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Raleigh Mortgage Group, Inc
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Mixed Employment Data

The main influence on mortgage rates this past week was Friday’s Employment report which was viewed on balance as a little weaker than expected. The Fed minutes and the other data had just a minor impact. As a result, mortgage rates ended lower.

Against a consensus forecast of 190,000, the economy gained 213,000 jobs in June. In addition, upward revisions added 37,000 jobs to the results for prior months. The economy has gained an average of 215,000 jobs per month so far this year, exceeding even the strong pace of 182,000 seen over this period last year.

The unemployment rate increased from an 18-year low of 3.8% to 4.0%, above the consensus for a flat reading of 3.8%. There are two factors which influence the unemployment rate, and June’s increase was due to a surge of workers entering the labor force rather than job losses, so this actually was viewed as a sign of strength.

Average hourly earnings, an indicator of wage growth, fell slightly short of expectations. They were 2.7% higher than a year ago, the same annual rate of increase as last month. Overall, the shortfall in wage growth was viewed by investors as more significant than the strong job gains, and mortgage rates moved a little lower after the data.

The minutes from the June 13 Fed meeting released on Thursday contained no major surprises and caused little reaction for mortgage rates. Noteworthy, though, Fed officials discussed both upside and downside risks to the economy. They pointed to the recent tax cuts as a potential source of support for economic growth in coming years, but also the risk that increased trade tensions could slow future investment activity, which would be negative for the economy.

Looking ahead, the inflation data will get the most attention. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for finished goods and services. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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How to Get Your Offer Accepted Without Breaking the Bank

If you’re in the Raleigh area, you’ve probably notice that we’re in a seller’s market. What exactly is a seller’s market? Basically, it means there are more people looking to buy then sell. With houses selling on the market in only a few days, getting an offer accepted is difficult.

In a market like this, sellers are usually receiving multiple offers. Some are even selling above listing price. So the question is, what makes an offer stand out and get accepted?

Here are 5 ways to get your offer accepted in a seller’s market without breaking the bank.

1. Leave it on the Table. An EMD, Earnest Money Deposit, is a deposit that shows a buyer you are serious. So when you see a house you like, leave more on the table. Typically an EMD is 1-3% and has contingencies to protect the buyer in cases of poor inspections or other complications. If you offer is accepted, the EMD is considered part of your down-payment.
2. Come Pre-Qualified. If you are shopping in the Raleigh market, prequalification is a must. Being pre-qualified means sellers know that if they accept your offer it will go through. In addition, it tells the buyer what they can afford to buy, interest rates, loan programs, and more. Look at our page to learn more about pre-qualification.
3. Get Your Foot in the Door…And Fast. When it comes time to look, buyers have to make themselves available. When an agent asks, “What time works best?”, buyers are better if they can get the earliest time available. How can a buyer get their offer accepted? Be the first one to put an offer in.
4. Make a Lasting Impression. People may tend to forget, but at the end of the day, a person is making the decision on who to sell to. So when the offers become indistinguishable, it often goes to the person who was distinguishable. Don’t try too hard, but finding point of relation can go a long way. If all else fails, remember they are transitioning and moving too. Ask them about it.
5. Add an Escalation Clause. If this is a house that can’t be passed up, then say that. Put in an offer with an offering price, but say this price will increase to $XXX above the highest bidder, until $XXX,XXX price. This does let the seller know you are willing to go higher, but sometimes the home is worth the risk.

So when you need to close on a home, don’t hesitate to use these tactics. Raleigh Mortgage Group gets you in a home the best way you can. With knowledge of the best loan programs and extensive knowledge of the market, Raleigh Mortgage Group is here for you. If you need to get pre-qualified or simply have any questions about buying a home contact one of our trusted experts.
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Quiet Week

There were few surprises in the data released this past week or in the other economic news. It was a quiet week, and mortgage rates ended a little lower.

One reason that the Fed has been raising the federal funds rate is that inflation has moved higher in recent months. The Fed’s favored inflation indicator is the core PCE price index. After holding steady at levels close to 1.5% for nearly a year, core PCE has jumped over the last three months. Friday’s release showed that core PCE in May was 2.0% higher than a year ago, the largest annual rate of increase since April 2012.

Gross domestic product (GDP) is the broadest measure of economic growth, and it gets revised multiple times as new information is collected. For the last several years, first quarter GDP has been weaker than the other three quarters for reasons upon which economists disagree. This trend appears set to continue in 2018, as the latest reading for the first quarter showed a small downward revision to 2.0%. Early estimates for second quarter GDP are much higher at around 3.5% to 4.0%.

Recently released data revealed that the disparity between sales of previously owned homes and new homes continued in May. While contracts signed to purchase previously owned homes fell a little from April and were lower than a year ago, contracts signed to purchase new homes jumped 5% from April and were 14% higher than a year ago. A shortage of inventory of previously owned homes in many regions is clearly holding back sales.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index will be released on Monday, and the ISM national services index on Thursday. The minutes from the June 13 Fed meeting also will come out on Thursday. Mortgage markets will close early on Tuesday and will be closed on Wednesday.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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Focus on Central Banks

The focus was on central banks this past week. While the net impact of the U.S. Fed meeting was minor, the European Central Bank meeting was positive for global bond yields. As a result, mortgage rates ended the week a little lower.

As expected, the Fed announced a 25 basis point federal funds rate hike at Wednesday’s meeting. After the release of the Fed statement, investors focused on a small increase in the federal funds rate forecasts for 2018 and 2019 from the 15 Fed officials. This was viewed as hawkish, meaning in favor of tighter monetary policy. However, comments from Fed Chair Powell during his press conference later came across as more dovish than expected, meaning in favor of looser monetary policy. While there was some volatility following the meeting, the net effect on mortgage rates was small.

On Thursday, the European Central Bank (ECB) announced that it will begin to wind down its bond purchases in September and will end them in December, which was anticipated. Investors were surprised, however, that officials said that the first rate hike will not take place until at least September 2019, later than expected. Global bond yields, including U.S. mortgage rates, moved lower after the news.

Since consumer spending accounts for roughly 70% of economic activity, the Retail Sales report is closely watched each month. Following the hurricanes, retail sales surged last fall, and the trend was expected to continue. They then turned negative for three straight months, leading to questions about the strength of the consumer earlier this year.

However, Thursday’s release revealed that retail sales in May were much higher than expected, marking the third straight month of solid gains and further easing investor concerns about the economy.

This week will be a light one for economic data. Housing Starts will be released on Tuesday. Existing Home Sales will come out on Wednesday. The Philly Fed regional manufacturing index will be released on Thursday.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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Record Job Openings

Following last week’s stronger than expected labor market and manufacturing data, the reports released this week continued to suggest that the economy is growing at a solid pace. Since stronger economic growth raises the outlook for future inflation, mortgage rates ended the week higher.

The JOLTS report measures job openings and labor turnover rates, and the Fed closely monitors this data. In April, job openings unexpectedly jumped to 6.7 million, a record high level. Of note, there were just 6.3 million unemployed people in the labor force that month. Until now, the number of job openings has never exceeded the number of job seekers since recordkeeping began in 2000. Investors will be watching closely to see if the tight labor market leads to a faster pace of wage increases, which would be inflationary and thus negative for mortgage rates.

The ISM national services index released this week also was stronger than expected as it increased to 58.7. Readings above 50 indicate an expansion in the service sector. Levels above 60 have been seen only a handful of times since this data began being tracked in the late 1990s.

Thursday was the most positive day for mortgage rates this week, but the reason was not clear. There was speculation that a large emerging market central bank was buying sizable amounts of U.S. bonds. Foreign central banks routinely buy and sell U.S. bonds to adjust the level of their currency reserves, so this explanation is plausible. Unfortunately, though, these transactions are not publicly disclosed, meaning that there is no way to confirm if this is what took place.

Next week will be packed with major economic news. The next U.S. Fed meeting will take place on Wednesday, and investors widely expect a 25 basis point federal funds rate hike. Then there will be a European Central Bank (ECB) meeting on Thursday. There has been speculation that the ECB will provide new guidance about the future of its bond buying program. The major U.S. economic reports will be the Consumer Price Index (CPI) inflation data on Tuesday and Retail Sales on Thursday.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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Italy and North Korea

Geopolitical events related to Italy and North Korea were the primary influences on mortgage rates this past week. The U.S. economic data mostly came in on target and caused little reaction. Mortgage rates declined from the seven-year highs reached last week.

Italy formed a new government early this week, and the political parties in control of the coalition have changed significantly. The new leaders have shown little support for remaining in the European Union (EU). This does not mean that Italy will ultimately exit the EU, but the risk has certainly increased. On Friday, President Trump canceled the planned historic U.S. summit with North Korea. The uncertainty about the future of the EU and the relations with North Korea created by these events caused investors to shift to safer assets, including U.S. mortgage-backed securities (MBS). This additional demand for MBS helped push mortgage rates lower.

The housing data released this week revealed that sales of both new and previously owned homes have held relatively steady each month so far this year. In April, sales of previously owned homes fell a bit from March, but they were close to the level seen a year ago. Sales of newly built homes also fell a little from March, but they were 11.6% higher than a year ago.
The difference in annual performance was mainly due to the supply of homes on the market. The inventory of previously owned homes was at just a 4.0-month supply, 6.3% lower than a year ago. The inventory of new homes was at a much healthier 5.4-month supply, 12.4% higher than a year ago.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the Core PCE price index, the inflation indicator favored by the Fed, will be released on Thursday. The ISM national manufacturing index will come out on Friday. Mortgage markets will close early on Friday in observance of Memorial Day.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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Italy and North Korea

Geopolitical events related to Italy and North Korea were the primary influences on mortgage rates this week. The U.S. economic data mostly came in on target and caused little reaction. Mortgage rates declined from the seven-year highs reached last week.

Italy formed a new government early this week, and the political parties in control of the coalition have changed significantly. The new leaders have shown little support for remaining in the European Union (EU). This does not mean that Italy will ultimately exit the EU, but the risk has certainly increased. On Friday, President Trump canceled the planned historic U.S. summit with North Korea. The uncertainty about the future of the EU and the relations with North Korea created by these events caused investors to shift to safer assets, including U.S. mortgage-backed securities (MBS). This additional demand for MBS helped push mortgage rates lower.

The housing data released this week revealed that sales of both new and previously owned homes have held relatively steady each month so far this year. In April, sales of previously owned homes fell a bit from March, but they were close to the level seen a year ago. Sales of newly built homes also fell a little from March, but they were 11.6% higher than a year ago.

The housing data released this week revealed that sales of both new and previously owned homes have held relatively steady each month so far this year. In April, sales of previously owned homes fell a bit from March, but they were close to the level seen a year ago. Sales of newly built homes also fell a little from March, but they were 11.6% higher than a year ago.

The difference in annual performance was mainly due to the supply of homes on the market. The inventory of previously owned homes was at just a 4.0-month supply, 6.3% lower than a year ago. The inventory of new homes was at a much healthier 5.4-month supply, 12.4% higher than a year ago.
Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the Core PCE price index, the inflation indicator favored by the Fed, will be released on Thursday. The ISM national manufacturing index will come out on Friday. Mortgage markets will close early on Friday in observance of Memorial Day.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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ECB Spooks Investors

The market moving economic news this week again was viewed as negative for mortgage rates. This time the source was the European Central Bank (ECB). The U.S. economic data mostly came in on target and caused little reaction. Mortgage rates reached the highest levels in seven years.

On Monday, a speech from a top ECB official was viewed by investors as unexpectedly hawkish, meaning in favor of tighter monetary policy. Galhau, the governor of the Bank of France, said that the ECB might soon provide guidance about the timing of its first rate hike in years. While investors anticipate that the ECB will end its bond buying program later this year, they were somewhat surprised by the talk about rate hikes, and some investors viewed his speech as opening the door for rate hikes to take place sooner than expected. Bond yields around the world moved higher after the speech, including U.S. mortgage rates.

Next to the Employment data, the report on retail sales is one of the most closely watched each month. Consumer spending accounts for about 70% of economic activity in the U.S., and the retail sales data is a key indicator of growth. Following the hurricanes, retail sales showed very strong gains for three months last fall.

Sales then unexpectedly posted three months of losses, causing investors to worry that economic growth was slowing. However, the most recent data released this week showed a healthy increase in April of 0.3% from March. Combined with the solid gains seen in March, it appears that the three weak months were not indicative of a longer-term trend.

Looking ahead, New Home Sales will be released on Wednesday and Existing Home Sales on Thursday. Durable Orders, an important indicator of economic activity, will come out on Friday. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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Inflation Falls Short

There was little major news this week and not much reaction to the economic data. Investors shifted some assets from bonds to stocks, and mortgage rates ended the week a bit higher.

Perhaps the most widely followed inflation report is the Consumer Price Index (CPI), which looks at the price change for a basket of goods and services. Investors generally prefer to look at the core reading, which excludes the volatile food and energy components, to get a feel for the longer term trend.

In April, Core CPI increased 0.1% from March, below the consensus for an increase of 0.2%. Core CPI was 2.1% higher than one year ago, the same annual rate of increase as last month.

While it is rarely a market moving report, Fed officials pay close attention to the monthly JOLTS data to help determine the strength of the labor market. JOLTS measures job openings and labor turnover rates. In March, job openings jumped to 6.55 million, which was a record high level. An increase in job openings is viewed as a sign of strength in the labor market, since it indicates that companies are interested in hiring but the pool of unemployed workers is not large.

Looking ahead, Retail Sales will be released on Tuesday, and it will be the biggest report of the week. Consumer spending accounts for about 70% of economic activity in the U.S., and the retail sales data is a key indicator. Industrial Production, another important indicator of economic activity, and Housing Starts, will come out on Wednesday.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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GDP Beats Expectations

Mortgage rates climbed higher during the first half of the week and then reversed direction during the second half to end nearly unchanged. The movement didn’t correlate with any specific economic news.

The first reading for first quarter gross domestic product (GDP) growth, the broadest measure of economic activity, was 2.3%, above the consensus of 2.0%. This was down from a level of 2.9% in the fourth quarter of 2017. During the first three months of 2018, relatively weak consumer spending was offset by strong business investment.

Economists noted that the recent tax cuts may distort the typical distribution of activity between quarters for a while, making it necessary to look at longer-term time periods to discover the underlying trend in economic activity. Early estimates for second quarter GDP growth are for an increase of about 3.2%.

This week’s data on home sales in March was encouraging. Sales of previously owned homes rose 1% from February and were close to the level seen a year ago. Sales of newly built homes increased 4% from February and were 9% higher than a year ago. Both readings were stronger than expected. The difference in performance likely was due to the supply of homes on the market. The inventory of previously owned homes was at just a 3.6-month supply and was 7% lower than a year ago. The inventory of new homes was at a much healthier 5.2-month supply and was 13% higher than a year ago. Home builders clearly are responding to the shortage of supply.

Thursday’s European Central Bank (ECB) meeting provided no change in policy or new guidance for the future. ECB President Mario Draghi said that officials need more time to better understand what has caused slower growth in the region so far this year. The eurozone economy grew at its fastest pace in a decade in 2017, but growth has slowed in 2018. Investors expect that the ECB will decide in June or July when to end its bond buying program.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the Core PCE price index, the inflation indicator favored by the Fed, will be released on Monday. The ISM national manufacturing index will come out on Tuesday and the ISM national services index on Thursday. The next Fed meeting will take place on Wednesday, and no change in policy is expected.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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