Posts Tagged ‘economy’

The True Cost of the 12 Days of Christmas in 2017

Posted on December 15, 2017 by Laura Lam

Purchasing the gifts included in the classic holiday song “The 12 Days of Christmas,” will only cost 0.6% more than in 2016, according to the 34th annual holiday economic analysis by The PNC Financial Services Group.  PNC calculated the 2017 price tag for the PNC Christmas Price Index at $34,558.65. That’s just $200 more than last year’s cost and less than the government’s Consumer Price Index, which increased 2.2% through September for the past 12 months. “The U.S. economy is growing at a sustainable pace, fueled by higher consumer confidence, low unemployment, modest wage gains and low interest rates,” said…

Mortgage Fraud Risk Slows; Rises in Hurricane-Impacted States

Posted on December 14, 2017 by Laura Lam

While the nationwide run-up in mortgage loan application defects appears to have slowed, instances of fraud remain on the rise in Texas and Florida.  The First American Loan Application Defect index remained unchanged for the second straight month in October, but is up 22.1% from October 2016.  Defect risk spiked between November 2016, when it hit an all-time low, and June. Loan application defects are indicators for mortgage fraud. “The surge in defect, fraud and misrepresentation risk that started a year ago has finally lost momentum,” said First American’s Chief Economist Mark Fleming.  “The Loan Application Defect Index has either remained…

Mortgage Delinquencies Rise After Hurricanes

Posted on December 12, 2017 by Laura Lam

The three major hurricanes that caused devastation during August and September were largely responsible for the third-quarter increase in mortgage delinquencies.  The seasonally adjusted delinquency rate of 4.88% was 64 basis points higher than the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey. The 30-day delinquency rate was responsible for 50 basis points of that increase, said Marina Walsh, the MBA’s vice president of industry analysis.  Compared with one year ago, delinquencies were 36 basis points higher. “Hurricanes Harvey, Irma and Maria caused disruptions and destruction in numerous states,” Walsh said. “Florida, Texas, neighboring states, as well…

Housing Affordability May Plummet in 2018

Posted on November 21, 2017 by Laura Lam

During the recent CoreLogic and the Urban Institute’s Housing Finance, Affordability and Supply in the Digital Age conference, CoreLogic Chief Economist Frank Nothaft predicted rising interest rates will cause home prices to rise.  Mortgage interest rates are expected to continue rising over the next couple years as experts predict the Federal Reserve will raise the Federal Funds rate in once more this year in December and up to 4 more times in 2018. As the chart shows, CoreLogic forecasted it will rise to 4.7% by December 2018. Nothaft explained as mortgage interest rates increase throughout 2018, less current homeowners will be motivated…

Americans Waiting for a Bigger Raise

Posted on November 17, 2017 by Laura Lam

The government said that average hourly earnings rose 2.4% over the past 12 months.  That’s a slip from the 2.9% increase reported in September. It remains below the 3% to 3.5% range that many agree is normal in a truly healthy economy.  The last time wages were up more than 3% year-over-year was in April 2009, just as the economy was emerging from the depths of the global banking crisis that fueled the Great Recession. Why have wages remained stagnant even though many other indicators of the job market and broader economy look healthy? Unemployment continues to drop. The housing…

Sales to First-Time Home Buyers Fell 34% in 2017

Posted on November 16, 2017 by Laura Lam

First time homebuyers continue to struggle to enter the housing market amidst limited housing inventory, falling to the fourth lowest level since 1981, according to the National Association of Realtors’ 2017 Profile of Home Buyers and Sellers report.  The share of first time homebuyers in the housing market decreased from 35% in 2016 to 34% in 2017. In the 36-year history of NAR’s report, the long-term average of first-time homebuyers rests at 39%. “The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages, which undercut their ability to become homeowners,” stated NAR…

Housing Affordability Still Strong Despite Price Increases

Posted on November 14, 2017 by Laura Lam

Home prices continue to increase, yet affordability actually improved since July, according to the latest Mortgage Monitor report from Black Knight.  As of September, the average homeowner needed 21.4% of their median income to purchase a home. This is actually down from July’s post-recession peak of 21.7% and low by historical standards.  For comparison, an average 24.2% of the median income was required to purchase a home from 1995 to 1999. That increased to 26.2% in the years before the housing boom from 2000 to 2003. Interest rates declined about 40 basis points over the past 6 months, offering the opportunity…

Will Regulation Solve Cybersecurity Problems?

Posted on November 13, 2017 by Laura Lam

Cybersecurity was a main topic at a recent New York banking conference.  According to Arthur Lindo, senior associate director of the Fed’s division of supervision and regulation, more rules may not be the best answer to protecting the financial system.  “I don’t think the solution to the cybersecurity problem rests in regulation,” said Lindo.  “We’re going to try a more flexible approach.” The Fed and other regulators issued a notice of proposed rulemaking on cyber risk management standards last year, which is typically followed by a prospective rule. After the industry and others involved in computer security discouraged regulators from…

Millennials are saving more for retirement

Posted on November 10, 2017 by Laura Lam

In the race to save for retirement, one group is doing surprisingly well: millennial parents.  That’s according to a new NerdWallet survey, which found that 38% of millennial parents (ages 18-34) save more than 15% of their income for retirement. All told, millennial parents reported a median retirement savings rate of 10% of income, compared with 8% for Generation X parents (ages 35-54) and just 5% for baby boomer parents (ages 55+). Given the picture typically painted of this age group, you might be shouting “fake news” right now. There’s one caveat: The results include only those currently saving for…

FHA Loan Delinquency Rate Flattens

Posted on November 09, 2017 by Laura Lam

Closed-end loans continue to return to normal levels as overall consumer delinquencies remained steady and serious delinquency rates remained near the 10-year low.  However Federal Housing Administration loans delinquency rates seem to be slowing down.  FHA loans, popular among first-time home buyers with affordability constraints, have made steady improvements this year but may be reaching a plateau. Loans 90-days delinquent, in foreclosure or involved in bankruptcies remained stable at 4.31% in August. The seasonally adjusted estimate was 5.2% a year ago.  Even though delinquencies have been improving, FHA loans continue to make up a large percentage of the distressed loans…