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Carese Economics -week Of December 2-6

By caresebusby |

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Economic/Market  News

•     Economic indicators  released this week:

o    Monday, December 2, 2013: Construction Spending – rose .8% in October; PMI  Manufacturing Index – rose slightly 54.7 growth

o     Wednesday, December 4, 2013: New Home Sales (Oct) 444K versus  420K market expectations

o      Thursday, December 5, 2013: Jobless Claims –298K versus 330K market expectations

o      Friday, December 6, 2013: Unemployment rate ticked down to 7% versus the 7.2% expectation ;  203K jobs added in November, higher than the 180K Wall Street anticipated. Consumer sentiment jumped to 82.5 for December, up from 75.1 in November. 

•            Janet Yellen is expected to be confirmed next week as next Federal Reserve Chairperson. She has indicated  she will follow suit with current Federal Reserve  quantitative-easing policy until employment picture is much stronger. Employment participation rate is at 63%, the lowest level in 3 decades.

2013 Reflective Highlights:

  • FHA increases monthly mortgage insurance premiums and lengthens length of time requirements  that mortgage insurance remains in place on loans
  • Minimum down payment was raised to 5% on all conventional loan programs
  • Asset based lending makes it debut – Asset rich borrowers with non-traditional income streams will now have the opportunity to finance real estate

2014 Looking  forward:

  • Buckle your seat belts and be ready for a financial strip search… The QRM (Qualified Residential Mortgage) is set to take effect January 10, 2014 as part of further Dodd-Frank legislation.
    • QRM requires borrowers to show greater strength in employment history, lower debt to income ratios,  and  qualify based on tighter credit and income guidelines  than in the past.
    • Buyers be prepared for a financial strip search and get pre-approved prior to shopping for a home. Preparation and education  is key!
    • Don’t be caught in a web of surprise. Even buyers who think they are among the qualified elite may be in for surprise with the strengthened guidelines.
    • There are still plenty of great loan program options for borrowers even with all of these changes!
  • Please contact me at carese.busby@cobaltmortgage.com with any questions or feedback.