Your Economic Update and Mortgage Minute 8/26/2020

Your Economic Update and Mortgage Minute 8/26/2020:

Federal Reserve continues to come up with ways to stabilize the markets and interest rates. Federal Reserve continue to buy mortgage back securities (about 4.2 Billion Daily).

The stock market continues to increase this week (specially NASDAQ) – concerns the health pandemic is taking a back seat to earning and possibility of vaccine.

FHFA – who controls Fannie Mae and Freddie Mac on August 12^th decided to attach a .50 point tax for all refinance transactions effective immediately. Lenders will pass this extra cost to the consumer through higher fees or higher interest rates.   Banks, Mortgage Bankers, and Mortgage Brokers are going to congress to get this reversed. 

Initial Jobless claims report improved this week. For the first time in 27 weeks we are below 1 million claims.  Good news for the economy.

Unemployment report dropped from 11.2% to 10.1% in July.

New Mortgage Applications – Purchase and Refinance applications were down this week as interest rates started to rise.

The CPI and PPI reports showed inflation starting to increase – which usually means interest rates will also rise.

Home Appreciation for the first six months of 2020 is around 4.9% nationwide. Price of homes are not coming down due to the lack of good inventory.

Congress has stalled this week in reaching an agreement for the next stimulus package – President Trump signed executive orders to unfreeze dollars to help consumers during this health pandemic.

First Quarter GDP was down -5% / Just received Second Quarter GDP and it was down -32.9% Lowest in US history. Hopefully the 3^rd and 4^th quarters will come back.

Bidding wars are continuing to heat up with low rates and limited inventory. 60% of agents surveyed said bidding wars are on the rise, as reported in REALTOR Magazine.

New Guidelines from Fannie Mae and Freddie Mac – regarding self employed borrowers. Lenders will require a Profit and Loss for the current year and will also review the borrower’s assets and cash flow to justify that profit and loss statement.

Current Interest Rates:

08/14/20 –Interest rates went up this week due to inflation reports, but still great rates!

(Based on a 740 FICO / Purchase / 20% down / Single Family / 0 Points) *

If you have any questions or need anything, give us a call!