The stronger than expected jobs report released on Friday re-fueled the speculation This Week in Real Estate that the Feds will raise interest rates during their December session. Below are a few of the highlights from the first week in November that influence our business:
* October Jobs Surge Past Expectations. October job creation surged to 271,000, crushing expectations of 190,000 and even top-end forecasts for 240,000, the Bureau of Labor Statistics said. Job gains surged past analysts’ expectations, while the unemployment rate dropped. Meanwhile, year-over-year wage growth hit its highest mark since mid-2009. Barring catastrophe, everything looks set for the Fed to raise rates in December. “It’s hard to find flaws in today’s October jobs report,” said Doug Duncan, chief economist with Fannie Mae. Duncan also added that Friday’s report serves to fuel market expectations that a rate hike this year is very likely. A rate hike in December became a likely possibility when Fed Chair Janet Yellen formalized the possibility of a rate hike in December, telling the House Financial Services Committee that December’s meeting is a “live possibility” for a rate increase. Full Story… http://www.housingwire.com/articles/35549-october-jobs-surge-past-expectations
* Q3 2015 Home Sellers Realize Average Price Gain of 17 Percent From Purchase Price, Highest in 8 Years.
Homeowners who sold during the third quarter realized an average price gain of $40,658 (17%) from the purchase price of their property, the highest average price gain for home sellers since the third quarter of 2007, according to RealyTrac’s Q3 2015 Home Sales Report. The report also shows home sellers in the third quarter on average had owned their home for 6.72 years when they sold. The report also shows 2,487,664 existing single family and condo sales through the first three quarters of 2015, the highest level for the first nine months of a year since 2006 – a nine year high. Full Story… http://www.realtytrac.com/news/home-prices-and-sales/q3-september-2015-home-sales-report/
* Fannie: REO Inventory Declined in Q3, Down 34% Year-Over-Year. The continued decrease in the number of our seriously delinquent single-family loans resulted in a reduction in the number of REO acquisitions in the first nine months of 2015 as compared with the first nine months of 2014. REO inventory decreased in Q3 for both Fannie and Freddie, and combined inventory is down 35% year-over-year. For Freddie, this is the lowest level of REO since Q4 2007. For Fannie, this is the lowest level since Q2 2008. Short term delinquencies are at normal levels, but there are still a number of properties in the foreclosure process with long time lines in judicial foreclosure states.
Full Story… http://www.calculatedriskblog.com/2015/11/fannie-reo-inventory-declined-in-q3.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29
* Homebuyers Are Hitting Record Credit Scores. New mortgages for purchasing homes are churning out at a fast clip, with the borrowers getting those loans having some of the highest credit scores ever. Because credit is favoring a smaller segment of borrowers, the result is that loan performance is arguably the best in history. As cash-heavy investors move out, mortgage-dependent borrowers are moving in. High-credit borrowers, those with FICO scores above 700, are almost entirely behind the surge in purchase applications. Just 20 percent of purchase originations over the past three months have come from borrowers with credit scores below 700, the lowest level in more than a decade. This as the average credit score for purchase mortgages hit a record high of about 755. The median credit score in the U.S. is about 720 according to FICO, and the average score is 695. Full Story… http://www.cnbc.com/2015/11/02/homebuyers-are-hitting-record-credit-scores.html
Have a productive week!