Thank you sincerely for trusting me with your clients financing needs. Our goal is to help 250 families this year and most importantly continue to improve on our customer service. Cheers to a great 2017!
The Dow Jones topped 20,000 this past week, which is widely considered a monumental break through. The latest move marks a nearly 20% increase in stocks in the past year. The highly aggressive plan to stimulate the economy by the new administration, which consists of a combination of tax cuts and infrastructure spending has investors bullish on stocks.
Mortgage-backed securities, which is housed in the bond market is also responding to these expectations, and we are seeing a steady sell-off of US Bonds. As you can see in the graph below, the price of the Fannie Mae 3.5 coupon, which was trading around 105, is now hovering around 102. The instrument essentially dropped “300 basis points”. Remember that generally speaking, 100 basis points is equivalent to about .25% in interest rate…so mortgage rates, generally speaking are about .75% worse than before the election.
I have mentioned this before. For perspective, see the next graph…Going back to 1963…the only time a 30 year fixed was below 5% was in the late 2000’s…post Great Recession.
My advice for home buyers is…lock as soon as you can. Rates really have only one way to go…and that is UP!
Southern Nevada Real Estate Related Data
With December in the books, the Las Vegas valley saw 41,720 sales for single family residences, condos and townhomes. The median priced single family residence inched up another $2,000 to$235,000. The median priced home factoring in condos and townhomes finished 2016 at $215,000, up nearly 10% from 2015.
New home sales for 2016, support continued improvement, with 7,984 homes closed for the year, up nearly 17% from 2015. That, said, as illustrated in this graph, the number of new home sales for Las Vegas is still significantly down from what would be considered “normal”…No, 2005 was certainly not normal, but late 90’s is probably considered a healthy number of new homes being built per year to match population growth.
Have a great week and check out my Week in Review video blog. Again thanks to my son for Producing!