Russell Vincent - James Outland

March 27th 2020

December 30th, 2019

MMG Weekly Update November 22nd, 2019

Last week in Review, Forcast, Fannie may bond 3.5%, Mortgage Guide and Economic Calendar

MMG Weekly Update November 15th, 2019

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“Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely.”

– Fed Chairman Jerome Powell, 11/13/2019

This quote from our Fed Chair on Capitol Hill this past week was the definition of a “Goldilocks Economy” and reaffirmed the markets that there is no recession in sight!

Thanks to this strong economic backdrop, Mr. Powell also said it’s highly unlikely the Fed will cut rates again in December. Remember, Fed rate cuts don’t affect home loan rates, so don’t expect a sharp uptick in mortgage rates. Why?

As the Fed’s quote states, inflation remains low and near the Fed’s target. If inflation moves higher, home loan rates move higher. The opposite is also true.

Bottom line: home loan rates improved from the worst levels of the week and head into mid-November still hovering near three-year lows. What an opportunity when coupled with the Goldilocks backdrop.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

Forecast for the Week

The upcoming week’s economic calendar will highlight the housing sector which has been gaining momentum in this “Goldilocks Economy” due in part to a strong labor market, rising wages, and historically low home loan rates.

With earnings season winding down, investors will continue to be trapped in the trade headlines from the U.S. and China as a “phase one” signing is expected to happen in the coming weeks.

Reports to watch:
·         From the housing sector, Housing Starts and Building Permits will be released on Tuesday, followed by Existing Home Sales on Thursday.
·         The Philadelphia Fed’s Manufacturing Index will be delivered on Thursday and will garner some attention.
·         On Friday, Consumer Sentiment will be released.

The Mortgage Market Guide View

As a busy, working professionals, trying to host a holiday party often feels like an overwhelming burden. Don’t stress! Follow these handy tips so you can happily host a Thanksgiving or holiday party and still find a balance between work and family.
·         Shop early. Don’t wait until the last moments to shop. There are lots of people in the stores doing the same thing, and you may not find the items you’re looking for.
·         Prep ahead of time. Throughout the week leading up to the party, prep, and store as much food as possible.
·         Stick with familiar recipes. If you’re busy, you won’t have time to experiment with creative recipes. Instead, use the ones that you are familiar with so you don’t have to overthink the ingredients and preparation of the dishes.
·         Buy pre-made appetizers and desserts. The star of a holiday meal isn’t in the appetizers or desserts – it’s the main meal, so save your energy for that. You can also ask people to bring an appetizer or dessert.
·         Have your dishes and cutlery ready. Before the party, pull out all the dishes, serving bowls, cutlery, etc. Clean and organize them, and have them ready to go so you aren’t scrambling last-minute to find the serving spoons.
·         Set up stations. Have an area for drinks, trash, and recycling bins, and even consider having a buffet set up so people can serve themselves.
·         Hire a housecleaner. Having help cleaning before and after the party will save you an enormous amount of time and energy.
Follow these tips and enjoy the holidays!

Sources: The Kitchn, The Spruce Eats, Cooking Light

Russell Vincent
Sales Manager | NMLS #964624
2236 S. Broadway, Suites A & B, Santa Maria, CA 93454
rvincent@guildmortgage.net
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Phone:(805) 361-0355
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I am licensed to do business in the state of California. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act an Equal Housing Lender; Company NMLS #3274. All information, loan programs, and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.
All Rights Reserved. ©2018, Guild Mortgage Company. Click here to view Guild Mortgage Company NMLS Consumer Access; Company Corporate Address: Guild Mortgage Company, 5898 Copley Drive, San Diego, CA 92111. State of Missouri Principal Location: 17280 North Outer 40, Ste. 101, Chesterfield, MO 63005.

07/22/2019

This past week had little economic data for the financial markets to react to. As a result, home loan rates have inched higher though they remain near multi-year lows.

Take a look at the chart below. It’s pretty easy to see the sideways trend in mortgage Bonds and the reason why home loans have stabilized since the beginning of June.

It is normal to see quiet sideways trading action in the summer months, especially with the U.S./China trade war punting into the future and the Fed about to cut rates at month’s end. Traders are more apt to sit on their hands and wait for the next directional move in the financial markets.

What should we expect next for home loan rates? Volatility. Long, boring and complacent sideways trading patterns like we are seeing in mortgage Bonds are typically followed by an increase in volatility, and a sharp breakout one way or the other.

How mortgage Bonds respond to the Fed Statement and rate cut on July 31 may very well determine the next directional move in home loan rates.

Bottom line: anyone looking to either refinance or purchase a home … being ready to lock in the next couple of weeks would be wise. A Fed rate cut doesn’t guarantee that home loan rates will move lower. In fact, ever since the probability of a Fed rate cut hit 100%, home loan rates ticked up a bit.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

Forecast for the Week: 07/22/2019

The upcoming week looks to be on the slow side once again, so the sideways summer trend in rates may continue for one more week.

There is little economic data being released and Fed members will not be speaking during this blackout period prior to the July 31 Fed meeting where a Fed rate cut is fully expected.

A wildcard, which could spark the volatility, could be fresh U.S./China trade headlines.

I’ll be watching and will alert you should things change.

Reports to watch:

Housing data will come from Tuesday’s release of Existing Home Sales followed by Wednesday’s New Home Sales.
Durable Orders and Weekly Initial Jobless Claims will be released on Thursday.

07/12/2019

This past week, Fed Chair Jerome Powell reaffirmed the Federal Reserve’s dovish position as he testified on Capitol Hill, thereby paving the way for the first Fed rate cut in 10 years later this month.

Mr. Powell used the word “uncertainties” five times in his prepared speech to describe potential headwinds to the U.S. economy. When things are “uncertain”, here or around the globe, it’s the Fed’s job to be “accommodative” and provide easy monetary policy to stimulate growth and investment, and boost confidence.

Here’s what we have to consider now that the Fed is going to cut rates – potentially by as much as .50% on July 31.

Fed rate cuts are designed to weaken the U.S. dollar, promote inflation, stimulate the economy, boost Stock prices, boost confidence, and lift some uncertainty. This is really good news for the economy and housing but at the same time, home loan rates will not move lower in lockstep with a Fed rate cut. In fact, we might see a limit to how low home loan rates move in the near-term as we see how Fed rate cuts make their impact on the economy.

However, there is a tug of war happening which continues to pull our rates lower, and that is the declining global yields in places like Germany, Spain, and Japan. Due to “uncertainties” within their economies, their Bond yields and interest rates continue to decline, and as a result our Treasuries and Mortgage Bonds push higher in price and lower in rate as well.

Bottom line: The Goldilocks scenario for housing continues. We are seeing home loan rates near the best levels in two years and the Fed is about to embark on rate cuts which are designed to help the U.S. economy avoid a recession. Clients should understand that if the Fed is successful, and the recession fears lift, home loan rates may not improve much further.

07/03/2019

The housing market is enjoying a great 2019 and the good times are poised to continue. We are seeing home price gains slow to a healthier level and at an equilibrium with wage growth. Consumer and business confidence remain at multi-decade highs, unemployment rates are at 51-year lows, stocks are at all-time highs, and thanks to slowing economies abroad and low inflation … the Fed is expected to cut interest rates at the July FOMC meeting. Couple all of this great momentum with home loan rates just .50% above the best levels ever, and you have a Goldilocks housing scenario for the foreseeable future.

If you are thinking about refinancing an existing property or purchasing, now is an amazing time.

06/07/2019

“Let the good times roll” – Good Times Roll by The Cars

For the sixth consecutive week home loan rates declined, once again fueled by the ongoing trade tensions between the US and China.

However, the decline in rates was halted on the notion the Fed is likely to CUT rates soon. Huh? That’s right – a couple of Federal Reserve members were speaking this week and suggested that the time might be right for a Fed rate cut.

How come home loan rates didn’t improve further upon news? When the Fed cuts or lowers rates, they can only lower the Fed Funds Rate, which is an overnight lending rate between banks. The Fed doesn’t control home loan rates.

When the Fed cuts rates it is doing so to fuel economic growth and/or allow inflation to rise – both of these are bad for long-term rates like home loan rates. Additionally, Stocks love Fed rate cuts and moved nicely higher midweek, taking money out of Bonds thereby limiting their decline in yield or rates.

The ongoing trade tensions and slowing growth around the globe may very well continue to push home loan rates lower in the weeks and months ahead – but we must now pay attention to the Fed who will look to “help” the Stock market from further declines by cutting rates. And anything that helps Stocks is usually not great for home loan rates.

Bottom line – we are staring at 2-year lows in home loan rates and the time could not be much better to lock in on a purchase or refinance loan.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

05/10/2019

Americans Favor Owning Versus Renting a Home

The Census Bureau recently reported a homeownership rate of 64.2% in the first quarter of 2019, up from the 10-year low of 63.7% in the first quarter of 2015.

A recent study by LendingTree shows that 67% of homeowners surveyed aged 22 and older believe that owning a home is a better option that renting. In addition, the longer you remain in a home, the stronger you believe that owning is better than renting. The survey revealed that 72% of homeowners who have resided in their home for seven to nine years agree with the statement.

The survey also showed that about 15% of homeowners believe renting is easier than owning a home, and another 18% are neutral on the topic. “Just 13% of homeowners across all ages wish they could go back to renting, but when broken down by age, 1 out of every 5 homeowners ages 22 to 37 say they miss renting.”

In conclusion, the US “Goldilocks” economy includes:

Slowing home price gains
Rising wages
Uptick in homes for sale
Strong job market
High Consumer Confidence
Historically low rates
The above points will continue to be a tailwind for new home buyers on their way to the American Dream of owning a home.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

04/26/2019

Good news is typically bad news for Bonds and home loan rates. That has not been the trend of late, and certainly not this past week.

Durable Goods Orders is a report which shows buying demand for products with a life cycle beyond 4 years – think cars, washing machines and planes. And that buying demand of long-lasting goods is up at the highest levels since last summer, highlighting that the US economy continues to grow, and consumers and businesses feel confident in investing.

Adding to the good-news week were continued strong corporate earnings reports, and future guidance from the likes of Amazon, Microsoft and Facebook.

Finally, the first look at 1st quarter GDP showed the US economy grew at a blistering 3.2% pace – way above economists’ expectations of 1.9%. The US economy is reaccelerating.

In the face of all the good news, home loan rates held steady and remain near one-year lows.

Bottom line: when you consider the strong labor market, rising wages, growing economy, low inflation, high consumer confidence, and low rates – it truly is a Goldilocks situation in the economy and for anyone looking to buy a home.

04/19/2019

The economic data coming out of the US this week showed that not only is a recession highly unlikely anytime soon, but the economy is actually reaccelerating from the slowdown seen last Fall.

Back in October and November, the Fed was very hawkish and suggested that three rate hikes would come in 2019. This caused angst and fear that economic conditions would slow to a recession. It also led to a sharp decline in Stocks and consumer confidence.

Fast forward just a couple months to January 2019, and the Fed completely reversed their position, and signaled there is no rate hike coming in 2019 or anytime soon. This new “wait and see” position from the Fed has set off a rally in Stocks and a surge in consumer confidence.

It has also sparked confidence and certainty in the business climate, thereby giving corporations reason to hire and retain employees.

And that was clearly evident this week as we saw yet another decline in Initial Jobless (Unemployment) Claims and the rate at which people are being fired from their jobs.

Bottom line: the economic resurgence has put upward pressure on rates this past week, but they remain near 12-month lows.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

04/12/2019

Initial Jobless Claims is a weekly report that tracks how many people have filed for unemployment benefits. It is both a solid gauge on the state of the labor market and economy, and a leading indicator on what to expect in the months ahead. So, what are Initial Jobless Claims telling us today? Last week’s 196,000 recorded was the lowest in over 50 years! This is what it’s telling us:

The labor market continues to strengthen.
The chance of a recession in 2019 is near zero.
Low Initial Jobless Claims also leads to continued higher wage gains, which is wonderful for consumer spending and housing.

Another great data point this past week was the JOLTS (Job Openings and Labor Turnover Survey) which showed the US economy still has a 1,000,000-person shortfall against the current 7,000,000 job openings. This is just another example of how tight the labor market remains.

Bottom line – the great story remains – low rates + great job market = nice housing market.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

04/05/2019

Spring is the peak home buying season for many parts of the country. After years of softer home sale activity – thanks to low housing inventory, affordability issues, and more – this Spring home buying season could prove to be one of the best in years. Why?

Call it the “Goldilocks” economic scenario – and here are several bullets that should help housing not just this Spring, but for the foreseeable future:

The Fed has stated they will not raise rates in 2019. Yay!!! There is actually a better chance of a rate cut before 2019 comes to an end. This means home loan rates won’t go too high.
Inflation remains subdued – for now. Low inflation means lower rates.
Home price gains are slowing year-over-year to healthier levels, and at equilibrium with personal wage gains. In years past, housing prices were gaining 10% to 15% or more, and wages were growing at 2%. Now we are seeing house prices increase 4% to 5% year-over-year, just slightly more than wages.
Housing inventory is increasing. This is a big change from years past and should it continue, buyers will continue to come to the market and take advantage of the “Goldilocks” conditions.
The Labor market remains solid. People buy homes because they feel good about their job and their future. Unemployment is at a 50-year low. This is very positive for housing.
Europe can’t get out of their own way. Their economies are weak and that is keeping their bonds yields ultra-low. This is putting downward pressure on US Bond yields. Yes – you can thank Europeans for your low home loan rates.
The Stock market is right at all-time highs. This means higher 401K and IRA values create a positive wealth effect that should provide a nice tailwind for housing. People with money spend it.
Consumer Confidence and Sentiment are increasing again thanks to the Fed no longer hiking rates, the strong job market, and Stocks up nicely in 2019. “Confident” consumers purchase homes.
No fear of a US recession as Friday’s March Jobs Report showed 196,000 new jobs created, a great rebound higher from February’s 33,000 – which had stoked some recession chatter.

03/29/2019

“It’s getting better all the time” – Getting Better by The Beatles

That is the best way to describe the current home loan rate environment. This past week we saw mortgage rates experience their largest one-week decline in 10 years!!!

What caused the sharp decline in home loan rates? Recessionary fears, and the likelihood the Fed’s next move on rates may be a cut and as soon as this year.

The Treasury’s Two-Month Bill yielded 2.40% this past week and the 10-Year Note yielded a low of 2.34%. This “inverted yield curve”, where short-term Bonds yield more than long-term Bonds, elevated the recession talk.

Bond yield curve inversions are not always accurate, and the lead time to a recession can be as much as three years.

It will be more important to track how the 2-Year Note, presently yielding 2.23%, performs against the 10-Year Note in the weeks and months ahead, because a sustained inversion between them would be a more serious recessionary signal.

The financial markets were spooked this week when potential Federal Reserve Board Nominee Stephen Moore said if he were brought onto the Fed, he would immediately vote for a .50% cut to the Fed Funds Rate. This surprise statement brought uncertainty to the financial markets, which led to Stocks moving lower and Bonds moving higher in price.

Bottom line: Inflation is not a threat, and was evidenced in last Friday’s PCE reading of just 1.8% year-over-year. Plus, the idea that the Fed may now cut rates next means this complacent “wait and see” attitude may continue to keep home loan rates at low levels for the spring home buying season, and more.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

3/15/2019

Volatility has disappeared in the financial markets and a sense of calm and complacency has emerged. Why?

Well thanks to the Fed, and inflation and higher rates not being a threat — both Stocks and Bond prices are moving higher.

For 2019, home loan rates have been stable at one-year lows (look at the chart below), and everyone’s stock portfolio is increasing in value. What’s not to like?

Complacency will change to volatility at some point, and what we are watching is rising wages and how that may increase inflation in months to come.

Should that happen, we could experience a real shock to the US Bond market and the present complacent interest rate market will be over — and in a hurry.

But for now, complacency is the theme as we head into the Spring housing market…meaning good times for us.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

03/08/2019

“It’s a small world after all”

If inflation moves lower or is expected to move lower — rates must go lower as well. That’s the situation right now.

The financial markets and interest rates also follow inflation on a global scale. Why is this important to homeowners?

If disinflation or the rate of inflation moderates in places like Europe, interest rates in those countries move lower and tend to drag US interest rates lower as well.

This past week we watched home loan rates revisit one-year lows upon news that the European Central Bank or ECB downgraded their economic outlook and inflation expectations.

The ECB said they now expect 2019 economic growth to come in at a paltry 1.1%, down sharply from a previous forecast of 1.7%. Moreover, ECB officials said inflation, which is already very low, could move lower still.

Again, if inflation moves lower in large countries around the globe — we tend to see improvement in long-term US interest rates…that is the current trend.

Interest rates don’t buy houses, jobs do!

The Bureau of Labor Statistics reported that just 20,000 jobs were created in February, well below expectations of 175,000. This was a disappointing number, but the unemployment rate fell to 3.8% and wages grew by 3.4% year over year…the highest level in a decade. Overall the labor market continues to expand and wages are rising — all good news for housing.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help

03/01/2019

 This past week, the Bureau of Economic Analysis (BEA) reported the U.S. economy, as defined by Gross Domestic Product (GDP), grew at a 2.6% rate in the fourth quarter of 2018. Economists and the markets were expecting 2.0% to 2.3%, so this was a nice upside surprise.

This left GDP for all of 2018 at 2.9%. Consumer spending, which makes up nearly two-thirds of GDP, expanded by a solid 2.8% in the fourth quarter – yet slower than the previous quarter.

Another solid number within the report was a business investment which grew at a swift 6.2% pace.

This Q4 GDP reading was the first of three – so we will see some revisions in the months ahead.

Seeing the economy grow at such a nice clip despite high stock market volatility and the U.S. government shutdown is a good sign as we head into the spring housing market.

The increased wealth effect caused by the recent rally in Stocks along with one-year lows on home loan rates, rising wages and increased housing inventory sets the stage for an improved 2019 housing market.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

01/23/2019

Compare CALHFA and Conventional below or download the PDF Flyers.

First-Time-Homebuyers-flyer-for-1700-N-Lynne-Drive-25-Santa-Maria-Ca-93454-CALHFA Download

Financing CONV FHA REG Notes
CalHFA Con CalHFA FHA Sales Price $254,900 $254,900

% Down 3.00% 3.50%

First Loan $247,253 $250,282

Term 30 Years 30 Years

Rate 5.500% 5.250%

APR* 6.276% 6.761%

2nd Loan $16,338 $16,429

Term 30 Years 30 Years

Rate 0.000% 0.000%

APR* 0.000% 0.000%

CASH TO CLOSE

Down Payment $7,647 $8,922

Closing Costs $8,404 $8,297

Prepaids/Impounds $2,652 $2,633

Amt Paid by 2nd Ln -$16,338 -$16,429

Total $ Required $2,365 $3,423

HOUSING EXPENSE

First Loan P & I $1,404 $1,382

Taxes, Ins & MI $377 $471

2nd Loan $0 $0

Homeowners Assoc. $334 $334

Total Monthly Pmt $2,115 $2,187

*APR = Annual Percentage Rate

First-Time-Homebuyers-flyer-for-1700-N-Lynne-Drive-25-Santa-Maria-Ca-93454-Conventional-Loan Download

Financing CONV

Notes Guild 321

Sales Price $254,900

% Down 3.00%

First Loan $247,253

Term 30 Years

Rate 4.750%

APR* 5.361%

CASH TO CLOSE

Down Payment $7,647

Closing Costs $3,311

Prepaids/Impounds $1,815

2nd Loan and Grant -$1,500

Total $ Required $11,273

HOUSING EXPENSE

First Loan P & I $1,290

Taxes, Ins & MI $389

Homeowners Assoc. $334

Total Monthly Pmt $2,013

*APR = Annual Percentage Rate