering from the Great Recession, researchers note. Young adults aged 24 to 25 in 2013 and 26 to 27 in 2015 residing with their parents dropped by 7.6 percentage points. On the other hand, those who passed through that same age range between 2010 and 2012 saw a decline of only 5.4 percentage points, researchers note.

“Stronger income growth and an accelerated rate of marriage are likely two primary reasons why millennials are starting to leave their parents’ homes at a faster pace,” researchers note. Millennials in their 20s or early 30s saw their income, adjusted for inflation, grow by at least 23 percent between 2013 and 2015 when compared to 2010 and 2012. Also, millennials in their late 20s and early 30s between 2013 and 2015 were getting married at a markedly faster rate than their predecessors did in that same age range during the recession and the recovery thereafter, Fannie Mae’s report notes. “Millennials’ accelerated rate of departure from their parents’ homes bodes well for housing demand,” Fannie Mae’s Economic and Strategic Research Group notes in the report. “Cohort analysis shows that the increased pace of leaving home has been accompanied by accelerated young-adult household formation.”

Source: Fannie Mae Housing Insights

05
JUN
2017

Jobs and The Fed: The Weekly Market Update

Jobs and The Fed

Cat and Mouse Game

For many years during and after the recession, the monthly jobs report was important to gauge the strength of the recovery. However, during the past two years, the release of the report has taken on a new meaning. Now we are not only measuring the strength of the economy, but also tying that information directly to actions by the Federal Reserve Board’s Open Market Committee. If we added 250,000 jobs in a particular month five years ago, that was good news. But we did not have to worry about the Fed raising interest rates as a result of that information. Today, a strong report can lead us to direct action by the Fed.

And so it is with the report which came out on Friday. The increase of jobs of 138,000 and the revision of last month’s data was seen as weakness. However, the unemployment rate moved to 4.1%, another post-recession low, and monthly wage growth came in at forecast. The question at this point is — are we approaching full employment, which means we are also experiencing a shortage of labor? This information, taken together with the previous month’s report, tells us that there is still a decent chance that the Fed will act when they meet next week, but slightly less of a chance than before the report was released.

The meeting will also be accompanied by the release of economic projections which will give us a gauge of where the Fed thinks that the economy is heading in the next several months. Keep in mind that the Fed will be considering other information which measure the strength of the economy. For example, on Tuesday last week, measures of personal income and spending for April came in with moderate strength following weak readings in March. Until the Fed meets next week, we can’t say exactly how they will react, but certainly the data we saw last week give us some important clues.

The Weekly Market Update

Rates were stable last week, remaining at their lowest level of the year. For the week ending June 1, Freddie Mac announced that 30-year fixed rates fell one tick to 3.94% from 3.95% the week before. The average for 15-year loans remained at 3.19%, and the average for five-year adjustables moved up to 3.11%. A year ago, 30-year fixed rates averaged 3.66%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “In a short week following Memorial Day, the 10-year Treasury yield fell 4 basis points. The rate on 30-year fixed loans remained relatively flat, falling 1 basis point to 3.94 percent and once again hitting a new 2017 low.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

05
JUN
2017

Jobs and The Fed: The Weekly Market Update

Jobs and The Fed

Cat and Mouse Game

For many years during and after the recession, the monthly jobs report was important to gauge the strength of the recovery. However, during the past two years, the release of the report has taken on a new meaning. Now we are not only measuring the strength of the economy, but also tying that information directly to actions by the Federal Reserve Board’s Open Market Committee. If we added 250,000 jobs in a particular month five years ago, that was good news. But we did not have to worry about the Fed raising interest rates as a result of that information. Today, a strong report can lead us to direct action by the Fed.

And so it is with the report which came out on Friday. The increase of jobs of 138,000 and the revision of last month’s data was seen as weakness. However, the unemployment rate moved to 4.1%, another post-recession low, and monthly wage growth came in at forecast. The question at this point is — are we approaching full employment, which means we are also experiencing a shortage of labor? This information, taken together with the previous month’s report, tells us that there is still a decent chance that the Fed will act when they meet next week, but slightly less of a chance than before the report was released.

The meeting will also be accompanied by the release of economic projections which will give us a gauge of where the Fed thinks that the economy is heading in the next several months. Keep in mind that the Fed will be considering other information which measure the strength of the economy. For example, on Tuesday last week, measures of personal income and spending for April came in with moderate strength following weak readings in March. Until the Fed meets next week, we can’t say exactly how they will react, but certainly the data we saw last week give us some important clues.

The Weekly Market Update

Rates were stable last week, remaining at their lowest level of the year. For the week ending June 1, Freddie Mac announced that 30-year fixed rates fell one tick to 3.94% from 3.95% the week before. The average for 15-year loans remained at 3.19%, and the average for five-year adjustables moved up to 3.11%. A year ago, 30-year fixed rates averaged 3.66%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “In a short week following Memorial Day, the 10-year Treasury yield fell 4 basis points. The rate on 30-year fixed loans remained relatively flat, falling 1 basis point to 3.94 percent and once again hitting a new 2017 low.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

01
JUN
2017

Homeownership Rate Ready to Rise: Special Real Estate Report

Homeownership Rate Ready to Rise

Households Turn To Owning

The U.S. homeownership rate is finally poised to rise significantly as household formations by owners grew faster in the first quarter than those by renters — the first time that’s happened in more than a decade. While the share of Americans who owned their homes was up only slightly from a year earlier, at 63.6 percent, the number of new owners jumped by more than 850,000, compared with an increase in renter households of 365,000. The 1.1 percent year-over-year gain in owners was also the biggest since 2006, according to an analysis by Trulia of Census Bureau data released.

The homeownership rate, which sunk last year to the lowest level in data going back to 1965, had been losing ground because young people leaving home tended to rent rather than buy. That diluted the number of owner-occupant households. Now, with consumer confidence on the upswing and wages increasing, first-time buyers are being drawn into the market after years of saving for down payments.

“It’s a significant reversal of what we’ve seen,” Ralph McLaughlin, chief economist for Trulia, said in a phone interview. “These are signs that we may have hit bottom.” The homeownership rate reached a peak of 69.2 percent in June 2004. A few years later, the housing crash caused credit to tighten and resulted in millions of Americans losing their properties to foreclosure.

Source: Bloomberg

01
JUN
2017

Homeownership Rate Ready to Rise: Special Real Estate Report

Homeownership Rate Ready to Rise

Households Turn To Owning

The U.S. homeownership rate is finally poised to rise significantly as household formations by owners grew faster in the first quarter than those by renters — the first time that’s happened in more than a decade. While the share of Americans who owned their homes was up only slightly from a year earlier, at 63.6 percent, the number of new owners jumped by more than 850,000, compared with an increase in renter households of 365,000. The 1.1 percent year-over-year gain in owners was also the biggest since 2006, according to an analysis by Trulia of Census Bureau data released.

The homeownership rate, which sunk last year to the lowest level in data going back to 1965, had been losing ground because young people leaving home tended to rent rather than buy. That diluted the number of owner-occupant households. Now, with consumer confidence on the upswing and wages increasing, first-time buyers are being drawn into the market after years of saving for down payments.

“It’s a significant reversal of what we’ve seen,” Ralph McLaughlin, chief economist for Trulia, said in a phone interview. “These are signs that we may have hit bottom.” The homeownership rate reached a peak of 69.2 percent in June 2004. A few years later, the housing crash caused credit to tighten and resulted in millions of Americans losing their properties to foreclosure.

Source: Bloomberg

30
MAY
2017

Summer is Here: The Weekly Market Update

Summer is Here

Memorial Day Thoughts

It is hard to believe that we have already celebrated Memorial Day in 2017. Doesn’t it seem that this year is going particularly fast? On Memorial Day, we remembered those who died in service to our country, a tradition that goes back as far as the Civil War and was originally known as Decoration Day. While there are ceremonies and parades going on across our country, the average American is also participating in Memorial Day picnics because good weather has finally arrived throughout the country.

Yes, the timing of Memorial Day is also the unofficial start of the summer. The kids are heading into their last weeks of school, vacations are starting and many people are moving because of the homes they have purchased during the spring homebuying season. This means that Americans are also meeting their new neighbors and becoming part of different communities — a very joyous occasion.

While we all enjoy the picnics and new homes, we should not forget the meaning of Memorial Day and its roots which came from a time when our Nation was literally torn apart. We mention this because today again our country is divided, and while differences of opinions are part of what makes our Democracy great, we hope that our divides heal over time because the more energy we expend focused upon conflicts, the less we can focus upon progress. Speaking of progress, we may take off for Memorial Day weekend, but the economy does not. We have another reading on our employment situation coming up this week — always an interesting time for the markets.

The Weekly Market Update

Rates were down last week to their lowest level of the year. For the week ending May 25, Freddie Mac announced that 30-year fixed rates fell to 3.95% from 4.02% the week before. The average for 15-year loans decreased to 3.19%, and the average for five-year adjustables moved down to 3.07%. A year ago, 30-year fixed rates averaged 3.64%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “As we predicted, the rate on 30-year fixed loans fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields. The survey rate stands at 3.95 percent today, a new low for the year.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

30
MAY
2017

Summer is Here: The Weekly Market Update

Summer is Here

Memorial Day Thoughts

It is hard to believe that we have already celebrated Memorial Day in 2017. Doesn’t it seem that this year is going particularly fast? On Memorial Day, we remembered those who died in service to our country, a tradition that goes back as far as the Civil War and was originally known as Decoration Day. While there are ceremonies and parades going on across our country, the average American is also participating in Memorial Day picnics because good weather has finally arrived throughout the country.

Yes, the timing of Memorial Day is also the unofficial start of the summer. The kids are heading into their last weeks of school, vacations are starting and many people are moving because of the homes they have purchased during the spring homebuying season. This means that Americans are also meeting their new neighbors and becoming part of different communities — a very joyous occasion.

While we all enjoy the picnics and new homes, we should not forget the meaning of Memorial Day and its roots which came from a time when our Nation was literally torn apart. We mention this because today again our country is divided, and while differences of opinions are part of what makes our Democracy great, we hope that our divides heal over time because the more energy we expend focused upon conflicts, the less we can focus upon progress. Speaking of progress, we may take off for Memorial Day weekend, but the economy does not. We have another reading on our employment situation coming up this week — always an interesting time for the markets.

The Weekly Market Update

Rates were down last week to their lowest level of the year. For the week ending May 25, Freddie Mac announced that 30-year fixed rates fell to 3.95% from 4.02% the week before. The average for 15-year loans decreased to 3.19%, and the average for five-year adjustables moved down to 3.07%. A year ago, 30-year fixed rates averaged 3.64%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “As we predicted, the rate on 30-year fixed loans fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields. The survey rate stands at 3.95 percent today, a new low for the year.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

25
MAY
2017

Homeowners Insurance Myths: Special Real Estate Report

Homeowners Insurance Myths

Protect Your Home

Fifty-six percent of consumers recently surveyed believe that a standard homeowner’s policy covers flood damage. But they’re mistaken, and their assumption could be a costly mistake. The survey by insuranceQuotes of about 1,000 consumers shows a lot of misunderstandings when it comes to home insurance and what’s covered and what’s not.

“Being misinformed about your home policy can be an extremely expensive mistake—especially when a few inches of water in a 1,000 square-foot home can easily cost over $10,000 in repairs,” says Laura Adams, senior insurance analyst at insuranceQuotes. “There are a number of widespread myths ranging from coverage for dog bites to items stolen from your car that frequently trip up policyholders.” Consumers tend to overestimate the amount of coverage they have when it comes to flooding protection, according to the study.

Further, 81 percent of survey respondents knew that valuables stolen from their home were covered under most standard homeowner’s policies, yet only 28 percent knew that renter’s insurance would cover valuables stolen from their cars. “It’s critical for consumers to thoroughly explore their options and really understand the protections that are included or excluded with a standard renter’s or home insurance policy,” says Adams. “Don’t wait until right before a big storm is headed your way to get coverage because there may be a waiting period.”

Source: REALTOR® Magazine

25
MAY
2017

Homeowners Insurance Myths: Special Real Estate Report

Homeowners Insurance Myths

Protect Your Home

Fifty-six percent of consumers recently surveyed believe that a standard homeowner’s policy covers flood damage. But they’re mistaken, and their assumption could be a costly mistake. The survey by insuranceQuotes of about 1,000 consumers shows a lot of misunderstandings when it comes to home insurance and what’s covered and what’s not.

“Being misinformed about your home policy can be an extremely expensive mistake—especially when a few inches of water in a 1,000 square-foot home can easily cost over $10,000 in repairs,” says Laura Adams, senior insurance analyst at insuranceQuotes. “There are a number of widespread myths ranging from coverage for dog bites to items stolen from your car that frequently trip up policyholders.” Consumers tend to overestimate the amount of coverage they have when it comes to flooding protection, according to the study.

Further, 81 percent of survey respondents knew that valuables stolen from their home were covered under most standard homeowner’s policies, yet only 28 percent knew that renter’s insurance would cover valuables stolen from their cars. “It’s critical for consumers to thoroughly explore their options and really understand the protections that are included or excluded with a standard renter’s or home insurance policy,” says Adams. “Don’t wait until right before a big storm is headed your way to get coverage because there may be a waiting period.”

Source: REALTOR® Magazine

24
MAY
2017

Define and Grow Your Sphere – Part One

Define and Grow Your Sphere-Part One

Define and Grow Your Sphere – Part One

The term “sphere” might be the most overused term in sales and marketing literature. For some, the sphere is represented by one’s immediate friends and for others it is someone’s previous customers. In reality, your sphere includes these elements and much more. It is when we define the sphere in the right way that we actually find out how important our sphere actually is with regard to our marketing plan. In the long-run, our sphere should be the basis or foundation of this plan.

First, what is one’s sphere? A sphere is comprised of those you who know and you know them as well. Put it this way–if you were walking down the street and passed someone–would you say hello? If you would, they are part of your sphere. In addition to this relationship component, there is also a component of commonality. There are those you don’t know, but with whom you have something in common.

For example, let’s say you go to church or temple. There may be 500 families and 1000 members of the group. You probably know 50 of these people because you live near them, sit near them or even have served on committees with them. But there are 950 people that you don’t know whom are part of the sphere. The “commonality” component adds the largest numbers to your sphere while the relationship component adds the most important individuals to your sphere.

Now that we have defined the sphere, let us look at the specific components of a sphere. In all, there are seven all-important segments of one’s personal sphere–

Friends, family and neighbors. This part of your sphere is comprised of those with whom you have the closest relationship. Covey would say that you have built up an “emotional” bank account. This can be the most important segment of the sphere because the members have a vested interest in helping you succeed. And many times it is under-utilized because call reluctance keeps some from calling on the personal segment of the sphere.

Previous customers. This segment of the sphere is well defined in practice and literature. Sometimes this segment is interchangeable with the term sphere. There are many “customer relationship management” (CRM) programs available to help sales and business people keep track of and deliver value to this segment. One important point–if you are new in your present industry, be sure to include the previous customers from your previous industry. These are people you have served and with whom you have developed a relationship. Starting with these customers puts you on “second base” instead of home plate.

Present and previous co-workers. This segment would include everyone you have worked with in this industry and previous industries. Many have worked with hundreds of different people. You may have helped someone start a career. Perhaps you have promoted someone. These relationships can be turned into dollars because you have good will built up. If you work in an industry where turnover is rampant among sales personnel (for example, as a real estate agent or loan officer), every time someone leaves the industry the sphere they have built up disappears unless you take the initiative to work with them and turn them into a referral source. In reality the group of “previous practitioners” makes a great referral source because they are familiar with screening prospects and they are known as having expertise in the industry. In other words, don’t let your previous peers from this profession or your previous profession go untapped.

Previous prospects. Previous prospects are important for two reasons. First, if they choose not to do business with you, they might change their mind sometime in the future. Perhaps they decided not to purchase at all. Keeping in touch with this segment is essential.

On the other hand, there are prospects that you were not able to help because of one reason or another. Perhaps they had bad credit or no savings. You should be referring these people to those who can help them (perhaps credit counselors) so they are more likely to become clients in the future. Those who receive your referrals that are comprised of those you can’t help are helping you with your future business and can become important referral source on their own. It is said that “someone’s garbage is someone else’s treasure.”

As you are reading this article, your eyes should be opening wider as you see your sphere expanding in scope. And, we are only half-way through our definition. Stay tuned for the next segment.

24
MAY
2017

Define and Grow Your Sphere – Part One

Define and Grow Your Sphere-Part One

Define and Grow Your Sphere – Part One

The term “sphere” might be the most overused term in sales and marketing literature. For some, the sphere is represented by one’s immediate friends and for others it is someone’s previous customers. In reality, your sphere includes these elements and much more. It is when we define the sphere in the right way that we actually find out how important our sphere actually is with regard to our marketing plan. In the long-run, our sphere should be the basis or foundation of this plan.

First, what is one’s sphere? A sphere is comprised of those you who know and you know them as well. Put it this way–if you were walking down the street and passed someone–would you say hello? If you would, they are part of your sphere. In addition to this relationship component, there is also a component of commonality. There are those you don’t know, but with whom you have something in common.

For example, let’s say you go to church or temple. There may be 500 families and 1000 members of the group. You probably know 50 of these people because you live near them, sit near them or even have served on committees with them. But there are 950 people that you don’t know whom are part of the sphere. The “commonality” component adds the largest numbers to your sphere while the relationship component adds the most important individuals to your sphere.

Now that we have defined the sphere, let us look at the specific components of a sphere. In all, there are seven all-important segments of one’s personal sphere–

Friends, family and neighbors. This part of your sphere is comprised of those with whom you have the closest relationship. Covey would say that you have built up an “emotional” bank account. This can be the most important segment of the sphere because the members have a vested interest in helping you succeed. And many times it is under-utilized because call reluctance keeps some from calling on the personal segment of the sphere.

Previous customers. This segment of the sphere is well defined in practice and literature. Sometimes this segment is interchangeable with the term sphere. There are many “customer relationship management” (CRM) programs available to help sales and business people keep track of and deliver value to this segment. One important point–if you are new in your present industry, be sure to include the previous customers from your previous industry. These are people you have served and with whom you have developed a relationship. Starting with these customers puts you on “second base” instead of home plate.

Present and previous co-workers. This segment would include everyone you have worked with in this industry and previous industries. Many have worked with hundreds of different people. You may have helped someone start a career. Perhaps you have promoted someone. These relationships can be turned into dollars because you have good will built up. If you work in an industry where turnover is rampant among sales personnel (for example, as a real estate agent or loan officer), every time someone leaves the industry the sphere they have built up disappears unless you take the initiative to work with them and turn them into a referral source. In reality the group of “previous practitioners” makes a great referral source because they are familiar with screening prospects and they are known as having expertise in the industry. In other words, don’t let your previous peers from this profession or your previous profession go untapped.

Previous prospects. Previous prospects are important for two reasons. First, if they choose not to do business with you, they might change their mind sometime in the future. Perhaps they decided not to purchase at all. Keeping in touch with this segment is essential.

On the other hand, there are prospects that you were not able to help because of one reason or another. Perhaps they had bad credit or no savings. You should be referring these people to those who can help them (perhaps credit counselors) so they are more likely to become clients in the future. Those who receive your referrals that are comprised of those you can’t help are helping you with your future business and can become important referral source on their own. It is said that “someone’s garbage is someone else’s treasure.”

As you are reading this article, your eyes should be opening wider as you see your sphere expanding in scope. And, we are only half-way through our definition. Stay tuned for the next segment.

22
MAY
2017

The Pendulum Moves: The Weekly Market Update

The Pendulum Moves

The Credit Cycle

Our economic growth is very cyclical. And the last few cycles we have experienced have been some of the most severe we have seen in history. In the early 2000’s we had a very strong economic boom fueled by an explosion in real estate values. From late 2007 to the middle of 2009, we were subjected to a very severe recession, led by the collapse of the financial and real estate markets. Our latest cycle has been much less severe, as we have witnessed a very gradual recovery. But the length of the recovery has been extraordinary and is now approaching the longest recoveries in history, which have ranged from 80 to 120 months.

There are other types of cycles that typically occur concurrently with these economic cycles. For example, during the real estate boom, just about anyone could qualify to purchase a home. During the recession, credit standards tightened tremendously, and at that time only those with pristine credit could qualify for a home loan. Now, during the recovery, we have seen a gradual swing of the credit pendulum on the other side. No, we are not approaching the days in which anyone who breathed could get a loan.

However, if you look at many aspects of qualification, we have come a long way over time, just as the economy has. For example, FICO score minimums have come down. There are also more programs which require lower down payments. Though verification of income is almost universally required, there is more flexibility with regard to income qualification. As rates have moved up, lenders have become more adventurous regarding qualifying more prospects. Again, we don’t believe we are moving back to the cowboy days of the real estate boom. But we do believe that many who don’t believe they could qualify to purchase a home, now might very well be able to do so.

The Weekly Market Update

Rates were down slightly last week, but the survey data did not include a drop in rates on Wednesday of last week. For the week ending May 18, Freddie Mac announced that 30-year fixed rates fell to 4.02% from 4.05% the week before. The average for 15-year loans decreased slightly to 3.27%, and the average for five-year adjustables moved down one tick to 3.13%. A year ago, 30-year fixed rates averaged 3.58%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The rate on 30-year fixed loans fell 3 basis points this week to 4.02 percent. However, this week’s survey closed prior to Wednesday’s flight to quality. The delayed impact of the associated decline in Treasury yields may push rates lower in next week’s survey.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

22
MAY
2017

The Pendulum Moves: The Weekly Market Update

The Pendulum Moves

The Credit Cycle

Our economic growth is very cyclical. And the last few cycles we have experienced have been some of the most severe we have seen in history. In the early 2000’s we had a very strong economic boom fueled by an explosion in real estate values. From late 2007 to the middle of 2009, we were subjected to a very severe recession, led by the collapse of the financial and real estate markets. Our latest cycle has been much less severe, as we have witnessed a very gradual recovery. But the length of the recovery has been extraordinary and is now approaching the longest recoveries in history, which have ranged from 80 to 120 months.

There are other types of cycles that typically occur concurrently with these economic cycles. For example, during the real estate boom, just about anyone could qualify to purchase a home. During the recession, credit standards tightened tremendously, and at that time only those with pristine credit could qualify for a home loan. Now, during the recovery, we have seen a gradual swing of the credit pendulum on the other side. No, we are not approaching the days in which anyone who breathed could get a loan.

However, if you look at many aspects of qualification, we have come a long way over time, just as the economy has. For example, FICO score minimums have come down. There are also more programs which require lower down payments. Though verification of income is almost universally required, there is more flexibility with regard to income qualification. As rates have moved up, lenders have become more adventurous regarding qualifying more prospects. Again, we don’t believe we are moving back to the cowboy days of the real estate boom. But we do believe that many who don’t believe they could qualify to purchase a home, now might very well be able to do so.

The Weekly Market Update

Rates were down slightly last week, but the survey data did not include a drop in rates on Wednesday of last week. For the week ending May 18, Freddie Mac announced that 30-year fixed rates fell to 4.02% from 4.05% the week before. The average for 15-year loans decreased slightly to 3.27%, and the average for five-year adjustables moved down one tick to 3.13%. A year ago, 30-year fixed rates averaged 3.58%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The rate on 30-year fixed loans fell 3 basis points this week to 4.02 percent. However, this week’s survey closed prior to Wednesday’s flight to quality. The delayed impact of the associated decline in Treasury yields may push rates lower in next week’s survey.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

18
MAY
2017

First Time Buyers Arise: Special Real Estate Report

First Time Buyers Arise

Less Cash Needed

New buyers are gradually increasing their stake in the housing market. First-timers comprised 32 percent of existing-home sales in March, up from 30 percent a year ago and 29 percent in 2014. The looming threat of interest rate increases may be prompting more buyers to enter the market this year. But also, sustained job and income growth is playing a role, according to last month’s Realtors® Confidence Index.

The aging of the millennial generation may also be modestly increasing buying behavior; the report notes that first-time buyers are most likely to be between the ages of 25 and 34. “Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range,” says William E. Brown, president of the National Association of Realtors®. The good news is those who do find a home in their price range aren’t having to bring their life savings to the closing table. Sixty-three percent of first-time buyers put down anywhere from zero to 6 percent to secure a mortgage.

That said, the report notes that the impact of these measures in attracting first-timers is modest due to a general lack of knowledge about the opportunities available. Only 13 percent of those aged 34 years or younger believe they can purchase a home with a down payment of 5 percent or less, according to NAR’s 2016 Third Quarter Housing Opportunities and Market Experience (HOME) Survey.

Source: NAR 

18
MAY
2017

First Time Buyers Arise: Special Real Estate Report

First Time Buyers Arise

Less Cash Needed

New buyers are gradually increasing their stake in the housing market. First-timers comprised 32 percent of existing-home sales in March, up from 30 percent a year ago and 29 percent in 2014. The looming threat of interest rate increases may be prompting more buyers to enter the market this year. But also, sustained job and income growth is playing a role, according to last month’s Realtors® Confidence Index.

The aging of the millennial generation may also be modestly increasing buying behavior; the report notes that first-time buyers are most likely to be between the ages of 25 and 34. “Realtors® in most markets are saying interest from first-timers is up this year, but competition is stiff for listings in their price range,” says William E. Brown, president of the National Association of Realtors®. The good news is those who do find a home in their price range aren’t having to bring their life savings to the closing table. Sixty-three percent of first-time buyers put down anywhere from zero to 6 percent to secure a mortgage.

That said, the report notes that the impact of these measures in attracting first-timers is modest due to a general lack of knowledge about the opportunities available. Only 13 percent of those aged 34 years or younger believe they can purchase a home with a down payment of 5 percent or less, according to NAR’s 2016 Third Quarter Housing Opportunities and Market Experience (HOME) Survey.

Source: NAR 

15
MAY
2017

The Listing Shortage: The Weekly Market Update

The Listing Shortage

Millennials Are Buying

We have had a decent recovery for the real estate market over the past decade. The recovery has been slow, but steady. While slow and steady may be frustrating for some, it is actually a good thing when you compare it to the real estate boom of 2001 to 2005, which created a housing “bubble” because of rapidly escalating housing prices. A steady increase is more sustainable in the long run.

However, there is no doubt that the market recovery is being held back by a listing shortage, especially in the lower price ranges. The Millennials are coming of age and are ready to buy. However, the Baby Boomers are working longer than ever and are not quite ready to give up their homes. If a Baby Boomer has not paid off their home as of yet, they are likely to have exceptionally low interest rates through refinancing and thus living in their home is typically cheaper than renting. The question is–how will this “stalemate” be broken?

The answer is — gradually. Builders continue to slowly increase their production and this new inventory is sorely needed in most areas of the country. Again, a slow increase is more orderly than a building boom, even though we are not building enough to satisfy present demand. And the Baby Boomers will gradually retire and have to leave their properties as they age. Some of these homes will be handed down to heirs and others will hit the markets. In the long run, the listing shortage will be resolved. In the short run, purchasing a home in the lower-to-moderate price ranges is a very competitive game for those entering the market for the first time.

The Weekly Market Update

Rates were up slightly last week, as the markets reacted mildly to the jobs data. For the week ending May 11, Freddie Mac announced that 30-year fixed rates rose to 4.05% from 4.02% the week before. The average for 15-year loans increased slightly to 3.29%, and the average for five-year adjustables moved up one tick to 3.14%. A year ago, 30-year fixed rates averaged 3.57%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield jumped 8 basis points this week, while the rate on 30-year fixed loans rose 3 basis points to 4.05%. Mixed economic reports over the last few weeks have anchored the 30-year rate around the four percent mark.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

15
MAY
2017

The Listing Shortage: The Weekly Market Update

The Listing Shortage

Millennials Are Buying

We have had a decent recovery for the real estate market over the past decade. The recovery has been slow, but steady. While slow and steady may be frustrating for some, it is actually a good thing when you compare it to the real estate boom of 2001 to 2005, which created a housing “bubble” because of rapidly escalating housing prices. A steady increase is more sustainable in the long run.

However, there is no doubt that the market recovery is being held back by a listing shortage, especially in the lower price ranges. The Millennials are coming of age and are ready to buy. However, the Baby Boomers are working longer than ever and are not quite ready to give up their homes. If a Baby Boomer has not paid off their home as of yet, they are likely to have exceptionally low interest rates through refinancing and thus living in their home is typically cheaper than renting. The question is–how will this “stalemate” be broken?

The answer is — gradually. Builders continue to slowly increase their production and this new inventory is sorely needed in most areas of the country. Again, a slow increase is more orderly than a building boom, even though we are not building enough to satisfy present demand. And the Baby Boomers will gradually retire and have to leave their properties as they age. Some of these homes will be handed down to heirs and others will hit the markets. In the long run, the listing shortage will be resolved. In the short run, purchasing a home in the lower-to-moderate price ranges is a very competitive game for those entering the market for the first time.

The Weekly Market Update

Rates were up slightly last week, as the markets reacted mildly to the jobs data. For the week ending May 11, Freddie Mac announced that 30-year fixed rates rose to 4.05% from 4.02% the week before. The average for 15-year loans increased slightly to 3.29%, and the average for five-year adjustables moved up one tick to 3.14%. A year ago, 30-year fixed rates averaged 3.57%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield jumped 8 basis points this week, while the rate on 30-year fixed loans rose 3 basis points to 4.05%. Mixed economic reports over the last few weeks have anchored the 30-year rate around the four percent mark.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

11
MAY
2017

Get in Position This Spring: Special Real Estate Report

4 Steps For First Time Buyers

The spring home-buying market is shaping up to be one of the most competitive in recent memory, and is even tougher for first-time homebuyers, i.e. Millennials. The market as a whole continues to struggle with low housing inventory, but a recent report from Trulia shows the dwindling inventory is especially acute for starter homes or even trade ups, while the number of premium homes actually increased. A major reason many Millennials are delaying homeownership is because about 38% have subprime credit, according to TransUnion’s consumer credit database. In that case, there are several steps Millennials can take toward improving their credit scores. TransUnion Vice President Heather Battison passed along these tips that Millennials should consider when preparing to buy a home:

  • Check your credit early: TransUnion recommends all homebuyers check their credit report three to six months before shopping for a home to allow time to build credit if needed.
  • Talk to your landlord: Renting Millennials should ask their landlord to report existing rent payments to TransUnion and the other bureaus to demonstrate positive payment history.
  • Get pre-approved: Knowing the loan size a financial institution is willing to approve can prevent people from falling in love with homes they can’t afford.
  • Have a contingency budget: There are a lot of financial unknowns when buying a home so it’s important for homebuyers to have money set aside for any surprises upon move-in.

Source: TransUnion

08
MAY
2017

Economic Overload: The Weekly Market Update

Big Data Week

Big Data Week

The first week of the month is always busy with data announcements because the employment data is released on the first Friday of the month. But this month we started out firing on all cylinders because we had a meeting of the Federal Reserve’s Open Market Committee the same week, plus April was a short month and some end of the month data was pushed into May. This included personal income and spending, which are key economic indicators.

So how did we make out with all of this data and activity? Personal income and spending came in lower than forecast. The fact that personal spending did not rise at all was certainly of concern because stagnant consumer spending was a major factor contributing to the disappointing preliminary estimate for economic growth in the first quarter, which was released the previous Friday. Spending will likely need to increase for economic growth to pick up.

The announcement from the Fed came on Wednesday and, as expected, there was no action on interest rates. The announcement indicated that the Fed was comfortable with previous statements regarding future activity, despite the slow rate of growth in the first quarter. The Fed did not have the ability to see the employment numbers for April when they met and the release showed that jobs increased by 211,000, slightly more than forecast, though the job creation was partially offset by a downward revision of the previous month’s numbers. The unemployment rate fell to 4.4%, which puts us very close to what economists consider full employment, but does not consider those who are working part time or out of the workforce, which gives us some room to grow before inflation sets in. Wages grew by 0.3%, which was right on forecast. These numbers would support the Fed raising rates in June; however, there will be another jobs report released before they meet again.

The Weekly Market Update

Rates on 30-year fixed loans were steady last week as the markets waited on the jobs data. For the week ending May 4, Freddie Mac announced that 30-year fixed rates fell one tick to 4.02% from 4.03% the week before. The average for 15-year loans remained at 3.27%, and the average for five-year adjustables moved up one tick to 3.13%. A year ago, 30-year fixed rates averaged 3.61%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield remained relatively flat this week, as did the 30-year fixed rate which fell 1 basis point to 4.02 percent. Markets have been erring on the side of caution following a weak advance estimate for first-quarter GDP and the FOMC’s broadly expected decision to leave rates unchanged.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

04
MAY
2017

Fannie’s Student Loan Relief: Special Real Estate Report

Helping More Buyers

Helping More Buyers

Fannie Mae has moved to help the 44 million Americans that have student loan debt and want to own homes or use their homes to lower their student loan burden. It’s no surprise this debt inhibits many borrowers from becoming homeowners, even though homeownership can be an important step toward building wealth. The new policies are designed to help borrowers qualify for a home loan and reduce student debt. The policies are effective immediately and will empower lenders to:

  • Offer borrowers an option to pay off debt and get a better interest rate.
    Lenders can offer homeowners who have at least 20 percent equity in their homes a cash-out refinance to pay off one or more student loans. Borrowers will have an opportunity to convert higher interest rate student debt to a lower interest rate and potentially reduce their monthly debt payments. When at least one student loan is paid off directly to the student loan company, the lender can offer a lower interest rate through Fannie Mae.
  • Exclude debt paid by others, potentially making it easier for a homebuyer to qualify.
    Lenders can exclude a borrower’s non-mortgage debts that have been paid by others for the past 12 months from the ratio calculation, with proper documentation. Examples of debts that qualify would include credit cards, auto loans and student loans.
  • More flexibility on calculating student debt payments.
    Lenders can accept the monthly student debt payment amount listed on the credit report as opposed to using a percentage of the outstanding balance for the payment which must be used in qualification calculations.

Though the new guidelines are “effective immediately” upon the issuance of Fannie Mae’s Lender Letter on April 25, there may a short lag time for pricing changes as the markets adjust.

Source: Fannie Mae — For more information on these changes, feel free to contact us.

30
APR
2017

Which Report Was Right? The Weekly Market Update

Big Week Kicks Off May

Big Week Kicks Off May

This week we will get evidence of which jobs report was an accurate depiction of the current employment picture. The January and February jobs report showed major increases of over 200,000 jobs. The March jobs report showed a relatively modest increase of just under 100,000 jobs. The average for the past 12 months has been about 180,000 jobs per month and, therefore, the quarterly numbers were right on target in this regard.

The question is, will we return to the strong numbers of January and February, stay with the lower figure for March, or move back to the norm? If you are confused as to where the true numbers lie, imagine what the Federal Reserve Board must be thinking when they meet this week. They don’t get the benefit of April’s numbers because they meet before the employment report is released. And yet they must decide whether to raise rates again at this meeting.

Most are predicting that the Fed will hold steady at this week’s meeting. Until last week, the stock market had cooled significantly since their last session, international tensions are higher and the inflation data released recently was decidedly tame. Of course, we can’t predict their decision, but the evidence supports this hunch. As we have pointed out in the past, the Fed controls short-term rates and if the Fed acts when the markets are not expecting it, volatility in the bond and stock markets can follow. It will be an interesting week.

The Weekly Market Update

Rates on 30-year fixed loans rose after falling to 2017 lows the previous week. For the week ending April 27, Freddie Mac announced that 30-year fixed rates rose to 4.03% from 3.97% the week before. The average for 15-year loans increased to 3.27%, and the average for five-year adjustables moved up to 3.12%. A year ago, 30-year fixed rates averaged 3.66%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield rose about 10 basis points this week. The rate on 30-year fixed loans moved with Treasury yields, rising 6 basis points to 4.03 percent. Despite recent swings in rates, the housing market continues to show signs of strength—both existing and new home sales in March exceeded expectations, and the Case-Shiller Home Price Index posted another solid gain.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

27
APR
2017

The Right Score: Special Real Estate Report

Score Models Vary

Score Models Vary

When is your “credit score” irrelevant in buying a house or refinancing a home loan? A new federal legal settlement with a major credit bureau has the answer: The only score that matters is the one your lender uses to evaluate you, not some random score you got on a website. All the others you might buy or see — there are dozens of them hawked on the Internet — may be interesting, but they won’t affect the interest rates you’re quoted, the fees you’re charged or whether your application gets approved or rejected.

The new legal settlement from the Consumer Financial Protection Bureau alleges that Experian, one of the big three credit reporting bureaus, “deceptively marketed credit scores to consumers by misrepresenting” them as “the same” as what their lender would use in determining whether and on what terms to offer them a loan. Experian’s promotions appeared on third-party websites, banner and display ads, direct mailings and sites such as AnnualCreditReport.com.

Which brings us back to home loans. If you’re like many home buyers and owners, you’ve seen online pitches and ordered your scores, often free. They may have come with tie-ins to credit card offers or credit monitoring and identity theft protection services. One site may have said your score is 788, ranking you as “excellent” on their scale. Then you apply to a lender for a preapproval and get the sobering news: Your middle FICO score — lenders usually pull scores from all three bureaus — is a 716, and that’s what we’ve got to use to price your loan. The score is okay, but it’s 85 points below where you thought you were, and below the cutoff point for the best interest rates and terms.

The FICO score your lender pulls for your application may not be the same as the score your credit card company might be sending you every month online. Or, perplexingly, it might even be different from the FICO score you get on MyFICO.com. That’s because FICO has introduced multiple models over the years, each with what the company describes as consumer-friendly improvements. The latest is FICO 9. The most widely used is FICO 8. The bottom line? Never depend on generic scores available online as part of your home financing planning process.

Source: Ken Harney, The Nation’s Housing

Want to know your right score?  Contact us and we will run a mortgage credit report for you.

26
APR
2017

McLean Mortgage Corporation Ranked #6 on “The List” in the Washington Business Journal

Washington Business Journal

The Washington Business Journal has released the 2016 ranking of leading home mortgage lenders serving Washington, DC. This list ranks all residential mortgage lenders by loan volume within the Washington, DC metropolitan area.

McLean Mortgage Corporation was ranked #6 on “The List” with a home loan volume just shy of $1.7 Billion. “This speaks volumes about what we have been able to accomplish in the nine years we’ve been in business,” commented company CEO Pat Peavley. “Our people and our culture will continue to be our guiding light as we move to grow and expand our footprint helping more and more people realize the American dream of home ownership.” Peavley also thanked all employees for their hard work and dedication in his announcement to the company.

ashington Business Journal

26
APR
2017

McLean Mortgage Corporation Ranked #6 on “The List” in the Washington Business Journal

Washington Business Journal

The Washington Business Journal has released the 2016 ranking of leading home mortgage lenders serving Washington, DC. This list ranks all residential mortgage lenders by loan volume within the Washington, DC metropolitan area.

McLean Mortgage Corporation was ranked #6 on “The List” with a home loan volume just shy of $1.7 Billion. “This speaks volumes about what we have been able to accomplish in the nine years we’ve been in business,” commented company CEO Pat Peavley. “Our people and our culture will continue to be our guiding light as we move to grow and expand our footprint helping more and more people realize the American dream of home ownership.” Peavley also thanked all employees for their hard work and dedication in his announcement to the company.

ashington Business Journal

24
APR
2017

They Are Back: The Weekly Market Update

Funding Deadline

Funding Deadline

Congress is back in session. Not that we are 100% sure that anyone missed them, but certainly there is some unfinished business on the table. For the past few weeks, international news has dominated the markets. Syria, Afghanistan, North Korea and Russia have led this domination, and certainly these world conflicts have influenced the markets — including stocks, bonds, energy prices and the price of gold.

This is not to say that domestic issues have fallen off the map, but when Congress is not in town, there will not be news of legislative progress or failures in the headlines. Now that Congress is back, there will be issues that need to be addressed on the domestic side, in addition to Congressional activity on international issues. One domestic issue hits this very week. This Friday, the stopgap funding bill for the operation of the Federal Government expires. Could we see a government shutdown?

Most political analysts predict that a shutdown will not take place. However, it is normal for the agreement to come at the last possible hour. And international issues may complicate the agreement with budget requests in place to increase defense spending with a lack of immediate corresponding cuts in domestic programs. While these issues are usually resolved before the government is shut down for anything but a minimal length of time, there is the potential for fireworks and saber-rattling. And if the government does shut down for a few days, could next week’s meeting of the Federal Reserve Board’s Open Market Committee be delayed? Always an interesting time in Washington.

The Weekly Market Update

Rates on 30-year fixed loans fell below the 4.0% mark this past week for the first time this year. For the week ending April 20, Freddie Mac announced that 30-year fixed rates fell to 3.97% from 4.08% the week before. The average for 15-year loans decreased to 3.23%, and the average for five-year adjustables moved down to 3.10%. A year ago, 30-year fixed rates averaged 3.59%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The rate on 30-year loans fell 11 basis points this week to 3.97%, dropping below the psychologically-important 4.0% level for the first time since November. Weak economic data and growing international tensions are driving investors out of riskier sectors and into Treasury securities. This shift in investment sentiment has propelled rates lower.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

20
APR
2017

Keys To Choosing a Lender: Special Real Estate Report

Keys To Choosing a Lender

Many Do Not Call Back

J.D. Power has found that 21 percent of homebuyers regret their choice of a lender. That in itself is regrettable. But this significant minority might have been able to avoid many of their issues if they had been more careful in picking who they worked with for financing in the first place. Whether dealing with a loan officer who works for a lender that actually funds its own loans, or a broker who works for himself and deals with more than one lender, you should expect him to be responsive, according to the Consumer Financial Protection Bureau, the federal watchdog agency that grew out of the recent financial crisis. Being responsive is a key trait.

But according to a recent survey of some 800 companies by Insellerate, a provider of support services for the marketing and sale of home loans, it took an average of 12 hours for loan officers to answer a client’s query. But that’s just among those who responded. A whopping 57 percent never responded at all, the survey found. And 60 percent of those who did respond failed to follow up with a second call. You also should be provided with a clear analysis of the different loan options that are available, along with an understanding of how they impact you financially, both initially and over time. Even more importantly, you should expect that the choices be explained in a way you can understand.

Choosing a home loan is possibly the biggest financial decision you will ever make, so if you ask for a simple explanation and you don’t get it, ask again and again until you are certain you understand. It’s also wise to make sure what you choose is suitable to your lifestyle and financial picture. Many loan officers qualify people for the biggest loan they can afford. But while there’s nothing wrong with that, you may not be comfortable forking over that amount every month. On the flip side, if you fail to send a piece of requested information, you should expect the officer to hound you for it, or at least be persistent in asking for exactly what the underwriters need to approve your loan.

Source: The Housing Scene, Lou Sichelman

Note: These findings emphasize the importance of working with an expert mortgage advisor and a reputable company to help you with one of the most important financial decisions you will be making. 

17
APR
2017

World Events Dominate: The Weekly Market Update

World Events Dominate: The Weekly Market Update

A Stark Reminder

Actually, we have had a few stark reminders recently. The most recent was the escalation of our engagement in Syria and another, a show of force near the Korean peninsula. Since the election, much of America’s attention has been focused upon domestic issues such as the health care bill, a nomination to the Supreme Court, budgets and more. But now we are reminded that the world is connected. Connected not only in our fight against terrorism, but also the economics. From Brexit, to a devastating tsunami on the other side of the world, we have been constantly reminded as to how events in one part of the world can affect our part of the world — both good and bad.

Some of these reminders reside on our domestic side as well. Not long after the first attempt at “re-reforming health care reform,” we now face a late April showdown which could result in a shutdown of the Federal government. While we are not predicting that this necessarily will happen, it is a reminder of the way Washington works — contentiously and slowly. This is especially true when major changes are proposed.

How does this affect us? We have talked about the surge of confidence that America has experienced in the past several months. It would be natural for this confidence to wane somewhat, as the processes move forward slowly. While this may slow down economic growth a tad, it also gives us the benefit of slowing down the rise in interest rates that market analysts have been predicting. Lower rates would help boost the economy and hopefully offset the cooling off of enthusiasm. While we can’t predict the path of rates or the economy, it does not hurt to gain some perspective as to the possibilities, especially when we get hit with news of world and domestic events.

The Weekly Market Update

Rates fell slightly to their lowest levels of the year last week. For the week ending April 13, Freddie Mac announced that 30-year fixed rates fell to 4.08% from 4.10% the week before. The average for 15-year loans decreased to 3.34%, and the average for five-year adjustables moved down slightly to 3.18%. A year ago, 30-year fixed rates averaged 3.58%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “Following a weak March jobs report, the 10-year Treasury yield dropped about 5 basis points. The rate on 30-year fixed loans fell 2 basis points to 4.08 percent. Not only did the average decline for the fourth consecutive week in our survey, it also fell to a new 2017 low.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

13
APR
2017

Homeowners Using Their Equity: Special Real Estate Report

Homeowners Using Their Equity

Remodeling In Favor

Homeowners are opening their favorite piggy bank again — their homes. As home values rise faster than expected, that increased homeowner wealth suddenly seems more enticing. It’s showing up in big remodeling growth. Ever since the financial crisis at the end of the last decade, homeowners have been extremely conservative with their home equity. Even those who had money in their homes kept it there. Now, as millions of borrowers come up from underwater on their home loans and many more see their home values jump sizeably on paper, borrowing more is back in favor.

Home equity lines of credit, known as HELOCs and often serving as second loans, allow homeowners to pull cash out of their homes when they need it. HELOC volume is now up 21 percent in the past two years, to the highest level since 2008, according to Moody’s. It is still nowhere near its housing boom level, when many people treated their homes like ATMs, but the trajectory is definitely pointing higher. Borrowers are also putting smaller down payments on home loans now, starting with less home equity either to save cash or because they can’t afford anything more. To put it in perspective, before the last housing boom, the median down payment was just over 7 percent. It then dropped to 3 percent during the height of the boom, as lenders offered all kinds of “creative” loan products that required little to no down payment. After the crash, down payments rose back above 7 percent again during the recovery. At the end of 2016, the median down payment had fallen to 6 percent, according to ATTOM Data Solutions, and it appears to be headed lower, as lenders offer more low down-payment products.

Homeowners are clearly leaning toward more leverage, but they are doing so in a far different environment than in 2006. Underwriting is stricter, especially for home equity loans, and borrowers must prove their ability to repay loans, including all financial documentation. Home equity continues to rise steadily, according to the Federal Reserve Board, and it is still rising faster than borrowers are withdrawing it.

Source: CNBC

Interested in using your equity to remodel, payoff debt or for investment purposes? Contact Us.

12
APR
2017

Presenting A Lead To A Partner

Presenting A Lead To A Partner

Presenting A Lead To A Partner

Many sales trainers will tell you that the key to obtaining more referrals is asking for the business. Absolutely false. If it were true, why have trainers been beating this into our heads for years and most of us still are not comfortable asking? The key to getting more referrals is putting ourselves in the position to ask. When we place ourselves in the right position, the business transaction will take place naturally. If it feels uncomfortable or is forced–it is not right.

Of course, an important question follows: How do you put yourself in a position to ask? This is a fairly complex issue and involves everything from market positioning to the delivery of great customer service. In this article, we will address only one positioning technique–the delivery of value to a business-to-business partner. Why do we start with this particular activity? Because there is no one area that demonstrates so effectively that asking is a finely tuned skill and not merely walking around and pleading.

Specifically, what we are referring to here is delivering a lead to someone who can deliver many leads to us. The law of reciprocity dictates that we deliver value to those who are delivering value to us. Within the real estate industry–it would not be unusual for real estate agents, loan officers, settlement companies, insurance agents, financial planners and even CPAs to “trade” prospects. The question is–how do you do such and achieve the most value in return? Have you ever delivered a lead to a partner (or a potential partner)–and never received anything in return? Here are some very important considerations–

First, make sure that this lead is not a one-shot deal. You must make lead generation an overall part of your business plan. Otherwise, your partner will not see you as a long-term valuable resource. They are more likely to see the gesture as a one-time windfall and look elsewhere for long-term value.

Secondly, target the right people. While it is always right to reward a present partner that delivers value to you on a regular basis, you must recognize that your business plan will sometimes require that you use your resources to develop or solidify new business relationships. Unfortunately, we usually select those WE want to service. The sales process is not about us–it is about the needs of whom we are serving. We must select based upon–

Lack of relationship interference. If they cannot use us in the long-run because of their established relationships–they are not the best recipient of our value.

Loyalty. How loyal are they to their partners and/or vendors? If they are not loyal to their present partners, what makes you think they will be loyal to you? In some respects, this aspect is a tough balancing act with the first point because those who are loyal are more likely to have relationship interference.

How are they going to treat your customer? Can they deliver great service? Your name is going to be on the line here (and hopefully again and again). Do not leave the results to chance.

Are they ethical? This aspect covers everything from them doing what they say they will do, to staying on the right side of the law.

Next, you must make sure you deliver the prospect in the right way. What we are talking about here is a business deal. Asking for the business is more than a question. It is a business negotiation. Make sure they know exactly what is expected and when. They must be in total agreement as to what they are to deliver.

Finally, you must follow-up with a vengeance. A key to success in sales is diligent follow-up and there is no area within sales in which this adage will prove to be more true than in this situation. If you do not follow-up appropriately, you are opening the door to such statements as “I haven’t had anyone to send.” If they did not have the business to allocate, why would you have selected them to utilize one of your most precious resources? You must show them that you are serious with regard to making sure they hold up their end of the business proposition. The longer you go without follow-up the less chance you have of collecting your reward.

You have heard this before–success is not an accident. Neither is failure. What we are talking about here is planning for success. Your precious resources could lead to very valuable relation-ships that will help you succeed. Or you could wind up wasting the chance. Which will it be?

12
APR
2017

Presenting A Lead To A Partner

Presenting A Lead To A Partner

Presenting A Lead To A Partner

Many sales trainers will tell you that the key to obtaining more referrals is asking for the business. Absolutely false. If it were true, why have trainers been beating this into our heads for years and most of us still are not comfortable asking? The key to getting more referrals is putting ourselves in the position to ask. When we place ourselves in the right position, the business transaction will take place naturally. If it feels uncomfortable or is forced–it is not right.

Of course, an important question follows: How do you put yourself in a position to ask? This is a fairly complex issue and involves everything from market positioning to the delivery of great customer service. In this article, we will address only one positioning technique–the delivery of value to a business-to-business partner. Why do we start with this particular activity? Because there is no one area that demonstrates so effectively that asking is a finely tuned skill and not merely walking around and pleading.

Specifically, what we are referring to here is delivering a lead to someone who can deliver many leads to us. The law of reciprocity dictates that we deliver value to those who are delivering value to us. Within the real estate industry–it would not be unusual for real estate agents, loan officers, settlement companies, insurance agents, financial planners and even CPAs to “trade” prospects. The question is–how do you do such and achieve the most value in return? Have you ever delivered a lead to a partner (or a potential partner)–and never received anything in return? Here are some very important considerations–

First, make sure that this lead is not a one-shot deal. You must make lead generation an overall part of your business plan. Otherwise, your partner will not see you as a long-term valuable resource. They are more likely to see the gesture as a one-time windfall and look elsewhere for long-term value.

Secondly, target the right people. While it is always right to reward a present partner that delivers value to you on a regular basis, you must recognize that your business plan will sometimes require that you use your resources to develop or solidify new business relationships. Unfortunately, we usually select those WE want to service. The sales process is not about us–it is about the needs of whom we are serving. We must select based upon–

Lack of relationship interference. If they cannot use us in the long-run because of their established relationships–they are not the best recipient of our value.

Loyalty. How loyal are they to their partners and/or vendors? If they are not loyal to their present partners, what makes you think they will be loyal to you? In some respects, this aspect is a tough balancing act with the first point because those who are loyal are more likely to have relationship interference.

How are they going to treat your customer? Can they deliver great service? Your name is going to be on the line here (and hopefully again and again). Do not leave the results to chance.

Are they ethical? This aspect covers everything from them doing what they say they will do, to staying on the right side of the law.

Next, you must make sure you deliver the prospect in the right way. What we are talking about here is a business deal. Asking for the business is more than a question. It is a business negotiation. Make sure they know exactly what is expected and when. They must be in total agreement as to what they are to deliver.

Finally, you must follow-up with a vengeance. A key to success in sales is diligent follow-up and there is no area within sales in which this adage will prove to be more true than in this situation. If you do not follow-up appropriately, you are opening the door to such statements as “I haven’t had anyone to send.” If they did not have the business to allocate, why would you have selected them to utilize one of your most precious resources? You must show them that you are serious with regard to making sure they hold up their end of the business proposition. The longer you go without follow-up the less chance you have of collecting your reward.

You have heard this before–success is not an accident. Neither is failure. What we are talking about here is planning for success. Your precious resources could lead to very valuable relation-ships that will help you succeed. Or you could wind up wasting the chance. Which will it be?

10
APR
2017

Interesting Jobs Data: The Weekly Market Update

Interesting Jobs Data: The Weekly Market Update

What the Numbers Mean

Every month the jobs numbers are of major interest to analysts who are looking for direction with regard to the economy. In essence, there is no up-to-date economic statistic which is more important, as job growth is the spark which can spur on economic growth, as well as inflationary concerns. In addition, there are certain employment reports that seem to attract even more interest because of other events occurring before, or as the data are being released.

March’s jobs numbers were no exception in this regard. This month, the numbers took on more importance because of these additional circumstances. For one, the report followed a pretty strong jobs report released last month. Two strong months of jobs growth could have provided a signal to the Federal Reserve Board, whose members will be considering when to raise rates again. To make the timing more interesting, the minutes from the last Fed meeting were released two days before the jobs report. These minutes give us a feel as to how the Fed is likely to react to the numbers, not only with regard to increasing rates, but also regarding paring off their portfolio of bonds and mortgages.

The report was also released after the stock market rally hit a pause in the second half of March, which enabled long-term interest rates to ease back down. A strong report had the potential to refuel the stock market rise and higher rates quite quickly. Thus, when the numbers were released on Friday, the increase of less than 100,000 jobs and the downward revision in the previous months’ gains, as well as stable wage growth, all seemed to have signaled that the economy is not running too hot — despite the drop in the unemployment rate. Weather factors may have affected the extreme variations from month-to-month and, thus, one should not be coming to any conclusions regarding one month of weak employment growth. Additionally, it will be hard to measure the immediate reaction to the news with the escalation of the Syrian conflict going on at the same time as the report was issued.

The Weekly Market Update

Rates moved down for the third week in a row, though the data was released before the employment report was issued. For the week ending April 6, Freddie Mac announced that 30-year fixed rates fell to 4.10% from 4.14% the week before. The average for 15-year loans decreased to 3.36%, and the average for five-year adjustables moved up slightly to 3.19%. A year ago, 30-year fixed rates averaged 3.59%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield was relatively unchanged this week, while 30-year fixed rates fell 4 basis points to 4.1 percent. After three straight weeks of declines, the 30-year fixed rate is now barely above the 2017 low. Next week’s survey rate may be determined by Friday’s employment report and whether or not it can sustain the strength from earlier this year.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

06
APR
2017

Adjustables Gaining Popularity in 2017: Special Real Estate Report

ARM Popularity Grows

ARM Popularity Grows

Adjustable-rate loans are more popular now than at any time in more than two years as interest rates start climbing. According to Mortgage Bankers Association data, the share of home loan applications taken by ARMs was the largest since October 2014. As nearly three decades of MBA data show, adjustable-rates get a lot more popular when the threat of rising rates looms.

According to the MBA, the average 5/1 ARM rate was nearly a full percentage point lower that fixed rates, at 3.48%. ARMs like the 5/1 are loans with starter rates which can increase after a set period — in this case five years. The ARM would represent savings of $93 a month for homes at the national median of $228,900, according to Zillow’s online mortgage market calculator.

ARMs made up a whopping 36.6% of total applications in March 2005, arguably the height of the housing frenzy, when rates were higher and the assumption was that any home loan represented a way into a home, with a refinance to follow later. That share was a more manageable 7.7% last week, and the 27-year history has the ARM share at 13.9%.

Source: MarketWatch

Note: Today’s adjustables are safer than those offered in the past. If you would like to learn more about today’s adjustable choices, contact us.

03
APR
2017

Anticipation Meets Reality: The Weekly Market Update

Anticipation Meets Reality: The Weekly Market Update

Change is Difficult

We have used some rather broad terms regarding describing the mood of the markets over the past few months. Words such as “confidence” and “uncertainty.” Today we would like to use another word — “anticipation.” One reason for the markets’ confidence in the past several months has been the anticipation of changes that would spur the economy. Logically, the markets knew these changes would take time, but when you have a rush of adrenaline, markets tend to get ahead of themselves.

Since the peak reached at the beginning of March, stocks have moved sideways and then turned decidedly negative in the second half of the month. Now, we do know that the market can’t go up every month and certainly stocks were due for a pause or correction. So, the question is–are stocks taking a breather, or are the markets getting antsy because of the realization that this is Washington and changes do not come quickly in Washington? Certainly, the fight over the heath care bill is an example of how difficult change can be.

Stocks could roar right back — even before this commentary is published. But if stocks continue to correct or just tread water from here, it may be that the markets want to see real news of economic growth before they rise again — as opposed to the anticipation of news. Some of that news may come in the form of the jobs report to be released this week. Meanwhile, the good news about this pause is that interest rates have also fallen with the stock market. This is happening despite the fact that the Federal Reserve Board raised short-term rates this month. What we are seeing is more proof that the Fed can’t control long-term rates. Having rates fall a bit just as the Spring real estate season starts is certainly not bad news.

The Weekly Market Update

Rates moved down for the second week in a row, coinciding with a weaker stock market. For the week ending March 30, Freddie Mac announced that 30-year fixed rates fell to 4.14% from 4.23% the week before. The average for 15-year loans decreased to 3.39%, and the average for five-year adjustables moved down to 3.18%. A year ago, 30-year fixed rates averaged 3.71%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield remained relatively flat this week. The rate on 30-year fixed loans fell 9 basis points to 4.14 percent, another significant week-over-week decline. Despite recent interest rate fluctuations, new home sales far exceeded expectations in February and jumped 6.1 percent to an annualized rate of 592,000.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

30
MAR
2017

Millennials Arise: Special Real Estate Report

Millennials Arise

Optimism Abounds

Both buyers and sellers alike are feeling very good about the housing market this spring, even as home values hit new highs and mortgage rates move up. A monthly sentiment index from Fannie Mae rose to the highest level since 2011, when the survey began, thanks to a surprising surge from millennials. “Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

Millennials are moving out of their parents’ basements and forming new households at a faster rate, according to Fannie Mae research. The leading edge of the millennial generation is entering the housing market in larger numbers today, with some venturing out of their desired urban cores to more affordable suburbs.

Millennials delayed both marriage and parenthood, but that is now changing. Nearly half of millennial buyers had at least one child, according to the 2017 Home Buyer and Seller Generational report just released by the National Association of Realtors®. That is up from 45 percent last year and 43 percent two years ago. Children are the primary driver of homeownership, which is now sitting near a record low. Just 15 percent of millennial buyers chose an urban area, which is down from 17 percent last year and 21 percent two years ago. “Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” said Lawrence Yun, chief economist at the Realtors. “These strong feelings bode well for even greater demand in the future as more millennials settle down and begin raising families.”

Source: CNBC

27
MAR
2017

What If The Fed Did Not? The Weekly Market Update

What If The Fed Did Not?

Alternative Reality

No, we are not delving into the world of science fiction. We can’t change what happened. But sometimes it is interesting to wonder what would have happened if an event did not take place. In this case, we are referring to the Federal Reserve Board raising short-term interest rates. As we have previously explained, the move was a “no-brainer.” The markets were surely expecting the increase. Therefore, it would have been a surprise if the Fed held rates steady.

The markets don’t like surprises. And a layman might have surmised that rates would have come down if the Fed kept rates where they are. Yet, that conclusion is not necessarily accurate. If the markets feel that inflation is becoming more of a threat and the Federal Reserve is not doing its job to rein in inflation, then long-term interest rates could move up even faster than they have already risen. This is why the Fed can raise interest rates at times and long-term rates can actually go down — though presently short-term rates have not gone up high enough for the analysts to predict that they will halt economic growth.

More evidence on the state of the economy is on the way. This week we have a report on personal income and spending, and next week we will see another jobs report. Coming after a strong report for February’s data, you can be sure that market analysts and the Fed will be watching closely for evidence that the economy and inflation are heating up. If we see that evidence, there will be speculation that another rate increase will be coming sooner, rather than later. A disappointing jobs report could make the Fed pause and ponder whether they are moving too quickly. That would be bad news for the economy, but good news for rates.

The Weekly Market Update

Rates bounced back down in the past week, not unusual for a week after the Fed raises rates, because the markets had moved up in anticipation of the action and there were no surprises. For the week ending March 23, Freddie Mac announced that 30-year fixed rates fell to 4.23% from 4.30% the week before. The average for 15-year loans decreased to 3.44%, and the average for five-year adjustables moved down to 3.24%. A year ago, 30-year fixed rates averaged 3.71%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield fell about 10 basis points this week. The average rate on 30-year fixed loans moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year rate in over two months, a stark contrast from last week’s jump following the FOMC announcement.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

23
MAR
2017

It’s Time to List Your Home: Special Real Estate Report

Ready to Jump Back In

Spring is Here

Those wanting to sell their home during the spring season shouldn’t be too quick off the mark to list, as waiting could mean a faster sale and a higher price. According to analysis from Zillow, waiting until late spring may be a better strategy…along with listing on a Saturday. It found that those homes listed in the first two weeks of May sold around 9 days faster and for almost 1 per cent more.

“With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season,” said Zillow Chief Economist Dr. Svenja Gudell. “Many home buyers who started looking for homes in the early spring will still be searching for their dream home months later. By May, some buyers may be anxious to get settled into a new home— and will be more willing to pay a premium to close the deal.”

The study also found that homes first listed on a Saturday averaged 20 per cent more viewings than those on other days.

Source: Zillow

20
MAR
2017

Rate Increase No Surprise: The Weekly Market Update

The Fed Has Spoken

The Fed Has Spoken

Since we spent the past several weeks explaining why the Federal Reserve Board was likely to raise rates last week, we can definitely say that the Fed’s decision was not a surprise — especially since the increase was limited to .25%, which was also expected. A disappointing jobs report could have caused the Fed to hold back, but that did not happen. Now, the most important question is, where do we go from here?

In this regard, the tone of the Fed statement is just as important as their decision to raise rates. While much more information will come out when they release the minutes of the meeting in a few weeks, their statement after the meeting gives us plenty to go on. It is also not a surprise that their statement confirmed that the Fed is satisfied with the direction of the economy at the present time and that they feel that the economy can “withstand” higher rates. It is also not a surprise that they feel that more rate increases are possible in 2017.

This brings up an important question. The economy can withstand a few rate increases, especially because rates were so artificially low. But how many increases can be absorbed before the economy starts to respond negatively? Though we can’t answer this question, we do remind our readers that the Federal Reserve Board’s move directly affects short-term interest rates, and only indirectly affects long-term rates. If the markets feel that the Fed is being aggressive to stave off the threat of inflation, then longer-term rates, such as rates on home loans and even cars, may not move as fast. Of course, if the economy keeps humming, then long-term rates are more likely to be affected at the same time.

The Weekly Market Update

Rates matched their highest level in more than a year as the specter of a Fed rate increase approached, but the numbers did not reflect a move down after the rate increase was announced. For the week ending March 16, Freddie Mac announced that 30-year fixed rates rose to 4.30% from 4.21% the week before. The average for 15-year loans increased to 3.50%, and the average for five-year adjustables moved up to 3.28%. A year ago, 30-year fixed rates averaged 3.73%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “As expected, the FOMC announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year. Although our survey was conducted prior to the Fed’s decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year fixed rate 9 basis points to 4.30 percent this week. Increasing inflation, continued gains in the labor market and the Fed’s intentions for further rate increases — all three will keep pushing rates up this year.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

16
MAR
2017

Tens of Millions Would Like to Buy: Special Real Estate Report

Ready to Jump Back In

Ready to Jump Back In

One in four U.S. adults say they are considering buying a home this year, which extrapolates to a whopping 59 million people, according to a recent survey by Bankrate.com. Minorities are expected to be big buyers this year. More than two in five black survey respondents said they were considering buying a home. That is more than double the percentage of potential white buyers. “Black homeowners were harmed in greater numbers by the housing crash and the foreclosure crisis,” says Holden Lewis, a Bankrate.com mortgage analyst. “Now that the economy has improved and time has passed, maybe they’re ready to jump back in and own a home again.”

Also, older millennials and Generation X – which encompasses the ages of 27 to 52 – are showing more willingness to either become homeowners or trade up to a new home, the survey showed.  Lewis notes, however, what many people say is not always what they’ll be able to do.

Rising rates and an uptick in home prices could prevent some would-be homebuyers from saving enough for a down payment and limited inventories could delay their efforts in finding a suitable home to buy. About 6 million new and existing homes were sold last year, according to the National Association of Realtors® and U.S. Census data.

Source: Realtor® Magazine Online

13
MAR
2017

The Jobs Report and Fed Meeting: The Weekly Market Update

Jobs, Stocks and More

Jobs, Stocks and More

The data is in. The jobs report has been released and the Federal Reserve Board’s Open Market Committee is meeting as we release this publication. Keep in mind that the employment numbers are a major factor in affecting the Fed’s decision — but they are not the only factor. The stock market rally, which indicates confidence, as well as inflationary indicators, are also watched closely. As a matter of fact, the numbers on wage growth might be almost as important as the jobs numbers themselves. Last month, wage growth came in 2.8% on an annual basis and this is seen as good news for workers but bad news on the inflation front.

Add a strong stock market and rising wage growth to the fact that the economy added 235,000 jobs last month and the unemployment rate ticked down to 4.7%, and you can see why the markets are predicting a rate increase. You might ask why a rising stock market would affect the Fed’s thinking. We have already spoken about the stock market’s indirect influence upon the economy. Certainly, the growth of equity will make those who own stocks more confident in making large purchases, and this has the potential to boast the economy.

However, there is a more direct link between the Fed and the rise in the stock market. The last thing the Fed wants to do is raise rates and stifle the economy. With the stock market so strong right now, the Fed is much more likely to conclude that the economy can withstand the news of higher rates. If consumers are uncertain, piling on a rate increase just makes things worse. If consumers are hopeful, they are much less likely to envision higher rates as a roadblock to success. Of course, this is all speculation, and by the time you read this commentary, you are likely to know what the Fed was really thinking.

The Weekly Market Update

Rates moved to their highest level of 2017 last week, as the jobs report approached. For the week ending March 9, Freddie Mac announced that 30-year fixed rates rose to 4.21% from 4.10% the week before. The average for 15-year loans increased to 3.42%, and the average for five-year adjustables moved up to 3.23%. A year ago, 30-year fixed rates averaged 3.68%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield rose about 10 basis points this week. For the first time in weeks, the rate on 30-year fixed home loans moved with Treasury yields and jumped 11 basis points to 4.21 percent. The strength of Friday’s employment report and the outcome of next week’s FOMC meeting are likely to set the direction of next week’s survey rate.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

09
MAR
2017

Existing Home Sales Rise: Special Real Estate Report

Homes Sales Robust

Homes Sales Robust

Existing-home sales in January reached their fastest pace in nearly a decade, the National Association of Realtors® reports. Total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—rose 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January. That’s 3.8 percent higher than a year ago and marks the strongest month since February 2007, according to the NAR.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” says NAR chief economist Lawrence Yun. “Market challenges remain, but the housing market is off to a prosperous start as home buyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”

Additional data from the report:

  • The median existing-home price for all housing types in January was $228,900—a 7.1 percent increase from a year ago.
  • Total housing inventories at the end of the month increased 2.4 percent to 1.69 million existing homes available for sale. That is still 7.1 percent lower than a year ago.
  • All-cash transactions comprised 23 percent of transactions in January, down from 26 percent a year ago.

Source: NAR

08
MAR
2017

Adding Value To Your Sphere

Adding Value To Your Sphere

Adding Value To Your Sphere

Marketing plan and sphere of influence. These terms are referred to much of the time when one is talking about marketing. But there seems to be no clear definition of these terms. Everyone agrees that they are all very important. But no one agrees what exactly they are. Therefore, we will give you our definition.

Sphere of influence. A sphere of influence is comprised of two main components.

1. Those who know you and you know them. This component of personal relationships is the most important of the entire sphere.

2. Those you have something in common with. Though less important than the other component, this part of the sphere can be very significant when formulating a marketing plan. Of course how much you have in common is imperative. If you are over six feet tall, you have something in common with other tall people. But this is not important to your sphere. If you have attended a particular church for 20 years, this is something that may be very important in regard to your sphere. In regard to attending a church or a school, there will be those at the institution that you know and others with which you just have this membership in common.

The sphere itself is comprised of seven main categories. It is the organization of these categories that can be helpful when developing a marketing plan–

  • Personal: friends, family and neighbors.
  • Previous customers: from your present business and previous businesses.
  • Previous prospects: those who decided to purchase from someone else or those you could not serve or chose not to serve.
  • Previous employees: those you have worked with.
  • Vendors: those from which you purchase goods and services and those who sell the same to your targets.
  • Associations: academic, religious, business, civic, hobbies, interests, sports and more.
  • Professionals: doctors, lawyers, accountants, financial planners, etc.

So you know what your sphere is comprised of. How does that help you devise a marketing plan? In simple terms–a marketing plan is the process of delivering value to your sphere. A marketing plan should be focusing on doing four things–

  • Determining what is the highest value to deliver to certain segments of your sphere and how to deliver this value.
  • Prioritizing the contacts within the sphere–from highest to lowest.
  • Moving people and businesses into the sphere.
  • Moving contacts up in priority within the sphere.

In essence, the sphere should resemble a pyramid. At the top of the pyramid will reside the most important contacts within your sphere (and there will be less of them, of course). At the bottom are the less important contacts (perhaps alumni members you don’t know). You can see how this process of prioritization can direct your marketing activities.

You may be calling and/or having business meetings with those on top of the pyramid. On the bottom of the pyramid, you may be mailing or advertising to these people. If you must advertise, doesn’t it make sense to advertise to people with whom you have more in common?

Sphere segmentation and prioritization also helps immensely with the value proposition. Now you can determine how best to deliver value. For example, with vendors you should be focusing upon helping them build their business. Why should they help you if you are not helping them?

One last question focuses on the term prioritization. Simply, a high priority target contains the potential for a high concentration of business to refer. You also should have a close relationship with that target and should be able to deliver value to that target. For example, if your spouse had the potential for referring a lot of business, shouldn’t that be your top priority? Focus on what is important and you will have a better chance at improving your results.

06
MAR
2017

Existing Home Sales React: The Weekly Market Update

Jobs and Confidence

Jobs and Confidence

In the past few weeks we have spoken a lot about confidence. Certainly, confidence has been the major influence behind the recent stock rally. It has also influenced the recent movements in rates and oil prices. If this confidence spills over to a hiring spree, then the chances of another rate increase by the Federal Reserve Board’s Open Market Committee likely comes sooner than later.

In other words, confidence begets confidence. For example, a bigger stock portfolio can move someone to purchase a home. Home purchases also can be spurred by fear. Existing home sales were up to start the year and one factor cited was the fear that rates could rise even further. For years, we have indicated that the time may come when the sale on money may be over. Keep in mind that we are not declaring this sale over, but certainly the recent confidence could help influence its demise.

It is interesting to note that interest rates spiked just after the election, along with the stock market rally. But since the first of the year, stocks have continued to shine, as rates have been fairly stable. Of course, the jobs report released this week could go a long way towards determining if this trend continues. A strong report which influences the Fed to act quickly, could create volatility. If the report is moderate, rates could remain calm. In a couple of days, we will know for sure.

The Weekly Market Update

Rates moved lower last week, but the survey was issued as the stock market rally of Wednesday saw an uptick in rates by mid-week. For the week ending March 1, Freddie Mac announced that 30-year fixed rates fell to 4.10% from 4.16% the week before. The average for 15-year loans decreased to 3.32%, and the average for five-year adjustables moved down to 3.14%. A year ago, 30-year fixed rates averaged 3.64%.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield remained relatively flat this week, while the rate on 30-year fixed home loans fell 6 basis points to 4.1 percent. Since the beginning of the year, the 10-year Treasury yield has covered a 22-basis point range. The range of movement for the 30-year has been half that, just 11 basis points.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

02
MAR
2017

Char-Lee Smith of McLean Mortgage Corporation Receives Associate Member of the Year Award

Associate Member of the Year Award

Char-Lee Smith of McLean Mortgage was awarded the Greensboro Builder Association’s 2016 Associate Member of the Year Award.

Char-Lee just recently celebrated her fifth anniversary as a member of McLean Mortgage’s Greensboro team.  She has been involved in the Greensboro Builder Association for more than three decades.

For the past two years, Char-Lee has chaired the Association’s Membership Committee and currently serves as an Associate Director on the Association’s Board of Directors.​

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