Napa Mortgage News

The Debate, The Pumpkin Patch & Trumps Golf Course

January 30th, 2017 4:28 PM by Dale DiGennaro

It's the great pumpkin...

Dear Gena,

As pumpkins pop up on front porches across the nation, the highest interest rates over the month are scaring consumers away from the mortgage market. Could it be just a brief adjustment due to the upcoming debate and near future election...or is this going to be a continued change in the housing market?

Dinner in the pumpkin patch

According to CNBC...Total mortgage application volume fell 6 percent on a seasonally adjusted basis for the week ended Oct. 7, compared to the previous weeks! (This is data compiled from The Mortgage Bankers Association.)

Applications to refinance a home loan are highly rate-sensitive, so have been falling for weeks, and took another 8 percent dive last week...even seasonally adjusted.

Applications for loans to purchase a home...fell a smaller 3 percent for the week and are 27 percent higher than one year ago.

The Federal Housing Administration (FHA) share of total applications increased to 10.9 percent from 10.0 percent the week before, which may indicate more first-time buyers entering the market. FHA loans require just 3.5 percent down payments. Keep in mind...we now also have other conventional programs to assist with first time homebuyers down payment as low as 1%!

"As incoming economic data reassured investors regarding

U.S. growth, and financial markets returned to viewing a December Fed hike as increasingly likely, mortgage rates

rose to their highest level in a month last week," said

Michael Fratantoni, chief economist at the MBA. "Total

and refinance application volume dropped to their lowest

levels since June as a result."

The drop in mortgage application volume shows how sensitive today's buyers and borrowers are to the slightest rate moves. Interest rates are still low by historical standards. Home prices, however, are accelerating again, and that squeezes the margin for borrowers. New listings are also not coming on the market fast enough to meet the pent-up demand for housing.

Interest rates continued to rise this week, as volatility ruled and roiled financial markets. From an increasingly divided Fed to an unprecedented political situation, investors are increasingly nervous. Later Wednesday, the release of the minutes of the latest Fed meeting, where three governors dissented, will undoubtedly move rates decidedly in one direction or another yet again.

I hope this information can give you a bit of guidance for your individual situations, as to whether now is the right time for you to refinance or purchase. If you have any questions....please feel free to call or email us anytime.


	Attended the "Foodshare" fundraising dinner at the McGrath home & pumpkin patch in Ventura. "TOTALLY LOCAL VC!"

Retail Sales Rebound

After an increase in mortgage rates last week, this week saw

little net change in rates. There were no surprises in the Fed minutes or from other central banks. The major economic data mostly matched expectations and had little impact.

The minutes from the September 17 Fed meeting released on Wednesday revealed little new information. The minutes reflected the split among Fed officials about the appropriate timing to raise the federal funds rate. According to the minutes, some officials were ready to hike rates "relatively soon," while others preferred to wait for "more convincing evidence" that inflation was rising to the Fed's target level of 2%. The minutes caused little movement in mortgage rates.

The most significant economic data released over the past week was the retail sales report. After two months of declines, retail sales rebounded nicely in September. Excluding the volatile auto component, retail sales increased 0.5% from August, matching the consensus. Consumer spending accounts for about 70% of U.S. economic activity, and the retail sales data is a key indicator.

The latest data on weekly jobless claims also was encouraging. The number of people applying for unemployment benefits matched the lowest level since 1973. While the pace of new hiring has slowed a little from elevated levels over the summer, the jobless claims data suggests that employers are trying to retain their existing workers. As the labor market tightens, employers typically become more reluctant to lay off workers. In the past, this generally has resulted in larger wage gains.

Looking ahead, the next European Central Bank (ECB) meeting will take place on Thursday. Any guidance on future monetary policy could have an impact on global markets. In the U.S., Industrial Production will be released on Monday. The Consumer Price Index (CPI), a widely followed monthly inflation report, will come out on Tuesday. CPI looks at the price change for goods and services which are sold to consumers. Housing Starts will be released on Wednesday, and Existing Home Sales will come out on Thursday.


	Trump National Golf Course in Rancho Palos Verdes. While viewing neighborhoods in SoCal....we just had to see what was happenin' here!


Gearing up for Wednesdays debate!

"Thank you for always trusting in us to do the best for you and your family and please feel free to call me anytime with your questions. I will be happy to share with you whatever information you may need!"