Skip to content

Wire Fraud Awareness and Prevention

September 17,2018
by admin

In light of the increasing and ongoing wire fraud in real estate transactions, HAR recommends the following to help prevent wire fraud from happening to you or your buyer:

Fake emails from title companies or other agents appear to be one way of being defrauded. Do NOT identify the title company to be used for the closing of the transaction in the MLS remarks or in any email exchange with clients, licensees or other parties. The bad person finding out the title company could be the first step to a wire fraud;

The buyer should only have verbal discussions, on the telephone or in person, with the title company concerning wiring instructions, which should be initiated by the buyer making the contact before it’s time to wire and NOT as a result of information received in an email from the title company, bank or licensee;

Licensee should not exchange emails with anyone or any entity concerning any matter related to buyer’s wiring instructions.

NAR has prepared a suggested email notice template to inform your buyers of this issue.

Email Notice Template by NAR
IMPORTANT NOTICE: Never trust wiring instructions sent via email. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct.

By 2019, cybercrime will cost businesses an estimated $2 trillion annually.Don’t be a part of that statistic!Implement the following best practices to safeguard you, your clients, and your business from online criminals.

Best Business Practices: Develop and enforce formal policies for ensuring data security.

  • Create, maintain and follow a comprehensive Data Security Program.*
  • Create, maintain and follow a comprehensive Document Retention Policy.*
  • Avoid storing clients’ personally identifiable information for longer than absolutely necessary.When you no longer need it, destroy it.

Best Email Practices: Unsecure email accounts are open doors to cyber criminals. Follow these guidelines to help keep that door securely shut and locked tight.

  • Whenever possible, avoid sending sensitive information via email.
  • If you must send sensitive information via email, make sure to use encrypted email.
  • Never trust contact information in unverified emails.
  • If an email looks even slightly suspicious, do not click on any links in it, and do not reply to it.
  • Clean out your email account regularly.You can always store important emails on your hard drive.
  • Do not use free wifi to transact business.
  • Avoid using free email accounts for business.
  • Use strong passwords.
  • Change your password regularly.

Best Transaction Practices: Real estate transactions require flurries of information between numerous parties. This makes for primetime opportunities for fraudsters. How do you secure your deal?

  • From the very start of any transaction, communicate and educate.Get all parties to the transaction up to speed on fraud “red flags,” and make sure everyone implements secure email practices.
  • When wiring money, the person doing the wiring should pick up the telephone and call the intended recipient of the wired funds immediately prior to sending the funds in order to verify the wiring instructions.
  • Remember to use only independently verified contact information.
  • Stay paranoid.A few years back the director of the FBI almost got taken by an email banking scam.If it can happen to him, it can happen to us.

Best Damage Control Practices: It’s happened. A breach of data, a successful scam, a hack. What to do?

  • If a money wire has gone out, immediately contact the bank to try and stop the funds.
  • Notify all affected or potentially affected parties.Many states have data breach notification laws.
  • Change all of your passwords.If possible, change usernames as well.
  • Talk to your attorney.
  • Contact the police.
  • Report the breach to the FBI Internet Crime Complaint Center: (link is external)
  • Report to your REALTOR® Associations.

Source: National Association of realtors®

Source: Houston Association of REALTORS®

HAR Announces YPN 20 Under 40 Rising Stars in Real Estate!

September 17,2018
by admin

The 20 under 40 Rising Stars in Real Estate Selection Committee met recently to review the applications received for the 9th Annual YPN Awards. The judges spent several days combing through the applications, reviewing candidate production, leadership experience and community service with the goal of choosing 20 young agents that represent a “well-rounded REALTOR.®” It was a very challenging task as so many qualified applicants applied.

Many of the winners have applied more than once, so we encourage you to reapply in the future if you were not chosen this year. The awards will be presented on October 4th at the Bayou City Event Center in a Hollywood-style luncheon presentation featuring Houston’s most loved Home Town Hero “Mattress Mack” Jim McIngvale. Single tickets and tables of 10 can be purchased at

We applaud all of you who have taken the time to apply for this prestigious HAR award and extend our congratulations to the winners.

We are pleased to announce the following 2018 winners:

Source: Houston Association of REALTORS®

Broker, Sales Products; Lender and Agency Florence Updates

September 17,2018
by admin

TRID 2.0: mandatory compliance on 10/1 is only a few weeks away. Temenos has a primer on it, as does Qualia. The MBA had a piece on it. The NY MBA has a webinar next week. In Michigan the MMLA has a seminar on it this week. Hopefully everyone’s up to speed already.

Lender Products and Services

Stearns Wholesale helps brokers grow and brand their business with social media. Marketing Tools for SNAP 2.0 now offers Social Media Graphics for our most popular products and services. This marketing portal allows you to create personalized marketing pieces to help you extend your reach, grow your customer base and brand your business. Customizable flyer and social media templates can be personalized for both business-to-business and consumer relationships. It’s Easy! We provide the flyers and graphics, with over 4,000 combinations available, then you add your logo and personalized information. Stay top of mind with your borrowers by providing relevant information to print on marketing flyers or social graphics to post on Social Media. Learn more about Marketing Tools for SNAP 2.0 here.

Texas State Affordable Housing Corporation (TSAHC) has a new 5% down payment assistance product that offers a much lower interest rate on our HFA Preferred Conventional loans. The down payment assistance will be in the form of a repayable second lien with 0% interest and no monthly payments. Contact your Lakeview Business Development Director, or email TSAHC, or visit TSAHC Homebuyer Programs for more information.

VirPack announced its latest integration with Calyx Software. The integration enables Point and PointCentral customers to leverage VirPack’s virtual file automation capabilities including: multiple methods of document capture, automated indexing with OCR, and rule-based workflow capabilities. With VirPack’s one-click electronic loan delivery, Calyx customers also gain the ability to quickly and precisely deliver loan files and data electronically to investors, HUD for FHA insuring, servicers, subservicers, QC firms and MI companies. “The positive reaction we have received from Point and PointCentral customers validates that our integration delivers increased productivity and efficiency without major IT and operational disruption,” said Wayland Pond, Chief Business Development Officer of VirPack. “Using best-in-class virtual document management and workflow technology will enable Calyx customers to fund more loans with the same staff and meet the competitive challenges of driving down per loan costs.” Contact Kelli Himebaugh, Director, National Sales (703-996-4894) to learn more.

Join Regions Bank, First Tennessee Bank and Total Expert on a complimentary webinar on Sept. 19 from 1:30 – 2:30PM CT: Building Sound and Sustainable Sales Practices. These industry leaders will share their insights on best practices for banks to drive revenue and increase customer retention in today’s competitive market. Explore new approaches and techniques for sales executives and learn how to drive success across multiple lines of business. Understand how digital migration is redefining the relationship between marketing and sales and how to empower producers to build customers for life and boost sales capabilities with a focus on relationship building. Listen as industry veterans share their knowledge on the technology and techniques needed to improve sales outcomes and drive growth in a challenging market. If you cannot make the webinar tomorrow, register here and a recording will be shared following the live event.

Exciting news from the Digital Mortgage Conference in Vegas yesterday as Maxwell announced its groundbreaking new mortgage product, Maxwell ApplyID™ API. Maxwell ApplyID™, with consent from the borrower, gathers the borrower’s information from its network of data providers to pre-populate fields in the loan application, filling in personal information, employment history, income, real estate owned, financial assets, and more. This new API enables clients to receive a completed Fannie Mae 3.2 file with minimal effort from the consumer. This is just one more innovative step forward from an industry-leading player in the digital mortgage space. Maxwell’s Point of Sale platform is a must-see for small- to mid-size lenders looking for a digital mortgage solution that will enhance and evolve the human relationship between borrower and loan officer. To learn more about Maxwell or request a personalized demo for your business, click here.

Disaster Updates

Create an inventory of personal and household valuables and use photo or video documentation to help assess their value and determine replacement costs. Contact your insurance agent or visit the Federal Emergency Management Agency’s (FEMA) website,, to determine if you need a flood insurance policy. FEMA also offers a guide with checklists to help prepare for emergencies and natural disasters. For more information on crisis preparedness, visit ICBA’s website.

As FEMA publishes impacted counties per the declaration of a state of emergency in North Carolina, South Carolina and Virginia, clients and Pacific Union employees continue to be responsible for monitoring the FEMA Website, their lending areas and pipeline, and ensuring impacted properties meet agency, investor and Pacific Union requirements.

Fannie Mae posted reminders for those impacted by Hurricane Florence of the options available for mortgage assistance. Under Fannie Mae’s guidelines for single-family mortgages, Homeowners impacted by Hurricane Florence are eligible to stop making mortgage payments for up to 12 months, during which time they: will not incur late fees during this temporary payment break, will not have delinquencies reported to the credit bureaus. Servicers are authorized to suspend or reduce a homeowner’s mortgage payments immediately for up to 90 days without any contact with the homeowner if the servicer believes the homeowner has been affected by a disaster. Homeowners can reach out to Fannie Mae directly by calling 1-800-2FANNIE (1-800-232-6643). (Click the link for all details.)

Freddie Mac has issued a reminder to Servicers of its disaster relief policies for borrowers who have been affected by Hurricane Florence. Freddie Mac’s disaster relief options are available to borrowers whose homes or places of employment located in presidentially-declared Major Disaster Areas where federal individual assistance programs are made available to affected individuals and households. Areas where FEMA has not yet made individual assistance available, mortgage servicers may immediately leverage Freddie Mac’s short-term forbearance programs to provide mortgage relief to their borrowers that have been affected by the hurricane. A list of these areas can be found on the FEMA’s website.

FHA issued a reminder to mortgagees about its guidance for originating and/or servicing FHA-insured forward and reverse mortgages in locations in the U.S. and its territories when the President declares it a major disaster area. FHA-insured mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster. FHA-insured reverse mortgages (HECMs) that become due and payable for reasons other than the death of the last surviving borrower and eligible nonborrowing spouse are subject to a 90-day extension of HECM foreclosure timelines. In PDMDAs only, HUD provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD’s loss mitigation program.

Recall that Hurricane Harvey influenced material prices, especially if the materials are byproducts of natural gas processing and crude oil refining. Homebuilders saw an increase of 5.6 percent in the cost of raw materials year over year in November, marking the largest rise since 2011. One of the main factors in the cost has been the increase in the price of softwood lumber of 17.4 percent year over year, which is used for framing and other structural applications. The rise in price coincided with a renewal of tariffs on Canadian lumber that had previously expired in 2015. Other building materials such as roofing asphalt and plastics products have been affected by an increase in natural resource prices after remaining flat or seeing declines over the last couple of years.

PennyMac Correspondent Group has posted a Hurricane Florence Disaster Policy announcement.

Plaza Home Mortgage has reinstated loan funding in the state of Maryland. There is no change to the suspension in funding for South Carolina, North Carolina and Virginia at this point. As it actively monitors Hurricane Florence Plaza will provide notifications of any other changes in its operations.

Mortgage Solutions Financial posted an announcement regarding the Hurricane Florence- Temporary Funding Suspension.

AmeriHome suspended loan purchase activities. Counties included in the temporary funding suspension are indicated by National Hurricane Center maps as potentially sustaining substantial damage when Hurricane Florence makes landfall, and in the days following. Many of these counties are currently under mandatory evacuation orders.

Ditech Approved Correspondent Clients: Due to the potential impact and current path of Hurricane Florence, Ditech is suspending the funding of all loans in the following counties: North Carolina Beaufort, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrrell and Washington. South Carolina Beaufort, Berkeley, Charleston, Chesterfield, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Jasper, Marion, Marlboro and Williamsburg. Virginia Accomack, Chesapeake, Gloucester, Isle of Wight, Lancaster, Mathews, Middlesex, Northampton, Northumberland, Surry, VA Beach and York.

Until further notice, Citadel Servicing is will be suspending loans with subject properties in Georgia, North Carolina, South Carolina, Virginia and West Virginia. “Please notify your borrowers immediately about the funding delay. If you have already scheduled a signing, please cancel these appointments until further notice.”

Capital Markets

Happy National Cheeseburger Day. Is a tariff like gluten? You know, where you ask the average person on the street what it is, and they think it’s bad, but they really have no idea? Goldman Sachs and JPMorgan Chase have warned that the trade row between the US and China risks tipping markets into bear territory. Earnings, growth and equity valuation at S&P 500 companies could be hit if the Trump administration adds tariffs on Chinese imports, the banks say. If our economy is dampened, that should keep a ceiling on rates, right?

Rates didn’t do much yesterday, though the U.S. 10-year did close +1bps to hit the 3.00% barrier (its highest level since May) with news reports focusing on President Trump seeking a 10.0% tariff on $200 billion worth of imports from China. Markets were none too pleased to hear Chinese negotiators may be reluctant to return to the table after this latest round of rhetoric. National Economic Council Director Larry Kudlow weighed in, stating that President Trump has not been satisfied with trade talks and that new tariffs could be announced soon. Mr. Kudlow also said that budget deficits over the next few years will be between 4.0% and 5.0% of GDP per year. Separately, Richard Clarida was sworn in as the Vice Chairman of the Federal Reserve, beginning a four-year term.

Today’s light economic calendar has non-market moving numbers: Redbook same-store sales, the NAHB Housing Market Index for September, and the Treasury’s July TIC data. Also, Yom Kippur, the holiest day in Judaism, begins at sundown and continues through Wednesday. We start with rates up from Monday with the 10-year yielding 3% and agency MBS prices worse a few ticks (32nds).

Jobs and New Positions

GSF Mortgage Corporation announced it has selected award winning technology provider PromonTech as vendor of choice for their point of sale lending portal solution. By partnering with PromonTech, GSF Mortgage Corporation will deliver a more modern and exceptional experience for customers. Implementing this new, all-in-one portal for customers to use during their mortgage process, provides a consistent, intuitive and collaborative experience on any device. The originator experience is also upgraded. The new pipeline manager and borrower collaboration tools streamline our processes and brings our sales team closer to their customers with less effort. Interested in a retail opportunity, contact Chad Jampedro.

Top producers like you don’t go to work every day to lose money. Nor do you put in the work knowing that your efforts mean nothing. High producing MLOs and branch managers ENJOY working at Assurance Financial because they close more loans with the same amount of effort they were giving before, and they feel like their efforts are valued. Just ask one of our Senior Loan Officers: “I don’t even know what another company could say to recruit me away from Assurance. It’s a dream job in my opinion.” That’s an actual quote from one of our senior MLO’s- and that could be you. Assurance Financial is a growing private full-service residential mortgage banker with offices throughout the South, East Coast, and Midwest, and we may be just what you’re looking for.Contact Paul M. Peters, CMB (225-939-6353) for a confidential discussion today.

PrimeLending is excited to welcome Brian Miller as the new VP, Sales Recruiting. Brian is hitting the ground running, bringing 20 years of recruiting experience and more than 15 years of mortgage industry expertise to his new position. At PrimeLending, he’ll play a pivotal role in the company’s branch expansion initiative by partnering with senior production managers to help identify and recruit top producers nationwide. “We have an amazing story to tell at PrimeLending,” he said. “We’re a proven leader in the industry committed to growing market share through investing in our retail channel. I can say with confidence that PrimeLending offers loan originators the best environment in which to achieve success.” Prior to PrimeLending, Brian worked at Countrywide, Bank of America, MetLife and Stearns Lending. If you’re a top producer looking to secure your future, contact Brian (469.737.5729).

Fannie Mae announced that Manuel “Manolo” Sánchez Rodríguez has been elected to the Board of Directors. Mr. Sánchez served as Chairman and CEO of Compass Bank, Inc., a U.S. subsidiary of Banco Bilbao Vizcaya Argentaria, S.A., and is a banking, financial services, and technology expert.

MBS Day Ahead: Bonds Adrift on an Angry Sea of Red

September 17,2018
by admin

Not to be confused with the Red Sea, which is an actual place, the sea of red in the title is merely a reference to general bias toward weakness in bond markets for however long you care to look back in time (provided you don’t look back more than 2 years). Most pressing is the time frame between now and the end of August which has seen 10yr yields rise nearly 20bps. That makes the past 3 weeks the worst selling spree since April, and introduces yet another attempt to break free from the gravitational pull of 10yr yields at 3%.

Bond bulls hope to see gravity kick in at the teal line in the following chart. The manner in which it’s been approached suggests we shouldn’t take such support for granted, but neither can the technical significance of the 3% zone (3.015% specifically, over the past 3 months) be underestimated. If the ceiling holds, we can use the momentum stochastic (at the bottom of the chart) to confirm a shift (green/teal lines following the path of the dotted white line).

2018-9-18 open

There are no significant market movers on tap today. The only econ data is the 10am NAHB Housing Market Index (builder confidence, essentially). Meanwhile, equities markets are expected to continue gyrating in response to various trade-related developments, following headlines regarding the most recent US/China tariff headlines.

House-Hungry Millenials Help Keep Builder Confidence Solid

September 17,2018
by admin

Builder confidence in the market for newly-built single-family homes stabilized a bit in September. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which has been wobbly in recent months, retained its August reading of 67 in September. The two months are tied at the lowest level of the index so far this year.

“Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” said NAHB Chairman Randy Noel. “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index measuring current sales conditions rose 1 point from August and the component gauging expectations over the next six months gained 2 points. This put both at components at 74 for the month. Meanwhile, the metric charting buyer traffic held steady at 49.

“A growing economy and rising incomes combined with increasing household formations should boost demand for new single-family homes moving forward,” said NAHB Chief Economist Robert Dietz. “However, housing affordability is becoming a challenge, as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish. Interest rates are also forecasted to keep rising.”

Regional scores are presented as moving averages. The index in the Northeast rose one point to 54 and the South remained unchanged at 70. The West edged down a single point to 73 and the Midwest fell three points to 59.

Mortgage Rates Match 7-Year Highs

September 17,2018
by admin

Mortgage rates may have had a fairly bad day last Friday, but today was worse. Today officially saw the average lender back at rates not seen since May 17th, 2018. That date might not seem too far away, but at the time, it marked the highest rates since late April of 2011. In other words, today’s rates matched 7-year highs.

If there’s a saving grace, it’s the fact that underlying bond markets were able to improve throughout the day without most mortgage lenders adjusting rate sheets accordingly. In other words, if bonds are in the same territory by tomorrow morning, the average lender would be offering slightly lower rates.

The other potential saving grace is that rates have had a bad enough moving streak that they’re increasingly likely to catch a break simply due to the normal cadence of bond market momentum. That’s another way of saying that things have been bad enough for long enough that we’re due for at least a shallow rebound. How shallow? Frankly, it could be so shallow that the average mortgage-seeker might not notice much of a difference in loan quotes. We may be waiting for next week’s Fed announcement before seeing the next big move.

Loan Originator Perspective

Bonds took a little breather today from the upward trend. I am still suggesting locking at origination until further notice or signs of any meaningful improvement. –Al Hensling

Today’s Most Prevalent Rates

  • 30YR FIXED – 4.75
  • FHA/VA – 4.5%
  • 15 YEAR FIXED – 4.25%
  • 5 YEAR ARMS – 3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates moved higher in a serious way due to several big-picture headwinds, including: the Fed’s rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.

  • Rates cooled off heading in the summer months, but that proved to be the eye of an ongoing storm. As long as economic data remains strong, rates can continue to move higher in general, even though there may be brief periods of correction.

  • It makes sense to remain defensive (i.e. generally more lock-biased) because the headwinds mentioned above won’t die down quickly. It will take a big change in economic fundamentals or geopolitical risk for the big picture to change.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.

MBS RECAP: Bonds Battle Back After Hitting Long-Term High Yields

September 17,2018
by admin

10yr yields briefly hit their highest levels since May 23rd this morning after one large trade started a snowball sell-off in Treasuries. Before that, modest weakness was already intact.

“A snowball sell-off to 4-month highs” sounds a bit more dramatic than the actual scope of weakness. At the worst moments of the day, we were still looking at less than 3bps of losses in 10yr yields. It didn’t take long for buyers to take advantage of the yields, even though traders were contending with another big day of corporate bond issuance. Making the rally slightly less impressive was the fact that stocks were selling at the same time, potentially adding a risk-off component to the move.

Ultimately, 10yr yields weren’t willing to dip back below the 2.99% technical level and Fannie 4.0 MBS didn’t manage to make it more than 1/32nd (0.03) back into positive territory.

Accredited Buyer’s Representative (ABR) Course

September 16,2018
by admin

This is a 2-day class. The Accredited Buyer’s Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation demonstrates to peers and consumers your commitment to providing outstanding service for real estate buyers.

Please review additional requirements needed to complete this designation on the REBAC website

Date: September 27 & 28
Time: 8:30 a.m – 5 p.m.
Location: HAR Montgomery
Investment: $199
Sing Up HERE Today

Source: Houston Association of REALTORS®

Fannie Thinks Economic Expansion Just Peaked

September 16,2018
by admin

The robust growth in the economy in the second quarter may be the final peak of this expansion according to Fannie Mae’s Economic Development Report for September. Initial data indicates the 4.2 percent growth last quarter appears to be moderating to the estimated third quarter gain of 3.2 percent predicted in the August report. All factors considered, including inventory restocking and increased government spending leads Fannie’s Economic and Strategic Research Group (ESR) to expect full-year 2018 growth of 3.0 percent before a slowdown to 2.3 percent in 2019 as the fiscal stimulus runs its course.

ESR expects consumer spending and business fixed investment growth to moderate but remain at a solid pace but expect that trade will drag on growth. Second quarter growth had benefitted in part by the frontloading of exports ahead of the July tariffs. The first month of the new quarter, showed a marked drop in agricultural exports which is expected to have continued, especially for soybeans, into August.

The group also expects that residential investment will subtract from growth for the third consecutive quarter, the first time during the expansion that a slump has been that protracted. The ESR refers to housing as “a wet blanket”, saying the entire housing sector has been soft. Single family housing starts were up only slightly in July after the largest decline so far this year, 9.0 percent, in June. That same pattern played out with multifamily starts as well.

One positive development is an apparent response from home builders to strong first-time buyer demand by constructing smaller homes. The typical newsingle-family home size has been falling since peaking in 2015. The median square footage dropped sharply in the second quarter to the smallest reading since the end of 2012.

July also saw the slowest pace in new home sales since last October after the third decline in four months. Demand remains strong; over two-thirds of sales were of homes that were either under construction or not yet started, the highest share since the end of 2015.

According to the National Association of Home Builders Housing Market Index however, builders aren’t feeling it. They indicate that demand is softening in their reports regarding sales expectation and buyer traffic. They are also challenged by pricing homes to cover material and labor cost increases. Fortunately, some material prices, such as for lumber, have started to ease. This could allow builders to offer more favorable pricing which might lead to an improvement in building and sales activity going into the fall.

The trend for existing home sales has been even worse than new home sales. They were down in July for the fourth month, making their worse showing since February 2016. Inventories have been up on an annual basis for the first time in three years but remain at historic lows. Pending sales, one leading indicator of existing home sales, fell for the third time in four months in July and another, purchase mortgage applications, dropped in August for the second straight month.

Home prices continue to outpace income growth and, along with a near 60 basis point increase in interest rates since the first of the year, are weighing on affordability and home buying sentiment. Fannie Mae’s Home Purchase Sentiment Index® has trended lower from its record high in May, with the net share of consumers saying now is a good time to buy a home sliding further in August to the second lowest reading in the survey’s eight-year history.

Fannie Mae has now lowered its forecast for housing starts this year to just under 900,000 but has kept its home sale forecast essentially unchanged at 6.12 million, reflecting a 6 percent increase in new home sales and a nearly 1 percent drop in existing home sales. Their outlook for purchase and refinance mortgage originations is little changed from August, with total single-family mortgage originations projected to fall about 9 percent to $1.67 trillion in 2018 and a refinance share of 28 percent.

The pop in annual wage gains in the August jobs report came on the heels of recent increases in broader measures of inflation. The Fed’s preferred measure, the headline personal consumption expenditures (PCE) deflator, rose 0.1 percent in July, pushing it up to 2.3 percent on a year-ago basis. Since March, the annual increase in the PCE deflator has equaled or exceeded the Fed’s 2-percent target and the annual rise in the core PCE deflator (excluding food and energy) accelerated one-tenth to 2.0 percent in July. These recent trends seem to support Fed Chair Jerome Powell’s contention that raising interest rates too slowly could lead to overheating. Fannie Mae continues to expect September and December rate hikes consistent with what is implied in the “dot plot,” showing fed funds rate projections by members of the Federal Open Market Committee (FOMC). This plot also implies three hikes next year, but Fannie Mae believes such a pace would be too aggressive given its forecast for slowing growth. The fed funds futures market has also turned more bearish and now implies the last rate hike for the cycle will occur in 2019.

The EDGE: Week Of September 17, 2018

September 16,2018
by admin

In This Week’s “The EDGE”

  • Hurricane Harvey Distorts August Housing Analysis
  • Houston Market Movements
  • Beware of Wire Fraud
  • Don’t Miss These HAR Events
  • Open Your Mind to Learning

For your convenience, this presentation was saved in two different formats. Click the icons to download in .pdf (Acrobat) or .ppt (PowerPoint)

Source: Houston Association of REALTORS®