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DAYTONA REAL ESTATE INVESTMENT NEWS

Daytona USA Economic News ~ February 28, 2017
Economy ~ Just the Facts


NEWS BRIEF


Wall Street: 
Rebounds To A Bull Market Overnight

Slide Show:
America's 2017 Future

Real Estate: 2017


Real Estate
What's next for Home Buyers?

Wall Street: 
America's Future
Statistics & Comments
USA What's next for Home Buyers?

 

Wall Street: STOCK MARKET
Wall Street reacts favorably to the Trump administration and future goals.

THE GLOBAL MARKET
The Global market is volatile and flat. Efforts are emerging to building economic resilience.

GOVERNMENT
The Federal Reserve Board has yet to confirm the Trump Plan. Under the leadership of the FED Chair, Janet Yellen Democratic Appointee major Fed moves have not been favorable to Americans, who most valuable asset for growth, is real estate. It is general considered that real estate is approximately 50% of the USA economy. The FED whose moves in 2016 drove nationwide wide median and average home sale prices lower while interest rates went higher.

A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint:
All of the USA Government has to be on board to bail out America and Americans from the socialistic influence that has stifled the USA economy since 2008.
_______________________________________

REAL ESTATE FUTURES 
Prime Lending Rates:
The FED has indicated without concern, of the 2017 future America economy performance, that the FED will just raise interest rates 3 times in 2017.

This is a Socialist style move rather than Capitalist style move where you watch the economy's pulse and then make a decision in and for the future. Real Estate Purchases and Investment is a long term goal.

The reality is if the USA had a 7.5% appreciation factor for annual 2017, no change in interest rates would be needed. If the USA economy moved up to the 10% range a slight adjustment may be in order to preserve the growth at a rate concept.

The FED Chair Janet Yellen term expires January 2018 and is a Obama appointee.

_______________________________________

 

USA ECONOMIC DATA AS OF 
 February 28, 2017


February 28, 2017
The TRUMP Trek begins to Restore America.
Obama leaves a trail of Debt for Americans.

US NATIONAL DEBT:

-$19 TRILLION 980 BILLION Down
30 DAYS  Down  -$16 BILLION
National Debt:  Notes
In 2008 the National Debt as of January 9, 2008 was 9 Trillion 719 Billion. The National Debt has more than Doubled in the last 9 years. The National Debt went down in the last 30 days!

US GDP GROSS DOMESTIC
PRODUCT:

+$18 TRILLION 994 BILLION
30 DAYS UP    +$15 BILLION

US DEBT TO GDP RATIO: -105.58%
Improved in last 30 days +.11%
USA Debt exceeds USA Income.


Obama has increased the USA Dollar Supply
-963 Billion in 12/31/2016 
-821 Billion       2/28/2017 Improved
126 Billion less dollars printed
in the last 30 days.

Cost to each Taxpayer 12/31/2017
an additional -$2,962.00  Annual.
Down to         -$2,917.00  1/31/2017
With no apparent Benefit to the USA Taxpayer.

As of 1/31/2107
The above negative ratio indicates that
the USA is spending more money than produces. The Obama Administration and Congress is -$590 BILLION OVER THE 1 TRILLION 100 BILLION US 2016 BUDGET. Expressed as a percentage that is 53.6%
over budget. The Obama, US War chest is 548 Billion. The USA is not a healthy economy at this time. Americans Living in Poverty exceed 42 Million or 12.96%. Americans Living off Food Stamps is also over 42 Million. Both sets of number encompass different Americans with some duplication.


December 31, 2008 Comparison (year end)

US NATIONAL DEBT:

-10 TRILLION 447  BILLION

US GDP GROSS DOMESTIC PRODUCT:  

+13 TRILLION 976  BILLION  

US DEBT TO GDP RATIO: +35.46%

The above positive GDP Ratio reflects a USA economy that has produced more than it has spent.   


BOTTOM LINE:    1/31/2017

WORSE   2008 TO 12/31/2016      -41.83%
January 31,2017                            -41.15%

THE USA ECONOMY IS OVER     -40.00%
WORSE AS OF JANUARY 31, 2017  THAN
IT WAS IN DECEMBER 31, 2008. Improving
This does not include random Money printing.


AVERAGE INFLATION RATE
COMPARISON

YEARS                INFLATION RATE AVERAGE
      1/2017                    2.5%    Moderate Low
2009 TO 2016              1.4%    Recession

2000 TO 2008              2.9%    Moderate


America as a Democracy powered
by Capitalism should have a positive
"Growth At A Rate".
In order to do so a 2.5% Inflation Rate is Low and a 3.5% Inflation Rate is Moderate when compared to USA history and the current Global Economy. See World News page grid.
_______________________________________

EXIT BENCHMARK: 1/10/2017
USA Full Time Employment Needed:
1 Million 214 Thousand Americans
To get back to 2008 Actual Unemployed Level
_______________________________________
As of 1/10/2017:      EXIT BENCHMARK
US Budget Deficit: -5 Trillion 645 Billion
Social Security:    -15 Trillion 619 Billion
Medicare:              -27 Trillion 720 Billion
Additional Unfunded Liabilities+ National Debt
                               -55 Trillion 777 Billion
Liability Per USA Taxpayer
$875 Thousand 156 Dollars as of 1/10/2017


 

USA HOME BUYER
Currently there isn't any stable future for a real estate economy in the USA. All systems are go but the Federal Reserve Board isn't on board. The result of 2016 is +0.17%  a no growth year for real estate.

Benchmark growth for the USA real estate economy for approximately a 30 year period prior to 2008 market crash is and was about +7.5% annual.

If the FED does increase interest rates 3 times in 2017 the end result for a mortgage loan would be around 5.25% and maybe a little higher.

The real issue becomes affordability. There are over 1.5 million less people in the work force as there was in 2008. Also wages have been lowered from about $19.00  per hour to about $12.50 per hour. This excludes minimum wage workers and young adults entering the work force.
So in the final analysis it takes almost two people to earn what one person earned 10 years ago.

This affects real estate three ways. One, no value appreciation of the home to move up to the next home. FED raises interest rates, home value are down trending as of 1/1/2017. No excess cash to by cars and other larger cost items for the family. Not enough income to qualify for a higher interest rate loan for a home as a first time home buyer or move up buyer.
______________________________________
Trump Speculation per Thousand Dollars:
Trumps Initial Plan:
$1000.00  Earnings
  +280.00. Inflation at 3.5% over 8 years
$1280.00   Earnings in 8 years
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   $500.00   Expenses for the $1000. Earnings
   +140.00    Inflation at 3.5% over 8 years
   $640.00    Expenses in 8 years
______________________________________
   +$13,440. End Game per $1000.00 of Income
______________________________________
                    Benchmark for Real Estate                               Appreciation 7.5% Annual
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$100,000     Home Value 1/1/2017
$178,347     Estimated Value 1/1/2025
+$78,347     End Game Per $100,000
                    Real Estate Invested
______________________________________
$100,000     Stock Market Investment
$152,308      Yield Estimated at 5.4% Annual
+$52,308      Per $100,000 Invested in the market.
or
+   $5,230      Per $10,000 Invested in the market.
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PRODUCTIVITY JOB GROWTH

USA ANNUAL INFLATION RATE
Trump Target 2.5% to 3.5%

1/2017 +2.5%  Base of Moderate
2016 +1.3% Recession
2015 +0.1% Depression
2014 +1.6% Low


2016 is the 12 Month Average
from January through December.
Courtesy of RETV.News

Inflation Rates 2014-2015
Courtesy of
US Bureau Of Labor Statistics

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Compass

Market News

House

WILL EURO MARKET INVESTMENT YIELDS IMPROVE IN 2017? LOW MORTGAGE INTEREST RATES EDGE UP to 4.375%  FIRST TIME HOME BUYERS ARE CRUSHED BY FED AND MORTGAGE RATE HIKES 

REAL ESTATE

 INTEREST RATE HIKES
FED DRIVES HOME PRICES LOWER

FED RAISES PRIME RATE
DECEMBER 2016 
Mortgage Rates up 3/4%
USA HOUSING SALES 
 FOR JANUARY UP
+3.3%

USA AVERAGE HOME
QUICK QUALIFIER INFO
3/3/2017

Median Individual's Income
2017 - $30,062.
2000 - $28,408.
Estimated Average Family Income
2016 - $52,000
USA Home Median Price
12/31/2016- $232,200
Loan Amount $185,760

Income to Qualify with 20% Down $4333.33 Month (or $52,000. Annual)
Loan Rate 4.375% 30 due in 30 Yrs.
Payment $927.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1706.33 PITI and Debt per Month
Ratios
27.13 / 39.46
The reason the model above still qualifies with the higher interest rate of +0.875% is because home prices have decreased about -$13,800 since July 2016

Underwriting Variance is estimated
upward at +2%
Ratios
33 / 38

Cash Down Payment required is
estimated at $46,440. plus closing cost and cash reserves.

Note:
Red indicates a Potential Deficiency
Average Family Savings $10,140.00

Home Loan Point Cost Est Retail Rate
30/30 -417K 0% 4.30%
5/25 -417K 0% 3.35%
15/15 -417K 0% 3.51%
30/30 +418K 0% 4.23%
Point Cost 0%
FNMA FHLMC
Unknown
Commercial 10 Yr. Fixed Due in 20 $6,000,000. 0%  5.75%
Prime Rate 3.75%
Fannie Mae
60 Day Delivery 30/30 YR.
3.78%
3.65%
2.94%
  3/03/2017
  1/09/2017
  7/27/2016

USA HOME FORECLOSURES REPORTED

Foreclosure Filings in 2016 -17  512,475 v
              Courtesy of RETV.News
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000 
              Courtesy of Realty Track


SPECULATION:

Real estate economy needs to start growing immediately to grow America and all Americans future from the depression that it has been under for the past 8 years.

The stock market is moving forward as it is not yielding to the control of the FED.

The real estate market is and always has been under the influence of the FED's decisions 

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