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STOCK MARKET
The Stock Market indicates there is approximately a 36% chance of a FED Interest Rate Hike in September. Wall Street says that the FED's Signal is, that if a rate hike is not initiated in September there is an additional 64% chance that the FED will increase interest rates between October and December 2016.
THE GLOBAL MARKET
The Global market overall is a lack luster investment today and in the near future. Wall Street in all probability will start making yield adjustments for 2017 in the last quarter of 2016.
GOVERNMENT
The Federal Reserve Board has not shown any indication that it intends to lower the increased FED Debt incurred from 2009 to 2016 of approximately 3.5 Trillion Dollars. The lowering of FED Debt would boost the USA Economy.
The current Administration answer is print more currency and put it in circulation. Currently the Money Supply has been increased 858 Billion for 2016.
The New Print the Mint US Government Money security is again the American Taxpayer. It is likely that the New Print Money may top 1 Trillion Dollars by the end of 2016 at the current rate of printing.
The result is Debt on top of Debt with no apparent benefit to American's or America.
Speculation:
Any rise in interest rates by the FED may further depress Wall Street Financial Markets. The USA Real Estate Economy that is barely treading water could be affected more dramatically.
A 2016 Federal Reserve Interest Rate Hike may have the same type of effect on USA Financial Markets as the December 16, 2015 Prime Lending Rate Hike.
Although, this time, with the current informal notice by the FED to Wall Street, that appears to be the signal of intent by the FED. This i possibly to allow time for the Wall Street companies to make adjustments over the next quarter.
Investor impact could be as severe as investors experienced in 2015. This is when Janet Yellen and the FED increased the prime lending rate on December 16, 2015 that resulted in a USA Financial Market Crash on December 18, and the first quarter of 2016.
In addition such a Rate Hike will affect USA Consumer Confidence adversely. The result could be a worsening to the existing Real Estate Markets that are at a struggle to keep above the 0.00% Existing Home Sale Level on a continuing basis.
STOCK MARKET
Currently the Wall Street is primarily a "Buy Down" market if you expect a yield for 2016.
A FUTURE FINANCIAL OUTLOOK
Country's and Global Economies do not grow in a month or a quarter, they grow over years and stabilize from year to year. Then their performance can be guaged quarterly or semi- annually.
The USA has not had "growth at a rate" for the last 7 years. All Americans have been impacted. The middle class was diminished in the area of Wages, Assets and Retirement and no recovery measures have been put in place.
The USA economy under the current Administration has reached an implosion level (Liabilities exceed Assets) in 2016 that was forecast not to occur until 2022 at the earliest.
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USA ECONOMIC DATA AS OF
August 31, 2016
August 30, 2016
US NATIONAL DEBT:
-$19 TRILLION 440 BILLION
US GDP GROSS DOMESTIC
PRODUCT:
+$18 TRILLION 499 BILLION
US DEBT TO GDP RATIO: -105.37%
Failing Result
The above negative ratio indicates that
the USA is Spending more money than Produces.
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Compare
December 31, 2008
US NATIONAL DEBT:
-10 TRILLION 447 BILLION
US GDP GROSS DOMESTIC PRODUCT:
+13 TRILLION 976 BILLION
US DEBT TO GDP RATIO: +35.46%
Good Result
The above positive GDP Ratio reflects a USA economy that has Produced more than it has Spent.
BOTTOM LINE: 8/31/2016
WORSE 2008 TO 8/2016-40.74%
THE USA ECONOMY IS OVER -40.74%
"PERCENT" WORSE AS OF AUGUST 30, 2016 THAN IT WAS IN DECEMBER 31, 2008.
AVERAGE INFLATION RATE
COMPARISON
YEARS INFLATION RATE AVERAGE
2000 TO 2008 2.9% Moderate
2009 TO 2016 (August) 1.1% Depressionary
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.
Note: The actual cost of the Mortgage Crisis was less than 1 Trillion dollars that is shown in the National Debt figure for 12/31/2008.
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REAL ESTATE MARKET
According to the National Association of Realtors Existing Home Sales are Down -3.2% in July. This is a definite sign of a unstable and slowing USA economy.
The National Association Of Realtors current reports from January 1, 2016 to July 31, 2016 clearly demonstrate a volatile and continuing poor US Real Estate Economy. Currently there are no stable signs of recovery from 2008 even when interest rates are at all time low levels.
Average Real Estate Growth for 2016 is -0.2%.
Courtesy of RETV.News.
ANALYSIS
The US Real Estate economy has not and is not improving on a Annual ongoing basis.
The superficial Low Interest Rates that are being controlled by the current Administration through the Fannie Mae and Freddie Mac Bank Conservatorships have not improved the Existing Home Sale growth in the USA for 2016.
FEDERAL RESERVE BOARD
REAL ESTATE FUTURES
The Federal Reserve Board Chair Janet Yellen
a Democratic Appointee indicates she intends to support an Interest Rate Hike at the September 20 and 21, 2016 meeting. Yellen cites solid Job Growth and Inflation.
USA Inflation Rate for 2016 is +1.1%.
This Rate is at a Depressionary Level for any Country.
The Inflation Rate for 2015 was +0.1%.
This rate is at a Depression Level for any Country.
The Benchmark for a Growing out of a Depressionary Economy in America is an Inflation Rate of approximately +3.5%.
Job Growth has not yet reached its benchmark level set prior to 2008. The Job Market is still short -500,000 jobs or more according to the Bureau of Labor Statistics through July 2016.
The Fed Chair Janet Yellen continues to circumvent any questions regarding the economy and why America has not improved.
Why are middle class American's not investing in Real Estate, "The American Dream"?
The answer is simple; the middle income level does not provide enough family assets for this type of investment to be available to Americans today.
US Bureau Of Labor Statistics Reports
PRODUCER PRICE INDEX:
In July, the index for final demand services fell 0.3 percent. Prices for final demand goods declined 0.4 percent.
CONSUMER PRICE INDEX:
The index for all items less food and energy rose 0.1 percent in July after increasing 0.2 percent in June.
Excerpts from August 31,2016
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Depression by Defination:
It is a more severe downturn than an economic recession, which is a slowdown in economic activity over the course of a normal business cycle.
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USA AVERAGE HOME
QUICK QUALIFIER INFO
8/31/2016
Median Individual's Income
2016 - $30,408.
2000 - $28,408.
Estimated Average Family Income
2016 - $52,000
Home Average Price
7/2016 - $244,100.
Income to Qualify with 20% Down $4333.33 Month (or $52,000. Annual)
Loan Rate 3.5% 30 due in 30 Yrs.
Payment $891.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1679.34 PITI and Debt per Month
Underwriting Variance is estimated
upward at +2%
Housing and Debt Ratio's
26.30 / 38.61
Cash Down Payment required is
estimated at $48,820. Plus closing cost and cash reserves.
Note:
Red indicates a Potential Deficiency
Average Family Savings $10,075.00
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| Home Loan |
Wholesale |
Retail Rate |
| 30/30 -417K |
3.62% ^ |
3.625% |
| 5/25 -417K |
2.84% v |
3.250% |
| 15/15 -417K |
2.95% ^ |
3.375% |
| 30/30 +418K |
3.62% v |
3.999% |
| Point Cost |
0%
FNMA FHLMC |
Unknown |
| Commercial 10 Yr. Fixed Due in 20 $6,000,000. |
0 Cost |
5.375% |
| Prime Rate |
3.50% |
unchanged |
Fannie Mae
60 Day Delivery 30/30 YR. |
2.92% |
8/24/2016 |
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HISTORY REPEATS ITSELF
8/31/2016
Foreclosures are up 56.25%
Compare 2014-2015 to 2004
Foreclosure Filings are Up and on track to reach the 1 Million 100 Thousand range for the 3rd straight year.
Foreclosure Filings in 2016 - 520,895
Courtsey of RETV.News
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000
Courtesy of Realty Track
Compare
Foreclosure Filings in 2004 - 640,000
Non Bubble Benchmark Years
Courtesy RETV.News. News.
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SPECULATION:
Higher interest rates bring less involvement in Real Estate, Homes and all other financeable consumer products.
High end homes, New Homes and Multi-Multi-Million Dollar Properties sales are slowing.
Middle class America Homes have been foreclosed or that are in foreclosure, have not gone down in 2014-2015 and appear to be continuing for 2016.
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