Operation- Finding Affordable Housing
Maltese Mortgage Group with Supreme Lending will be working on a 6-month initiative to go through every condo development in Clark County (an estimated 500) in hopes of getting as many developments approved for Conventional financing as possible. All conventional approved condo lists are not created equal. While FHA and VA condo approved lists are universal throughout all mortgage companies, Conventional does not have a universal list. The list of approved condos through Supreme Lending will be the most comprehensive approval list in Southern Nevada. We will be submitting 5-10 condo approval packages to our condo approval department per week. This week we will be prioritizing the list of 500. If you have suggestions of condo developments you would like to see get approved first, please submit the name of the development and we will move it to the top of our list 12.
The Dow Jones finished the week up 94 points, closing at 21,414, off the heels of the highly anticipated June jobs report which obliterated forecasts. The reported indicated that the US economy added over 220,000 jobs, over 40,000 more than forecasted by ADP payroll reporting. The number of jobs created is just one of many statistics that analysts are interested in. Average number of hours worked ticked up to 34.5 hours per week. The only disappointing segment of the jobs report was wage growth. A Benign .2% increase in wage growth from May 2017, up roughly 2.4%.
Meanwhile, in the US Bond market, and in particular the Fannie Mae 3.5 coupon, the sell-off continues as investors even in the face of escalating tensions in North Korea. The instrument was trading at around 103.3 as recently as June 27th, is now trading about 100 bps lower in just 8 trading sessions. This move translates into a roughly .25% higher interest rate…100 “bps” is equivalent to “1 point”, so in terms of costs to the home buyer it translates into 1% of the loan amount. If a 30-year fixed rate mortgage was 4.125% with 0 pts on a $250,000 mortgage on June 27th…well 8 days later the home buyer has to pay $2500 to get the same rate.
As I have done in the past I will continue to remind business partners and home buyers the history of mortgage rates to offer perspective. Whaaaat?!?!, rates went from 4.25 to 4.375…Tell that to home buyers in 1983…My favorite graph to show clients to offer perspective (see below)…Over 90% of my clients locked in their mortgage rate the day the contracted was accepted so far this year.
Southern Nevada Real Estate Related Data
June home sales data was released at the end of the week and it’s more of the same with a silver lining that inventory actually increased for the first month in quite some time. The median sales price of single family residences has heated up to $257,373, up nearly 3% from May…from MAY…Annualized over a year and that would translate into a 36% increase in home prices. I am all about good sequels, Rocky was great, Toy Story phenomenal…I don’t care to see what we saw 10 years ago though for Las Vegas real estate. Let’s hope inventory numbers continue to climb to even out the playing field between buyer and seller.
Here is a link to Freddie Mac’s forecasting for home sales, mortgage rates and other interesting data. This is a national outlook, but Las Vegas isn’t that indifferent than what the rest of the country is experiencing.