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Wall Street: STOCK MARKET
Since the Trump victory on November 8, 2016 Wall Streets Stock and Bond Markets have reacted favorably. Basically, this is because of the Trump Stimulus Plan for the USA. In the final analysis Wall Street ended on a upswing for the last 2 months of 2016. To date the FED Interest Rate Hike has only affected the USA Real Estate Markets.
THE GLOBAL MARKET
The Global market is volatile and flat. Currency yields are only worth what a perspective buyer will pay.
GOVERNMENT
The Federal Reserve Board Democratic Appointee Janet Yellen, Chair has again gone back on the FED's position on the USA economy. The Fed raised the Prime Lending Rate December 14, 2016 to 3.75%, by adjusting the Federal Funds Rate up a +1/4%. When this occurred in December 2015 the Stock Market Crashed and Real Estate Market went under water -7.1% in February 2016. The FED's Rate Increases has again suppressed a emerging growth Real Estate Market in the last quarter of 2016. The emerging First Time Home Buyers
declined, back into their shell by December 2016.
The Inflation Rate for the USA for the month of November, 2016 is +1.69%. Annual Inflation Rate for the USA is +1.19% from January 1, 2016 to November 30,2016. Courtesy of RETVNews.
The actual Average Annual Inflation Rate at this time based on the last 4 year history has never reached 2.0%. The FED indicated Mid Year 2016 they would not increase interest rates unless the USA Inflation Rate reached 2.0%.
A FUTURE FINANCIAL OUTLOOK
Editors Viewpoint:
The Nationwide Real Estate Interest Rate Hike imposed by the FED in the last quarter of 2016 and mid-December 2016 has again suppressed the First Time Home Buyer that had begun to emerge after 4 years. More of the Real Estate Market may continue to be suppressed by the current administration.
Mortgage Interest Rates are up about 3/4% in the last four months. A 30 year fully amortized mortgage loan is at about 4.25% plus cost of closing, to the average home buyer today. That is up from 3.5% from in August 2016.
It appears, that the current Obama Administration, has utilized the Government Conservator-ship leverage, over Fannie Mae and Freddie Mac, that has been under control of the administration since 2008, to curtail any 2016-2017 Real Estate Market Recovery.
Fannie Mae and Freddie Mac are the two largest Mortgage Banks in the USA.
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REAL ESTATE FUTURES - The Prime Rate
As the USA Real Estate economy tries to emerge the FEDERAL RESERVE BOARD and current Obama Administration continues to suppress the growth of "The American Dream" and America's economy as a whole, to its end in office.
Is the worst is yet to come? Yes.
Janet Yellen, the FED Chair, a Obama Democratic Appointee has indicated that the FED will move to increase Interest Rates Three Times in 2017. This attempt may be a crashing blow to the new Trump economy as it tries to emerge.
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USA ECONOMIC DATA AS OF
January 9, 2017
January 9, 2017
US NATIONAL DEBT:
-$19 TRILLION 954 BILLION
30 DAYS UP -$48 BILLION
National Debt Notes
In 2008 the National Debt as of January 9, 2008 was 9 Trillion 630 Billion. The National Debt has more than Doubled in the last 9 years.
US GDP GROSS DOMESTIC
PRODUCT:
+$18 TRILLION 758 BILLION
30 DAYS UP +$45 BILLION
US DEBT TO GDP RATIO: -106.37%
Debt exceeds USA Income.
UNCHANGED IN LAST 30 DAYS
Obama has increased the USA Dollar Supply
-963 Billion in 2016 - Cost to each Taxpayer
an additional -$2,962.00 Annual. With no apparent Benefit to the USA Taxpayer.
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 USA is not a healthy economy at this time.
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: 1/09/2017
WORSE 2008 TO 2016 -41.83%
THE USA ECONOMY IS OVER - 40%
WORSE AS OF JANUARY 9,2017 THAN
IT WAS IN DECEMBER 31, 2008.
This does not include random Money printing.
AVERAGE INFLATION RATE
COMPARISON
YEARS INFLATION RATE AVERAGE
2000 TO 2008 2.9% Moderate
2009 TO 2016 (Nov) 1.19% 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.
Obama Administration 1-10-2017
Just over 1/3 of the USA Workforce is employed over 35 hours or Full Time.
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
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USA NEW ADMINISTRATION: 2017
Trumps biggest problem with the USA economy is yet to be seen by the American people.
The out going Obama Administration during its term has installed key socialist personnel, as they forcasted that Hillary Clinton would carry the Democratic Socialist Plan forward. These personnel blocks will slow the end result that Trump wants to accomplish quickly to give the USA people some relief from the depression like conditions, Americans have been experiencing for the last 8 years.
The Democratic Socialist Party is within the Democratic Party itself which has two viewpoints.
Now there is the Democrat Bernie Sanders approach. It appeared that Sanders was burned by the Democratic Socialist Party, Clinton/Obama during the campaign. None the less Sanders caved in on all his principles to the Clinton campaign at the end. That is what Clinton counted on.
Sanders views are a little more parallel with that of President Elect Donald Trump. Simply put Sanders wanted to double the minimum wage for Americans.Sounds good but in the final analysis who can afford to pay it when you already have a Country that is in a depression according to the numbers.
Trump professes that the USA economy needs a internal Stimulus Plan. Trump is looking to American Company's to begin producing American products again and the unionizing of help resulting in higher wages.
Let's simply look at what Trumps results could be to each American per each:
$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
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+$13,440. End Game per $1000.00 of Income
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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
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$100,000 Stock Market Investment
$152,308 Yield Estimated at 5.4% Annual
+$52,308 Per $100,000 Invested in the Mkt.
or
+ $5,230 Per $10,000 Invested in the Mkt.
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It's all good in theory once Trumps gets the Democtratic Socialist Blocks out of the way. That could take 6 months to 2 years.
| FUTURE INCOME |
JOB STABILITY |
USA ANNUAL INFLATION RATE
Average
2016 + 1.19
2015 + 0.1
2014 + 1.6
2013 + 1.5
Inflation Rates 2013-2014-2015
Courtesy of
US Bureau Of Labor Statistics
2016 is a 10 Month Average
from January through November.
Courtesy of RETV.News
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USA AVERAGE HOME
QUICK QUALIFIER INFO
1/10/2017
Median Individual's Income
2016 - $30,029.
2000 - $28,408.
Estimated Average Family Income
2016 - $52,000
USA Home Median Price
11/2016- $234,900
Loan Amount $187,920
Income to Qualify with 20% Down $4333.33 Month (or $52,000. Annual)
Loan Rate 4.25% 30 due in 30 Yrs.
Payment $924.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1706.33 PITI and Debt per Month
Ratios
27.06 / 39.37
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 $46,980. plus closing cost and cash reserves.
Note:
Red indicates a Potential Deficiency
Average Family Savings $10,140.00
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| Home Loan |
Wholesale |
Retail Rate |
| 30/30 -417K |
% |
4.25% |
| 5/25 -417K |
% |
3.25% |
| 15/15 -417K |
% |
3.50% |
| 30/30 +418K |
% |
4.375% |
| Point Cost |
0%
FNMA FHLMC |
Unknown |
| Commercial 10 Yr. Fixed Due in 20 $6,000,000. |
0 Pt.Cost |
5.875% |
| Prime Rate |
3.75% |
UP +.25 |
Fannie Mae
60 Day Delivery 30/30 YR. |
3.65%
2.94% |
1/9/2017
7/27/2016 |
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USA HOME FORECLOSURES REPORTED
Foreclosure Filings in 2016 - 517,198
Courtesy of RETVNews
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000
Courtesy of Realty Track
SPECULATION:
December 14, 2016
The Real Estate future in America is -7.5 percent below the historic national annual average benchmark before 2009,
Low interest Rates have been keeping the Home Sales Markets in focus since 2015.
The Real Estate Markets may de-stabilize again with more Prime Lending Rate increases, because qualifying for a home loan or a commercial loan will become more difficult for the borrower and Home Prices will be driven lower.
Consumer confidence is not expected to increase in the Major Markets from the impact of this type of FED action.
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