CHM Blog

Realtor Market Insider September 16, 2019

September 16th, 2019 12:02 PM by Richard Sardella MLO.100007700/NMLS 233568

 

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Real estate still rules as safest long-term retirement investment in new survey

When 2,000 Americans are asked their opinion about investing and a large chunk of them agree, it’s something worthy of note. According to a study done by the online magazine Sophisticated Investor, a cyber-publication dedicated to providing insight and analysis on a variety of investment topics to investors worldwide, real estate won out as the safest investment.

The group, aged between 35 and 65+, examined a number of investment options they consider to be the safest for long-term retirement investing, including real estate, stocks & bonds, bank savings accounts, fixed annuities, precious metals and U.S.-backed securities. The survey found that  22.4% of all respondents selected real estate as the safest long-term investment for retirement with a higher percentage resulting from the 45-54-year-old group (25.1%). A press release by Newswire about the study says, “Given the current turbulent state of the financial markets and the global economy, the average American investor seems to be leaning towards more secure long-term investment options for retirement and real estate is currently viewed as the top choice in that regard.”

A spokesperson for Sophisticated Investor goes on to say, “Real Estate has come a long way since the last financial crisis where confidence in this asset class hit rock bottom. The real estate markets have been showing consistent positive results all over the country, and that could explain why Americans have such a positive outlook on this asset class.”

Stocks & bonds came in second at 18% and interestingly enough, when demographic filters were applied to the survey results, factoring young investors, between 35 and 44-years-old,  19.5% indicated this investment option was the safest with an even larger share of them being females. Gold and silver bullion garnered only 10.6%, yet when demographics filters were applied, males were the largest group voting for these metals as the safest long-term investment for retirement. Precious metals are usually considered safest during times of economic crises.

Bringing up the rear was U.S. Treasury issued securities at 9% — surprising in that these have long been the bastion of safety and security amid the turbulence of financial markets.

Source: PRNewsire, TBWS

 

This Week's Mortgage Rate Summary

 

 

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways this morning.  Last week the MBS market worsened by -132 bps.  This was enough to move rates higher last week. We saw high rate volatility throughout the week, especially Friday.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact your mortgage rates this week. 1) Central Bank, 2) Trade War and 3) Geopolitical.

1) Central Bank: We will hear from 3 of the world's top 5 largest central banks this week. Our own Federal Reserve will take center stage. Wednesday afternoon, we will get their interest rate decision and policy statement. But we also will get their economic projections ("dot plot chart") and a live press conference with Fed Chair Jerome Powell. The bond market will react to the projected path of interest rates more so than the actual rate cut (if any). We also will get interest rate decisions from the Bank of Japan and the Bank of England.

2) Trade War: The U.S. and China have seen some progress over the past week, and any further movement will get the attention of traders. But Europe is also in focus as the WTO looks like it has ruled in the United States' favor in regards to their claims against AirBus which clears the way for the U.S. to startup $6 to $10B in tariffs against Europe. Also, the Mexico and Canada deal is trying to get through Congress.

3) Geopolitical: Over the weekend, a major Saudi oil facility was attacked by drones. Iran is being accused of initiating the strike. Both the U.S. and Iran have stepped up the "saber-rattling" over military action. Brexit is fast approaching, and the demonstrations in Hong Kong are also on the radar.

This Week's Potential Volatility: High

We saw a lot of rate volatility last week as rates moved higher. Look for continued rate volatility for the reasons denoted above — especially Wednesday with the Fed rate decision and Fed Chair Powell's comments.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

 

About Richard Sardella

 

 

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

 

About This Report And Disclosure Information

 

 

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on September 16th, 2019 12:02 PM

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