Ugly But Honest Real Estate News 8-10-2017
Discussing the number of homes with positive equity and what it means for home owners, several reports on economic confidence, foreclosures decreasing and much more!
Almost 94% of Home Owners Have Positive Equity
According to the latest CoreLogic Equity Report, the number of residential properties that have positive equity increased in the first quarter of 2017. When a home has positive equity it means it is worth more than is owed on the mortgage.
If home prices increase another 5% this year, it will mean another 600,000 homes will recover equity that was lost after the housing market went haywire. Will homes increase in value 5% this year?
Hard to say for sure but we do know that prices have been climbing like crazy…
Check out the map below that shows the portion of properties with a mortgage which have positive equity:
As you can see, CoreLogic is reporting that 95.2% of homes in South Carolina have positive equity.
Frank Martell, President & CEO of CoreLogic, thinks this is great news for the “long-term health of the U.S. economy.” He said:
Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.
I must agree with Martell and would add that this means that more home owners can either refinance OR sell their home. Just a few years ago, some home owners were trapped because they owed more than their home was worth.
Here is another map that shows the proportion of properties with a mortgage that have significant equity:
Looking at that map, we see that 78.8% of home owners have significant equity (more than 20%). Which means these people can sell or refinance!
Maybe you are wondering about the current market value of your home…
Maybe you would like to sell so you could down size or upgrade to a larger home?
If you are unsure of how much equity you have in a home in the Anderson SC area, shoot me an email!
Americans’ Economic Confidence Improves
Americans’ confidence in the economy jumped five points last week, with Gallup’s U.S. Economic Confidence Index averaging +7 for the week ending Aug. 6. The latest weekly index score is the highest since mid-April. This bump in economic confidence, recorded mostly before Friday’s positive jobs report, comes as the Dow Jones industrial average surpassed the 22,000 milestone.
Americans Fear Stock Market Could Collapse
The Dow Jones Index has been enjoying record highs since Donald Trump was elected president, but most Americans remain on edge that the stock market could collapse again.
Include me in the group that fears the stock market could collapse. Seems a tad bit overheated…
Small Business Optimism Regains Momentum in July
The Index of Small Business Optimism rose 1.6 points to 105.2, preserving the surge in optimism that started the day after the election. Seven of the 10 Index components posted a gain, two declined, and one was unchanged. Since the recession, the Index peaked at 105.9 in January, just 0.7 points above the July reading.
Main Street was buoyed by stronger customer demand despite the dysfunction in Washington, D.C. The economy (GDP) grew about 2 percent in the first half of the year, nothing special, but the second quarter was much stronger than the first, and consumer spending was a major contributor to growth. The stock market continues to post record high readings, although a bit inconsistent with moderate growth in output from the nation’s business sector.
Good news but notice what they said about the stock market?
More Americans Working More Than One Job to Make Ends Meet
From Business Insider:
A spike in the number of Americans taking multiple jobs has effectively reversed a two-decade-long decline. How healthy is the US job market, really?
This remains a major question among economists and Federal Reserve officials, many of whom believe a historically low 4.3% jobless rate means the US economy is at, or near, what experts call “full employment.”
One trend could be especially ominous: a spike in the number of Americans taking multiple jobs that has effectively reversed a decade-long* decline.
The Labor Department reports that 7.6 million workers held multiple jobs last month, up 2% from 7.4 million in July 2016. That’s back to highs not seen in 20 years. And it should not be mistaken as a sign of healthy entrepreneurship.
The really sad thing is that too many people simply don’t care enough about their fellow Americans to be concerned about stuff like this.
Or they think that these people somehow deserve a tough life because they are lazy/stupid or not living their life in the “right” way.
Consumer Comfort Reaches 16-Year High on U.S. Economic Optimism
Americans last week registered their strongest optimism in 16 years on more upbeat views about the state of the economy, their personal finances and the buying atmosphere, according to Bloomberg Consumer Comfort data released Thursday.
Consumers had reason to feel upbeat last week with stocks again reaching all-time highs and as Friday’s report on July employment confirmed the strong labor market remains intact. Record-high job vacancies help explain why lower-income Americans and the unemployed are more positive about their prospects. The latter group hasn’t been this optimistic since before the last recession. While the robust job market is offsetting the disappointment tied to lack of progress in Washington on health care and tax reform, geopolitical tensions related to North Korea represent a risk to consumer optimism.
Positive news and right now my biggest worry is North Korea and how Trump handles or reacts to the situation.
Speak softly and carry a big stick…
Foreclosure Rate Nearing Pre-Crisis Level
In May 2017, 4.5 percent of home mortgages were in some stage of delinquency, down from 5.3 percent a year earlier and the lowest for any May since 2006, when it was 4.2 percent, according to the latest CoreLogic Loan Performance Insights Report. The measure includes all home loans 30 days or more past due, including those in foreclosure.
The foreclosure inventory rate, meaning the share of mortgages in some stage of the foreclosure process, was 0.7 percent, down from 1 percent a year earlier. Before the foreclosure crisis began in mid-2007, the foreclosure inventory rate averaged 0.6 percent.
Great news! While this is a national statistic, I can assure you we are seeing much lower levels of foreclosures in the Anderson SC area.
While fewer foreclosures could mean some people think there aren’t any good deals, this simply isn’t true.
Just because a property is a foreclosure doesn’t mean it is a good deal.
And just because a property is cheap does not mean it is a good deal…
Homeowners and Appraisers Don’t See Eye-to-Eye on Home Values
From Quicken Loans:
Homeowners across the country continue to view their property value higher than appraisers’ opinions. In July, the average spread between an owner’s estimate and the appraised value was 1.55 percent according to Quicken Loans’ National Home Price Perception Index (HPPI).
Even with the varying opinions there has been a clear trend, with home values on the rise across the country. The Quicken Loans National Home Value Index (HVI) reported that appraised values increased an average of 0.33 percent from June to July. The growth is even stronger on a year-over-year basis, with home values rising 4.21 percent nationally from July 2016’s findings.
Sellers must remember that it isn’t what they think their home is worth…
It’s what buyers, their agent and the appraiser think that matters more!
Monopoly, Power and the Decline of Small Business
From Boing Boing:
In the 15 years between 1997 and 2012: 72,000 small US manufacturers shut down; as did 108,000 local retailers and 13,000 community banks (fully half of America’s complement of small banks!). The number of US startups has dropped by 50% since 1970. These statistics are not the result of the changing times: they’re due to massive, monopolistic corporations stacking the deck against small competitors through unfair and corrupt practices, to the detriment of American growth, equality and democracy.
Sadly, some are too brainwashed by the propaganda of big business and their political minions to see the truth…
Small businesses, especially the local ones, are are so very important to the economic health of America.
Don;t get me wrong because the Dow breaking records is nice…
But seeing ALL honest, hard working, tax paying Americans enjoying a high quality of life is more important IMHO.
PHH Agrees to Pay Over $74 Million to Resolve Claims of Mortgage Lending Shenanigans
From Department of Justice:
PHH Corp. PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration, guaranteed by the United States Department of Veterans Affairs, and purchased by the Fannie Mae and Freddie Mac that did not meet applicable requirements.
Good but another case resolved with no one going to jail…
Well that's all I have time for today. Be sure to check back ASAP as I ran out of time but not stuff to write about...