DSHA Delaware Diamond DPA Program launches June 15, 2023 and gives Delaware Essential Workers $15,000 toward purchasing a home in Delaware. If you are a current Delaware Resident living and working in Delaware as an “Essential Worker” then don’t miss this opportunity to get $15k from the Delaware State Housing Authority to help you purchase a home. Limited Funding so call now to get started at 302-703-0727 or APPLY ONLINE.
WHAT ARE THE GUIDELINES FOR THE DSHA DELAWARE DIAMOND DPA PROGRAM?
The DSHA Delaware Down Payment Assistance Program (DPA) will be a soft second mortgage loan for $15,000 toward closing costs & down payment. The loan will be forgiven after 10 years. In order to qualify must be a Delaware Resident that is currently working in Delaware as an Essential Worker. Below are the guidelines for the Program:Keep Reading...
Mortgage Rates set another record high for 2016 last week as mortgage bonds continued to sell off. If you look at the mortgage bond chart below you can see mortgage bonds broke below support on Wednesday after Federal Reserve announced it was raising Fed Funds Rate. The big red candle stretched all the way down to the next level of support. We are recommending FLOATING your
Mortgage Rates moved to the highest level for 2016 on Friday as mortgage bonds continued to sell off. If you look at the mortgage bond chart below you can see the series of long red candles which show the bond continues to sell off and break through each floor of support. Last Week we saw a false bounce back higher on bonds that didn’t as Thursday resumed the sell off in Bonds and followed through again on Friday. The technicals show a strong sell signal still for bonds so rates could continue to move higher therefore we recommend LOCKING your
Mortgage Rates Spiked Higher after Donald Trump was elected the new President of the United States. If you look at the bond chart below you can see mortgage bonds broke through support at the 200 day moving average on Tuesday Election day. This was a bad sign for bonds and on Wednesday bonds follow through by selling off again and breaking through 2 more floors of support to end down almost 100 bps. Thursday mortgage bonds again sold off and broke through 2 more floors of support. This is very bad technical data and bonds more room to sell of before hitting the next floor of support. Mortgage Rates moved higher as the market priced in the risk of a Donald Trump Presidency with his stated policy anticipating a rise in inflation. Inflation is bad for fixed investment assets like bonds so bonds sold off in dramatic fashion jumping mortgage rates anywhere from 0.25% to 0.5% higher depending on your qualifying factors. We recommend to LOCKING your mortgage rate as interest rates could continue to rise as the market digests what affect a Trump Presidency will have on the markets.
On Economic News
The Stock Market reacted very erratically to the election results of the next U.S. President. The market dropped 800 points in Dow futures during Tuesday night but when the market opened on Wednesday the DOW surged higher. The DOW ended the day Thursday to set a new all time record high. This pulled money out of the bond market and traders also were pricing in the possibility of rise in inflation as Donal Trump takes office and begins to implement his proposed policies.
Lower income taxes and spending money on infrastructure as well as canceling free trade agreements are all things that could cause a rise in inflation and give a boost to the stock market which both are bad for bonds. Prediction for mortgage rates are to average 4.2% for 2017 and be at about 5% by end of 2018. This means if you are looking to purchase a home, now is the time to purchase a home to take advantage of record low rates. The market will not crash and the housing market will continue to do well as 5% rates are still very low rates historically.
President elect Trump looks like he won’t remove Janet Yellen as Federal Reserve Chair and will let her stay on to finish her term in February 2018. This is change from what he said during campaign and may add some stability to the markets. It also looks like the odds of the Feds hiking their short term Fed Funds Ratein December 2016 went from less than 50% chance the day after elections to 81% on Friday as the market viewed Trump’s policy as inflationary so will force Feds to raise rates.
Weekly Initial Jobless Claims were released on Thursday and dropped 11,000 clams to 254,000 claims . This supports a very strong labor market. This week’s initial jobless claims will be watched closely as this is the sample week to be used in the November 2016 Jobs Report. This shows that the Jobs Report should be very good which would be bad for mortgage bonds.
Mortgage Rates finally stabilized and stopped moving higher last week as mortgage bonds found support at the 200 day moving average. If you look at the mortgage bond chart below you can see mortgage bonds sold off and were able to stabilize at the 200 day moving average which is the blue horizontal line. We are recommending FLOATING Your Mortgage Rates to Start the week to see if bonds can bounce off the support and move interest rates lower.
In Economic News
The Labor Bureau released the October 2016 Jobs Report on Friday which showed 161,000 jobs were created in October below expectations. New Job creations in 2016 has averaged 181,000 jobs per month which is down the 229,000 jobs for 2015. The unemployment rate ticked down to 4.9% from 5.0% in September. This is almost no change in unemployment rate since August of 2015. The unemployment rate ticked down by 0.1% for the wrong reason, 195,00 people left the work force not because more people went back to work.
Fed’s favorite measure of inflation, Personal Consumption Expenditure (PCE), was released last week and showed inflation was tame. PCE was up 1.2% year over year but the Core PCE was actaully flat which strips out food and energy.
Weekly Initial Jobless Claims were released on Thursday and moved up 7,000 claims to 265,000 claims for the week. Even though claims moved up this past week, it was still a good number and was the 87th consecutive week jobless claims remained below 300,000 claims.
In Housing News
CoreLogic Released it Home Price Index for September 2016. It showed the national average home price increased 1.1% from August 2016 to September 2016 and was up 6.3% nationally year over year. Locally, Delaware home prices were up 0.70% on average from August to September and are up 1.4% year over year. Projects for Delaware for next year are to be up 3.8%.
FHA Mortgage Loan Update – HUD Condo Approval Process Update
FHA made changes to their FHA Condo Approval process with mortgagee letter released October 26, 2016 which allows for the percentage of owner occupied units in a condo development to be less than the current guideline of at least 50 percent to qualify for a FHA Condo Loan. HUD may approve an occupancy percentage as low as 35 percent if requirements stated in Mortgagee Letter 2015-15 are met. The requirements for 35 percent occupancy are as follows:
Applications must be submitted under HRAP process for FHA condo approval
Funding of replacement reserves for capital expenditures and deferred maintenance of at least 20 percent of budget
No More than 10 percent of units can in arrears of 60 days or more past due
Must provide 3 years of acceptable financial documents
Mortgage Rates Moved Higher Last week as mortgage bonds continued to sell off. If you look at the mortgage bond chart below you can see mortgage bonds sold off last week and broke through the floor of support and finally stopped at the 200 day moving average. We are recommending carefully FLOATING your DE Mortgage rate to start the week as mortgage bonds have held the 200 day moving average so we are looking for bonds to move higher and move mortgage interest rates lower.
In Economic News
Gross Domestic Product GDP for 3rd Quarter 2016 was reported last week and the first readying came in at a surprising 2.9% which was above expectations of 2.5%. GDP measures the total dollar value of goods and services produced over a specific time period so it essentially shows the pace of economic activity. A GDP reading between 2.5% to 3% is optimal for a healthy economic.
When you dig into the GDP report, all was not well as consumer spending grew by only 2.1% which is the major factor to drive a health economy. Consumer spending dropped from 4.3.% in the second quarter of 2016. The GDP spiked up because of a 10% rise in exports which will not be sustainable so predicts for 4th quarter GDP are for about 2.1%.
Weekly Initial Jobless Claims were released on Thursday and came in at 258,000 claims which was a drop of 3,000 claims from the previous week and marked the 86th consecutive week of claims below 300,000. Weekly claims support a very good October Jobs report which will be reported on November 4th.
Mortgage Rates were finally able to move slightly lower last week as mortgage bonds were able to rebound off support. If you look at the mortgage bond chart below, you can see mortgage bonds had been trading lower for last couple of weeks but were finally able to find a floor of support last week and move higher but have hit a tough ceiling of resistance that will be very difficult to break above so we are recommending LOCKING Your Mortgage Rate to start the week to lock in the slightly better rates we saw at the end of last week.
In Economic News
Consumer inflation edged slightly higher as the Consumer Price Index (CPI) for September 2016 came in at 1.5% which was up from 1.1% in August 2016. Inflation is one of the key indicators the Federal Reserve is watching to help determine if they should raise short term interest rates. The Feds target for inflation is 2.0%, so getting closer to this target gives them more incentive to raise rates.
Weekly Initial Jobless Claims were released on Thursday and jumped higher to 260,000 claims for the week. Even though weekly claims moved up, it is still the 85th consecutive week of claims below 300,000. This is also the sample week to be used in the October Jobs Report so points to a strong jobs report for October 2016.