Tuesday, May 30, 2017

In The News

In the News   Presented by Prairie Title  
May 30, 2017
Housing, Housing, Housing
Naturally, there’s nothing more critical to the real estate economy then the state of the housing market, and the news was positive recently as NAR Chief Economist Lawrence Yun noted on May 18 that the first quarter was the best quarterly existing sales pace in exactly a decade (5.62 million on an annual basis), and he expects activity to mostly stay on track and finish around 5.64 million. That would be the best since 2006 (6.47 million) and 3.5 percent above 2016.
“The housing market has exceeded expectations ever since the election, despite depressed inventory and higher mortgage rates,” said Yun. “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence is giving more households the assurance and ability to purchase a home.”   
There is a cautious note in the Chicago area, though, as Gail MarksJarvis of the Chicago Tribune reported last week that “sales of homes in the Chicago area dropped in April as potential homebuyers looked at houses but then turned away after finding disappointing choices."

Cyber-security, always
Another week, another story of a couple being scammed out of money by a hacker in a real estate transaction. This time, an Ohio couple lost $20,000 when a hacker posed as their title company and gave them fraudulent instructions on where their bank should transfer their downpayment. In this era of growing and changing use of financial technology, we must be diligent at all times about securing our vital transaction information in our systems and through the use of encrypted email. Equally important, we must be certain that our clients know to never follow instructions included in an unencrypted email.

Final thought: I was impressed by a presentation given by HUD Secretary Dr. Ben Carson to an American Land Title Association group recently. Dr. Carson’s remarks were both thoughtful and thought-provoking. Wherever you are on the political spectrum, I urge all of us to give him a chance. We might just be surprised by his capabilities in the housing arena.

What’s your point of view? Call or email me, or write a comment below. Let’s keep the conversation going.

Tuesday, March 14, 2017

Technology and Real Estate

In the News   Presented by Prairie Title  
March 14, 2017
Tech Talk and the Real Estate Business

According to survey results released in December by Fannie Mae, demand for and use of mobile mortgage products almost doubled over the course of 12 months. The survey covered 1,200 consumers who bought homes in the last year and have a mortgage guaranteed by Fannie Mae.
“This is a startlingly large increase reflecting the pervasive and growing use of mobile technology among consumers at all income levels,” wrote Steve Deggendorf, director of market insights research for Fannie Mae. “Although this research focused on low- and moderate-income homebuyers, our prior research suggests the results would be even larger for mobile usage and interest among higher-income consumers.” 
Fannie Mae’s findings help draw a picture of how the real estate market is moving rapidly toward maximum use of technology, often driven by customers.
Recently, loanDepot, which bills itself as “a fast-growing national consumer lender, announced the launch of its end-to-end proprietary digital lending platform as part of an $80 million investment in technology. The platform features three distinct components: a web-based consumer portal, a mobile point of sale system, and a fully digital mortgage loan application. All will be integrated into loanDepot’s web-based loan origination system, which consumers and lenders can use via mobile or desktop devices. 
Development of these types of systems can be both exciting and a bit scary. For all of us, regardless of our specific roles in the industry, survival depends on embracing technology with all its built-in challenges. To put a twist on the old saying from academia: When it comes to technology, we all need to produce or surely we will perish.
What’s your point of view? Call me, email me, or write a comment below.

Other stories we’re following: 
Affordability is main hurdle for aspiring home buyers.
Sales up, consumer sentiment down.
Three factors affecting millennial home ownership – negatively.
Limited inventory, quick sales.

Tuesday, January 31, 2017

New Year, New President

In the News   Presented by Prairie Title  
January 31, 2017
Onward We Go

We’ve just inaugurated a new President, and as we move forward as a nation in a different direction, uncertainty seems to be the dominant factor. No one knows how the new administration in Washington will work with the new Congress. Republicans are cheered, of course, about having control of the legislative and executive branches, but it was only eight years ago that Democrats had the same level of power, and they lost the legislature after two years.

One item that concerns me is the possibility that the home mortgage interest deduction might be revisited by the new Congress. It’s hard to tell how accurate reports are, but there seems to be some substance to the discussion. I hope changes to this vital economic tool are quickly taken off the table, as does nearly everyone in the real estate industry. Eliminating the mortgage interest deduction would no doubt do great damage to our industry, and likely the entire economy as middle class families work to cope financially without that valuable deduction.

I urge you to follow developments in Washington and stay in touch with your local and national associations, representatives and senators as events unfold. Let’s make sure our voices are heard as decisions are made.

Meanwhile, signs point to a growing real estate market this year. On the construction front, the builders are predicting another strong year. Last year, the National Association of Home Builders projected 1.16 million total housing starts in 2016, which was up nearly 5 percent from the previous year. Now NAHB is forecasting a 10 percent increase in single-family production for 2017 and a 12 percent rise for 2018.

On the whole, I’m optimistic about our industry in 2017. Refinances are drying up, but existing home sales will be good, more Millennials will be moving into the housing market and the commercial market is stable.  

What’s your point of view? I’d love to start a conversation. Call or email me, or write a comment below.

Other stories we’re following:

Pending home sales predict strong 2017.
Total value of U.S. home sales at all-time high.                    
Blockchain for mortgages, compelling but premature?
Millennials desire home ownership, but…         

Thursday, December 8, 2016

In the News   Presented by Prairie Title
December 8, 2016

Bye-Bye Refis. What’s Next?

I’ve been thinking about the state of our industry as 2017 nears. Actions to be taken by the new Congress and new administration in Washington will have an impact on the housing market, of course, but let’s leave speculation about what might happen in Washington for another day. Something that is certainly real now is a decline in refinances as interest rates have climbed since the election, and likely will continue to rise as the Fed meets next week and is almost certain to increase rates.

As Mortgage Daily reports, based on Freddie Mac’s Refinance Outlook, refinance originations are expected to go from $228 billion in the current quarter to $105 billion in Q1 of 2017. Black Knight even suggests that the potential total refi pool has shrunk in half already with the interest rate rise.

Where do we look for good news? Home sales, naturally, but with the caveat that higher mortgage rates combined with rising home prices may slow housing market growth in 2017, especially among a key demographic: Millennials.

Recent spikes in mortgage rates may potentially price some first-time home buyers out of the market,” NAR said recently. “The higher rates mixed with rising home prices will likely cause the housing market to slow in 2017 and see only moderate growth.” NAR’s 2017 “snapshot” does provide some positives:

·         Home prices are expected to rise 3.9 percent nationwide.

·         Existing-home sales are predicted to increase 1.9 percent to 5.46 million homes.

·         The homeownership rate is expected to stabilize at 63.5 percent, after bottoming out at 62.9 percent in 2016.

·         New-home sales are expected to increase 10 percent and new home starts to rise 3 percent.
I’m hopeful as 2016 comes to an end. I really believe that the strong movement of Millennials into the real estate market is not far off. There’s a big wave coming, we just can’t be sure exactly when.

Our next issue of In the News will come out right after New Year’s. In the meantime, I hope the coming holiday season is peaceful and relaxing for you and your family.

What’s your point of view? I’d love to start a conversation. Call or email me, or write a comment below.

Other stories we’re following:

2017 U.S. mortgages to exceed $1 trillion.

What’s coming for CFPB mortgage policies?

Where will home prices go in 2017?

Battle lines drawn over mortgage interest deduction.

Monday, October 31, 2016

Government and The Economy

In the News   Presented by Prairie Title  
October 31, 2016
Election Season is Here: Thinking of Government’s Role

By Frank Pellegrini, Prairie Title CEO   

It’s Halloween, so naturally the goblins and ghouls will be out in full force in our neighborhoods. Trick or treating reminds me of an economic concept I’ve been thinking a lot about lately. With the election just days away it’s a good time to ask the questions: How involved in our economy do we want our government to be? How many “treats” do we expect, or need? The federal government, of course, is very involved in our everyday economy, directly through regulation, taxation policy, etc., but also in some ways more indirectly.

Think of Social Security. While the money we all pay into Social Security is more or less the same money we eventually take out (hopefully), the government is still involved as the collector and distributor. And that money, when distributed, for the most part goes directly into the economy in the form of payments for housing, food, entertainment, etc.

Taking things a step further, some economists advocate strategic use of so-called “helicopter money” where the government flies in and “drops” money into a situation to solve a problem and at the same time provide economic benefit. Infrastructure is a good example. Government money spent on roads and bridges not only improves our lives by providing safer roadways, but also provides stimulus in the local area. Workers who provide the labor, in turn, pay taxes back to the government.

In an interesting piece by A. Gary Shilling published in Bloomberg News, Shilling argues that a form of helicopter money is needed to further stimulate our economy.

“Both U.S. political parties seem to agree that funding for infrastructure projects is needed, given the poor state of American highways, ports, bridges and the like. And a boost in defense spending may also be in the works, especially if Republicans retain control of Congress and win the White House. Given the ‘mad as hell’ attitude of many voters in Europe and the U.S., on the left and the right, don't be surprised to see a new round of fiscal stimulus financed by helicopter money, whether Donald Trump or Hillary Clinton is the next president.”

What’s your point of view? I’d love to start a conversation about this. Call or email me, or write a comment.
Election Day is next week. If you haven’t voted already, I urge you to make your voice heard.

Other stories we’re following:
2017 U.S. mortgages to exceed $1 trillion: MBA.
Nine takeaways from the ULI convention.
Case-Shiller: Housing prices just below record highs.
 Why housing remains a bright spot.