Changes to Credit Scoring Good for #Housing, #Mortgage Industries & #Homebuyers

Posted on in Economy, Housing, Mortgages, TV Appearances
Changes to Credit Scoring Good for Housing, Mortgage Industries & Homebuyers

Collingwood Group Chairman Tim Rood talked about this and more on Fox Business’ “Mornings with Maria.”


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Millennial Majority
New detailed estimates show the nation’s median age — the age where half of the population is younger and the other half older — rose from 35.3 years on April 1, 2000, to 37.9 years on July 1, 2016.

“The baby-boom generation is largely responsible for this trend,” said Peter Borsella, a demographer in the Population Division. “Baby boomers began turning 65 in 2011 and will continue to do so for many years to come.”

When it comes to saving money, a lot of millennials are falling short: The majority of young people have less than $1,000 in their savings accounts, and a significant number have nothing at all.

Perhaps their spending habits could explain their lack of savings.

According to a new report from Charles Schwab, millennials spend more than other generations on comforts and conveniences like taxis, pricey coffee and dining out.

Sixty percent of millennials admit to spending more than $4 on coffee, 79 percent will splurge to eat at the hot restaurant in town and 69 percent buy clothes they don’t necessarily need.

The numbers are much lower in these categories for older generations. For instance, more than half of millennials shell out money for taxis and Ubers, compared to 29 percent of Gen Xers and 15 percent of boomers.

read more: CalculatedMortgage

McMansions Are Back
McMansions are back: The huge American homes that drove the sub-prime mortgage crisis and 2007-2008 financial crash are back and behind another housing bubble.

“Housing inflation is back, big time,” according to Chris Rupkey, Managing Director Chief Financial Economist at MUFG Union Bank in a note to investors last week.

“Home price appreciation,” he wrote, “is certainly as rapid as it was during the housing bubble years and just as worrisome.”

It’s been a decade-long hiatus, but the price of McMansions  is nearly what it was before the crash, and has grown rapidly this year.

The defining feature of a  McMansion is that it is bigger than 3,000 square feet and characterized by large foyers with chandeliers that give the impression of wealth, but are made with cheap materials.

They sprawl over large lots in countless American suburbs: A quarter of homes built in the U.S. since the 1980s  fit this category.

On the eve of the financial crisis, super-sized McMansions were the norm: reaching an average size of 7,000 square feet. The homes became symbolic of the overheated U.S. housing market that led to the Great Recession and could lead back there once again.

The recent rise in the prices they fetch is not good news, say economists and researchers.

“The collapse of housing prices helped make the Great Recession great,” Rupkey said, urging America’s Federal Reserve central bank to rethink keeping the low interest rates that allow people to opt for a McMansion.

The financial crisis originally hit after investors packed together risky mortgages into sophisticated financial investment instruments that looked good on paper. Banks were over-leveraged on these investments. When people couldn’t pay back their mortgages, the house of cards collapsed and the global economy nose-dived.

Home-builders are now putting up a lot of large single family homes in America, with 794,000 going up in May. According to data from the real estate price tracking website Zillow, the price of McMansions has increased rapidly in the past year.
read more: Newsweek

All About Jobs
In just a couple of hours (8:30 a.m. ET) we get the most important economic data of the month: the Jobs Report (a.k.a.: Nonfarm Payrolls).

Not only will we know how many jobs were created in June, but the most important part of the report will be how much wages grew last month. Wage growth not only indicates whether workers are making more money, but also if inflation in the U.S. is picking up.

Inflation is a key component used by the Federal Reserve to determine its course of monetary policy.

The economy is expected to have added 176,500 jobs in June, according to economists surveyed by FactSet. Roughly 138,000 jobs were added to the U.S. economy in May. The unemployment rate is anticipated to have held at 4.3%, while hourly earnings are expected to increase 0.3% month on month.

Residential Data Hold Down Construction Spending
Construction spending was essentially flat in May when compared to April.  The U.S. Census Bureau says there were seasonally adjusted annualized expenditures of $1.23 trillion during the month on all types of construction.

The revised estimate for April was $1.23 trillion as well, but that resulted from a revision of the original sharp decline in spending reported for March, 1.4 percent, to -0.7 percent. On a year-over-year basis total spending was up 4.5 percent.

Analysts polled by Econoday had expected an increase of 0.5 percent. Estimates ranged from no change to a positive 0.9 percent.

On a non-seasonally adjusted basis, total spending in May was $103.16 billion compared to $99.506 in April. For the first five months of 2017 the Bureau estimates spending at $469.2 billion, up 6.1 percent from expenditures at the same point in 2016.

Private spending overall was at a seasonally adjusted annual rate of $943.2 billion, a -0.6 percent change from April’s estimate of $949.3 billion, but up 6.2 percent compared to the previous May. On a non-adjusted basis, private spending totaled $80.87 billion compared to $78.20 billion in April. Year to date spending is 9.0 percent higher than a year earlier.

Private spending on residential construction fared little better than the overall numbers in May. On a seasonally adjusted basis, expenditures were $509.62 billion, a decrease of 0.6 percent month-over-month from $512.34 billion. Spending was substantially higher than last May, an increase of 11.2 percent. Most of the monthly decline was attributed to multi-family construction, which fell by 3.3 percent (but remained 3.0 percent higher than in May 2016), while single-family construction fell by 0.3 percent. It too remained strong compared to last year, up 7.9 percent.

Best Places to Buy a Vacation Home
Crossville, Tennessee, the best place to buy a vacation home?  Yep!

A new report from ATTOM Data Solutions shows just that.

The study considers the best combinations of good air quality, comfortable summertime temperatures, low crime and appreciating home values but with still-reasonably priced homes. ATTOM ranked a total of 100 U.S. cities.

The top 10 summer vacation home bargain markets were located in four states: Tennessee, North Carolina, Florida and Maryland, and all have median home values below $275,000.

Here are the top five markets for vacation rentals, and their Summer Vacation Home Market Index ranking:

  • 5. Weaverville, North Carolina – 53.43
  • 4. Asheville, North Carolina – 53.75
  • 3. Port Charlotte, Florida – 54.24
  • 2. Waynesville, North Carolina – 55.96
  • 1. Crossville, Tennessee – 58.06

Have a prosperous day ahead and a great weekend.


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