Wall Street: STOCK MARKET
The slight upward swing on Wall Street may be short lived if the Federal Reserve Board ignores its own agenda.
Will the USA Financial Markets rally toward America and American investment opportunities to avoid the Global slump?
That would be good for America's future at this time to have to have USA Capital reinvested in America and American's future.
THE GLOBAL MARKET
The Global market is volatile and has continuing negative interest rate exposure and low Bond yields.
The Federal Reserve Board Democratic Appointee Janet Yellen, Chair has indicated that a FED prerequisite to considering raising the Prime Lending Rate again is that the USA Economy would have a 2.0% Inflation Rate.
Currently the Annual Average Inflation Rate for the USA is 1.14% as of October 2016.
The October 2016 Monthly Inflation Rate is 1.6%.
The current upswing in the USA Inflation Rate is primarily from the Production of Products for Christmas Orders. In January 2017 through the first quarter, it will probably decrease back to the 1.14% Average Annual Inflation Rate for 2016.
The USA Inflation Rate is unlikely to reach the 2.0% in November or December, but it is possible.
The actual Average Annual Inflation Rate at this time based on the last 4 year history has never reached 2.0%.
A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint: It appears that since the likely hood of the Annual Inflation Rate average will not reach 2.0% Annual, for 2016, or may not reach a 2.0% monthly level, the FED has already taken interest rate action.
Mortgage Interest Rates are up about 3/4% in the last three months. A 30 year fully amortized mortgage loan is at about 4.25% with costs to the average home buyer today.
It appears, that the current Administration, has utilized the Government Conservator-ship of Fannie Mae and Freddie Mac since 2008 to leverage the +3/4% recent increase in mortgage interest rates.
The Mortgage Interest Rate for real estate loans to be acquired have been increased by Fannie Mae and Freddie Mac +3/4% in the last 3 months independent of the FED's threat of raising the Prime Lending Rate if the Inflation Rate reached 2.0%.
Fannie Mae and Freddie Mac are the two largest Mortgage Banks in the USA.
USA ECONOMIC DATA AS OF
November 28, 2016
November 28, 2016
US NATIONAL DEBT:
-$19 TRILLION 906 BILLION
30 DAYS UP -$499 BILLION
US GDP GROSS DOMESTIC
+$18 TRILLION 713 BILLION
30 DAYS UP +$364 BILLION
US DEBT TO GDP RATIO: -106.37%
UP IN LAST 30 DAYS
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 BUDGET. Expressed as a percentage that is 53.6%
USA is not a healthy economy at this time.
December 31, 2008 Comparison
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: 11/28/2016
WORSE 2008 TO 2016 -41.83%
THE USA ECONOMY IS OVER - 40%
WORSE AS OF NOVEMBER 28, 2016 THAN
IT WAS IN DECEMBER 31, 2008.
AVERAGE INFLATION RATE
YEARS INFLATION RATE AVERAGE
2000 TO 2008 2.9% Moderate
2009 TO 2016 (Oct) 1.1% Recession
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.
USA REAL ESTATE SALES
The volatile 2016 USA Real Estate Market has not improved over 2015. This aligns with the entire USA Economy as the fourth consecutive down year.
ANALYSIS: What's the problem with the economy and real estate growth?
In 11/2008 there was 13 Million 500 Thousand
Actual Unemployed Americans.
In 11/2012 there were 22 Million 504 Thousand.
In 11/2016 there are 15 Million 105 Thousand, Actual Unemployed with lower wages.
USA ANNUAL INFLATION RATE
2016 + 1.14
2015 + 0.1
2014 + 1.6
2013 + 1.5
Inflation Rates 2013-2014-2015
US Bureau Of Labor Statistics
2016 is a 10 Month Average
from January through October.
Courtesy of RETV.News
REAL ESTATE FUTURES - Prime Rate
The Federal Reserve Board meeting on July 26th and 27th 2016 concluded:
FED-FOMC Press Release Excerpt ~ The Federal Open Market Committee reaffirmed its "Statement on Longer-Run Goals and Monetary Policy Strategy...
Following further Committee discussion regarding the most appropriate way to express this clarification, the statement has been amended to indicate that the "Committee would be concerned if inflation were running persistently above or below" its 2 percent objective.
The Benchmark for a Growing Economy in America is a Inflation Rate of +3.5%. The 2016 Annual Projection for the USA Inflation Rate is +1.1%. (with no standing Inventory).
USA AVERAGE HOME
QUICK QUALIFIER INFO
Median Individual's Income
2016 - $30,555.
2000 - $28,408.
Estimated Average Family Income
2016 - $52,000
USA Home Median Price
Loan Amount $185,760
Income to Qualify with 20% Down $4333.33 Month (or $52,000. Annual)
Loan Rate 4.25% 30 due in 30 Yrs.
Payment $914.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1696.33 PITI and Debt per Month
26.83 / 39.15
The reason the model above still qualifies with the higher interest rate of +0.75% is because home prices have decreased about -$11,800 since July 2016
Underwriting Variance is estimated
upward at +2%
33 / 38
Cash Down Payment required is
estimated at $46,440. plus closing cost and cash reserves.
Red indicates a Potential Deficiency
Average Family Savings $9,396.00
|Commercial 10 Yr. Fixed Due in 20 $6,000,000.
60 Day Delivery 30/30 YR.
USA HOME FORECLOSURES REPORTED
Foreclosure Filings in 2016 - 520,535
January through November 2016
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000
Courtesy of Realty Track
The Real Estate future in America is -7.0% percent below the historic national annual average benchmark before 2009,
Low interest Rates have been keeping the Home Sales Markets at just about zero percent better than 2015.
In all probability if
the Fed raises the Prime Lending Rate both the Stock and Bond Markets and Real Estate will cease to recover from their zero percent average for 2016.
The Real Estate Markets may De-stabilize again with a Prime Lending Rate increase, because qualifying for a home loan or a commercial loan will become more difficult for the borrower.
Consumer confidence is not expected to increase from the impact of this type of FED action.