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MORTGAGE MARKET GUIDE Monthly – Views You Can Use August 2016 Issue

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Views_You_Can_Use 2016

MORTGAGE MARKET GUIDE Monthly – Views You Can Use August 2016 Issue

  “Why must we always ride a divided highway?” Doobie Brothers. While the housing sector continues to cruise along nicely, there are still some bumps in the road elsewhere. We’ll roll up our sleeves to cover this story and more, including:


Please feel free to forward this newsletter to friends, family or co-workers who may find it helpful.


  Housing Brings the Heat


mortgage home loan rates fed viewsSummer often signals a jump in housing activity. This year was no exception. The National Association of REALTORS® reported June Existing Home Sales rose by 1.1 percent from May and were up 3 percent from June of last year, remaining at their highest pace since February 2007. New Home Sales also warmed 3.5 percent above May’s reading, marking a 25.4 percent gain over last June and the highest level since February 2008.Research firm CoreLogic also reported home prices continued climbing with June’s year-over-year reading rising 5.7 percent. The trend is forecast to continue into next year. Increasing home prices are great for home sellers; homebuyers can offset the increases, benefitting from the continued historically low home loan rates.

Framing the Future
Housing inventory could get a much-needed boost. Building Permit applications rose 1.5 percent in May, while Housing Starts, which measure when excavation begins on a home, rose 4.89 percent. Both readings were above expectations. Single-family starts, the largest segment of our housing economy, increased 4.4 percent.While the housing market remains a bright spot in our economy, other areas are still struggling.

Jobs and Wages Slow
Stagnant job and wage growth continue to dismay U.S. markets and economists. The Bureau of Labor Statistics reported 287,000 jobs created in June. While this was well above expectations, exuberance was hampered by a downward revision in May’s numbers, to a paltry 11,000 jobs created. From the period April to June 2016, job growth has averaged 147,000 per month, well below the five-year high of 282,000 new jobs per month seen in the fourth quarter of 2015.

Unemployment ticked up to 4.9 percent, and average hourly earnings rose by a modest 0.1 percent. The good news is hourly wages did increase 2.6 percent from this time last year, matching the highest level of the recovery since 2009.

What the Fed Said
The most recent Federal Open Market Committee meeting in July left the Federal Funds Rate (the benchmark interest rate at which banks lend to each other overnight) unchanged, meeting market expectations. In a statement released after the meeting, the Fed said it would continue to monitor inflation and other economic reports here and around the world.

In general, when economic data is weak, or there is uncertainty overseas like Britain’s recent decision to exit the European Union, investors tend to move money out of riskier investments like Stocks and into Bonds. And because home loan rates are tied to Mortgage Bonds, when Mortgage Bonds improve home loan rates often follow.

The bottom line is that home loan rates remain near historic lows.

If you have any questions about housing or home loan rates, or if you’d like to discuss your unique situation, please call or email today.



  What to Watch: Consumer Price Index (CPI)


Inflation can have a big impact on the Bond markets, and also on home loan rates, which are tied to Mortgage Bonds.

Here’s what you need to know.

What is the Consumer Price Index (CPI) report? The CPI averages price changes on a predetermined basket of goods including transportation, rent, food, energy and medical care. The report is used to assess price changes associated with the cost of living.

What’s happened recently? Economic data showed that June Core CPI, which strips out more volatile food and energy prices, rose by 2.3 percent year-over-year, which is the hottest year-over-year rate since the start of the financial crisis back in 2008.

What’s the bottom line? While inflation has not been an issue in nearly a decade, should it finally come to roost, home loan rates could go higher despite other Bond-friendly factors like the Brexit uncertainty and global economic weakness. This is because inflation reduces the value of fixed investments like Bonds, and home loan rates are tied to Mortgage Bonds.

I’ll continue to monitor inflation reports closely, but if you have any immediate questions, please call or email today.



  Teaching Kids Financial Responsibility


Connecting kids to financial management skills now, can provide the building blocks for financial responsibility later in life. Here are some tips.

Pay an Allowance
If your kids don’t have money of their own, they could have a difficult time grasping where money comes from or why it’s valuable. Consider ways for kids to earn money for routine chores around the house.Before paying the allowance, sit down and set expectations. Discuss the specific chores and timelines for completing those chores, the amount of money they’ll earn, and what day is “pay day.” This helps instill a strong work ethic as well as drives home the message that money is earned and not just a gift. Also reiterate that everyone must pitch in to keep the house running smoothly, so not every chore or action they are asked to complete will come with payment attached.


Teach About Savings
Consider implementing a savings rule. For example, for every dollar earned, 20 to 30 percent should be saved for the future. Talk about saving for a specific purchase (like a bike) or simply for unexpected expenses later.A trip to the bank to establish their own savings account is a rite of passage children won’t forget. Or, if your children are still young, you can decorate a jar to use as a special savings bank at home. Once a month, sit down with your kids and count how much they have deposited and how much they have in total as a result.

Lessons for Shopping and Credit
As you go down your shopping list, ask kids to help you compare prices on different brands, sales and quantities per package. You can also have your children try to keep a running tally and make a guess of what the total cost of your purchase will be.

Once your kids have a sense of money matters, you may want to take the lesson up a notch. For instance, when your children need new school clothes, test giving them the money (or a store gift card) and put them in charge of what they buy.

As they shop, gently help them compare the prices and number of items they can purchase within their budget. This will help them not only learn about making smart purchases, but also introduce them to the credit card system, in which money may not seem real because it’s unseen. In today’s electronic financial world, this lesson will become more and more important as your children get older.

At times your children may beg for an exception. But by being consistent with these lessons, kids are better prepared to deal with common financial situations when they grow up.



  Q&A: Removing Paint From Skin

  QUESTION: How do I remove dried paint from my skin and hair? 


ANSWER: Painting can be a popular home project during warmer months. And even the most careful painters can get a little paint on their skin or in their hair. The good news is there’s no need to clean the paint with irritating solvents or harsh chemicals.

First, wash with soap and water. Then choose your paint problem:

  • Latex paint can be removed with a dab of hand lotion massaged onto the painted area.
  • Oil-based paint can be removed with a variety of non-harsh oils, including a drop of baby oil or cooking oils like vegetable, olive, avocado or coconut oils. Foam shaving cream also works.
  • Paint in your hair can also be removed with baby or olive oil rubbed into the painted strands. Run a comb through after treating, and then shampoo to finish the job.

Sources: BottomLine, wikiHow

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Questions, Comments or For more information you can contact Christian Penner at: Call/Text: (561) 373-0987 or visit us online at www.ChristianPenner.com

The Christian Penner Mortgage Team, A Branch of 
American Financial Network, Inc

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