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DAYTONA REAL ESTATE INVESTMENT NEWS

Daytona USA Inflation News ~ June 1, 2017
Markets ~ Just The Facts


NEWS BRIEF


Wall Street: 
Wall Streets 2017 Volume Up 5.7%
Current High Investment Yields


US Federal Reserve Bank:
Christmas Orders to Increase GDP Growth
A Prime Rate and Federal Funds Target Rate
increase will downtrend 2017 USA economics.

Slide Show:
America's Future June 2017

Real Estate: 2017


Real Estate:
How Much Home Can You Own
Who can Buy an Average Home in America?
Simple Analysis of FHA Financing at 97.5%.

Wall Street
America's Future
Statistics & Comments
How Much Home Can You Own

 

Wall Street: Up 5.7%
Price to Earnings "PE" Ratio's
Leverage simply put, if a Company has one million dollars in earnings it can be indebted on the Stock and Bond Markets for up to Twenty Million Dollars or more per million.

Actual formula: If the Stock has a earnings value in the last 12 months is/up $1.00 a share for one million shares and the Stock is selling at $20.00 a share then your PE is 20 or 20 million dollars. Inflate the PE to 25 to get a twenty five million dollar value.

In comparison, if a Real Estate Investment had a value of one million dollars could you get a loan to in-debt the Real Estate for twenty million dollars or twenty five million and call it a good investment?

Dow Industrials have increased volume from about 19,900 in January 2017 to 21,053 as of 5/30/2017 or has inflated about  +5.7 %. The Wall Street ink is still red and wet overall.

THE GLOBAL MARKET: Up 9.3%
Global Industrials have increased their volume from about 25,750 in January 2017 to 27,610 as of 5/30/2017 or has inflated about  +9.3 %. The ink is still red.

GOVERNMENT: Prejudice
FED Chair Janet Yellen a Democratic Appointee
of the past Administration and the FED Governors will look back to the 2016 GDP results as part of their decision making process to move forward with the FEDS proposed agenda of Interest Rate Hikes without cause.

In the 1st quarter and 2nd quarter of 2016 the GDP growth was Under -1% very low. In the the third quarter the 2016 GDP was slightly Over +1% growth, low, considering as this is a normal annual upswing in production due to Christmas orders. The fourth quarter reached 2.1% as a result of Christmas orders and the normal boost by Politics in any election year to be re elected.

The FED raised interest rates at the March 2017 meeting as they looked forward to the June 14, 2017 meeting, considering the possibility of another rate increase. If the FED raises interest rates it would be for the second time in 2017 and would probably result in the continued downturn of the USA economy. The FED appears to be changing their focus to whatever figures accomodate the FED's agenda and not Americas best interest. Such as the Unemployment Insure Benefit Rate easing down and not 40 hour a week jobs at a economic level to fuel the USA economy.

This type of attitude by the FED seemingly makes it improbable for the current administration to achieve any success to improve Americans and America's economic status.

2017 FED Results:
Inflation
5.70% Wall Street Volume increase.
9.30% Global Market Volume increase.

Deflation
0.40% USA Existing Home Sales Ave. ~ Flat
           Off -7.10% USA Benchmark estimate

0.17% USA Retail Sales Average ~ Decrease
           Off -4.83% USA Benchmark estimate

_______________________________________

A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint: 
The FED has not provided any stimulus to America or the American people to increase the USA purchasing power in the past 3 years. The FED has made moves to take any financial benefit to Americans off the table.

As of May 2017 the FED has still abandoned Main Street America and has their focus set on Wall Street. 
_______________________________________

REAL ESTATE FUTURES EXPANDED:
Prime Lending Rate: 4.0%
Mortgage Interest Rates ease down  from 4.25% during May 2017 to 4.00%.

Speculation to increase purchasing power:
What can be done at this late date to benefit the USA economy and give Americans some purchasing power to fuel the retail sales markets.?

One avenue would be develop expanded Home Equity guidelines for 1st and 2nd Mortgages and Cash Out Programs, for existing home owners to access capital. This may spur retail sales and home sales, growth and new small business opportunity and big business employment, regenerating the USA economy.

Another avenue would be modify existing lending guidelines to influence re-investment into the real estate market such as for the "First Time Home Buyer" or a Buyer re-entering the Home Ownership market.

Partial Reprint of May 3, 2017
Higher interest rates is not the answer. Rates need to decrease under 4% to bring the market back to a growth level anytime soon. A possible scenario that may work would be back up to the growth level of the 3.50% 30 years rates as they were in mid 2016. Then look at easing them up annually at .25% if necessary, to maintain a healthy level of growth in the real estate market.


_______________________________________

 

USA ECONOMIC DATA AS OF 
 up to June 1, 2017


June 1, 2017
The TRUMP Trek begins to Restore America.
Obama leaves a trail of Debt for Americans.

US NATIONAL DEBT: SINCE 1-20-2017

-$19 TRILLION 927 BILLION Down
120 DAYS  Down  -$53 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 120 days!

US GDP GROSS DOMESTIC
PRODUCT:

+$18 TRILLION 986 BILLION
Last 120 DAYS Up +76 BILLION

US DEBT TO GDP RATIO: -104.49%
Improved in last 120 days +1.88%
USA Debt exceeds USA Income.


Obama has increased the USA Dollar Supply
-963 Billion in 12/31/2016 
-778 Billion       6/01/2017 Improved
 185 Billion less dollars printed
in the last 120 days. IMPROVED 20% Lower

Cost to each Taxpayer 12/31/2017
an additional -$2,962.00  Annual.
Down to         -$2,369.00  6/01/2017 est.
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 -$592 BILLION OVER THE 1 TRILLION 100 BILLION US 2016 BUDGET. Expressed as a percentage that is
53.81% ^
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 41 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
2017  Average.            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: 3/28/2017
USA Full Time Employment Needed:
1 Million 215 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
NEXT ANALYSIS 1/10/2018


 

USA HOME BUYER AND SELLERS  
The USA National Average for Home Ownership and Loan Programs exceed how much home the average American can buy due to out of date underwriting guidelines.

Average American Statistics as of 6/1/2017:
FHA
Credit Score 620+ Minimum 3 Credit Bureaus
$9,254. Savings*
$7,000. FHA Down Payment  3.5%*
$6,000. FHA Seller Credit for Closing Cost est.
$193,000. Loan Amount
      4.00% Interest Rate at 0 Points
   $921.00 30/30 Year FHA Loan
   $200.00 Property Taxes and Insurance
   $533.33  Other Credit Debt
_________
 $1654.33
 3 Months Cash Reserves Required
 $4962.99 Cash Reserves for $200,000 Purchase
 $2254.00*Cash Available for Reserves
_________
-$2708.99 Short fall on FHA Cash Reserves

FHA Scenario Analysis:
How much home, can you buy? $75,000

In order to meet the Cash Reserves Requirements your loan amount and purchase price drops to about $75,000. Yes, Cash Reserves are one of the hard fast rules for FHA financing. Cash Reserves are necessary because of the high loan 97.5%, to value.

Income: $56,516. Annual for $193,000 Mtg.
This is for the  FHA $193,000 Loan amount that a buyer would need if you meet the FHA Cash Reserve Requirements(s).

The Qualifing Ratios for FHA Loans are 31% Housing and 43% Housing and Overalll Debt Ratio.

National Averages for the above scenario:
$ 236,400 Median Home Price
$ 189,120 Loan Amount with 20% Down
$   56,516 Income
$   47,280 Down Payment
            30%  Principal/Interest Ratio
            37%  All Debt Ratio

______________________________________
Trump Speculation per Thousand Dollars:
Trumps Initial Plan Per:
$1000.00  Earnings
  +280.00. Inflation at 3.5% over 8 years
$1280.00   Earnings in 8 years
______________________________________
   $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
______________________________________

$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.
_______________________________________

PRODUCTIVITY JOB GROWTH

USA ANNUAL INFLATION RATE
Trump Target 2.5% to 3.5%

2017 +2.45% Base of Moderate
2016 +1.3% Recession
2015 +0.1% Depression
2014 +1.6% Recession


2017 is a 4 Month Average
for January through April 2017.
Courtesy of
RETV.News

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

_______________________________________

Compass

Market News

House

 EURO MARKET INVESTMENT YIELDS  RUN  UP WITH WALL STREET LOW MORTGAGE INTEREST RATES EASE DOWN IN APRIL 2017  HOME SALES  DOWN AGAIN

REAL ESTATE APRIL 2017
  HOME PRICES LOWER AS
RATES EASE TO 4.0%

Real Estate headed for Negative Growth


FED MAY RAISE PRIME RATE
TWO MORE TIMES IN 2017
AS USA REAL ESTATE AND
RETAIL SALES DIMINISH TO ZERO

Next FED Meeting June 14, 2017

  


USA HOUSING SALES DOWN -2.3% 
FOR APRIL 2017
 FOR FIRST FOUR MONTH AVERAGE
FOR  2017 IS + 0.40%

Real Estate Growth Non-Existant

USA AVERAGE HOME
QUICK QUALIFIER INFO
4/30/2017

Median Individual's Income
2017 - $30,125. v
2000 - $28,408. =
Estimated Average Family Income
2016 - $56,516
USA Home Median Price
3/31/2017 $236,400
Loan Amount $189,120

Income to Qualify with 20% Down $4709.66 Month (or $56,516. Annual)
Loan Rate 4.20% 30 due in 30 Yrs.
Payment $925.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1707.33 PITI and Debt per Month
Ratios
24.92 / 36.24
The reason the model above still qualifies with the higher interest rate of +1.0% is because home prices have decreased about -$9,600 since July 2016

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

Cash Down Payment required is
estimated at $47,280. plus closing cost and cash reserves.

Note:
Red indicates a Potential Deficiency
Average Family Savings $9,550.00 v

Home Loan Point Cost Est Retail Rate
30/30 - 417K 0% 4.15%
5/25  - 417K 0% 3.25%
15/15 - 417K 0% 3.42%
30/30 +418K 0% 4.07%
Point Cost Lowers Rate
FNMA FHLMC
Retail
Averaged Rate
Commercial 7 Yr. Fixed Due in 20 $6,000,000. 0%  5.65%
Prime Rate 4.00%
Fannie Mae
60 Day Delivery 30/30 YR.
3.49%
3.65%
2.94%
  5/26/2017
  1/09/2017
  7/27/2016

USA HOME FORECLOSURES REPORTED

Foreclosure Filings as of June 2017  505,124 v
Note:The above figure does not include defaults,auctions and repositions as shown  in the annual figures below.
         Courtesy of RETV.News. 6/1/2017

Foreclosure Filings in 2016 -    933,045
Foreclosure
Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000 
              Courtesy of Realty Track


SPECULATION JUNE TO DECEMBER 2017:

Americans are in the tight squeeze as the governments controls basically minimize the ability to have the of Home Ownership. Middle income or working Americans are finding out that Home Ownership is really becoming an "American Dream" as Americans are not being allowed to participate in a USA Democracy and Capitalistic economy.

The FED and its resources including Fannie Mae and Freddie Mac that are still under government conservatorship after 8 years of the resolved  mortgage crises. The government is manipulating the numbers, apparently, utilizing interest rates primarily to deflate the Home Sales Market since Mid June 2016.  

These measures have been used as a control during the preceding socialist focused administration from 2009-2016 and have not worked to stimulate growth.

Partial Reprint of May 2017
Fannie Mae and Freddie Mac are the two largest Mortgage Banks in the USA. Both are still under the US Government Conservator ship.

The result is, that mortgage interest rates are not in really moving with the market. They are moving under the control of the Government.

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