Seattle Low Income Housing

Capitol Hill Housing poses the following thought:

Imagine you were hit with an unexpected medical bill for $400. Would you pay it off in cash? Put it on your credit card? When the Federal Reserve asked American consumers this question, a shocking 47% of respondents said they would not be able to cover an expense of that size.

The survey points to a troubling reality: many people across the country are living paycheck to paycheck. In Seattle, there are over 40,000 low-income households spending more than half of their income on housing, squeezed more and more as rents rise.

When most of your earnings go to keeping a roof over your head, the line between being stably housed and on the street can be very fine. Back in July of 2015, the Committee to End Homelessness in King County presented a study showing that an increase of only $100 in median rent corresponded to a 15% increase in the homeless population.

I am often asked what role CHH has in addressing the homelessness crisis. The answer? A large one. We don't run homeless shelters, or tent cities, or conduct outreach. But we do own or manage over 1,400 affordable units across the city, and for many of our residents, an affordable place to rent is the difference that keeps them off the street.

We also know that getting people into housing is often only the first step on their journey home. Our resident services staff works tirelessly to connect tenants to resources and opportunities in the community. And when folks fall on times of financial hardship, we provide emergency one-time rental assistance to those who complete a financial education class, to try and keep as many people in their homes as possible.

For families that are making just enough to scrape by, quality, affordable homes close to jobs and public transit can make a world of difference. Next year we are excited to break ground on the 115-unit Liberty Bank Building project, our largest yet. It represents our commitment to make sure that as Seattle grows and changes, we continue to offer housing for people at all income levels. When growth happens, it should help lift all residents, not push some out. 

Chris Persons returned from his three-month sabbatical this week, so this will be my last time on the soapbox. We're all glad he had some time to recharge his batteries, but also excited to welcome him back. May his renewed energy be infectious as we rise to meet new challenges and opportunities in our ongoing fight to keep Seattle affordable for all.

Today's blog courtesy of Jill Fleming, Acting CEO, Capitol Hil Housing

Happy Investing.

Federal Reserve Rates

Have you heard references to the Federal Reserve or "the Fed" in the news? These reports usually pertain to the Fed's raising or lowering of interest rates. The impacts of a rate decision can vary. Here are a few things to remember:

• The Fed sets target rates for bank-to-bank and Fed-to-bank loans.
• The Fed does not directly control fixed mortgage rates. In fact, fixed mortgage rates can change well in advance as the market anticipates any adjustments.
• The prime rate is directly influenced by Fed moves. This rate is often used as the benchmark for interest charged on credit cards, auto loans and Home Equity Lines of Credit (HELOCs).

There's talk that the Fed may raise rates before the end of the year. That may make this a good time to "lock in" a low rate on a purchase if you’re so inclined. Existing owners may want to consider refinancing or combining adjustable rate loans like HELOCs or even consumer debt into one low fixed rate. Consolidating debt is not for everyone, but talk with your local lender to decide what is best for you.

Happy Investing!

Today's blog courtesy of Cheryl Taylor, American Pacific Lending

The Cost of Money

Weekly Interest Rate Recap for the week ending 6/17/16
Mortgage rates decreased throughout the week last week as concerns over Great Britain leaving the European Union mounted, and due to some extremely dovish tones coming out of the Fed Meeting on Wednesday. Mortgage rates bottomed out on Friday though, however it looks like most of that was due to profit taking in the mortgage bond versus any real news events.

Per the latest polls in Great Britain, it's looking more and more likely that Brexit will occur this Thursday the 23rd. The British populous will vote on Thursday to remain in the EU, or go independent. The concern in in the equity markets is that if Great Britain pulls out of the EU, will Germany follow?... and without it's two economic cornerstones, will the EU crumble sending Europe into recession. That line of concern has money flowing out of the equity markets, and into the safe haven of investments like the US Mortgage Bond, which subsequently sends US mortgage interest rates lower.

Propelling mortgage rates even lower was interest-rate-friendly speak coming from Janet Yellen on Wednesday. Long story short, the Fed is considerably more pessimistic about US economic growth than they have been in meetings past. They downgraded 2016, 2017, and 2018 growth estimates in GDP, as well as inflation. They also reduced their target interest rates by about half a percent from previous estimates in each of those years as well. The Fed cited lack of inflation and slowing growth in the labor markets as their reasons for leaving the Fed Funds Rate unchanged for now and seemingly the near future.

In light of the Fed Meeting and Janet Yellen's ensuing speech, I want to revisit my blog from last week. In summary, I proposed that I can't see interest rates going much higher from where they are now in the foreseeable future if for no other reason than because no Fed Chair or Member wants to be the goat for sending the US Economy back into recession. Thus, they are forced to always error on the side of relaxed monetary policy - ie. Tie goes to Not-Raising-The-Federal-Funds-Rate. The irony in the Fed's reasoning for not raising the Fed Funds Rate is the very next day the Labor Department reported Initial Jobless Claims at 277,000 - this is the 66 consecutive week jobless claims have come in under 300,000, which is the longest streak since 1973. Given this, how bad can the labor markets be? Too bad to raise interest rates .25%? Crazy...

Weekly Interest Rate Recap for the week ending 6/24/16

Well, thank you Great Britain for blowing the world’s mind.  Apparently reducing immigration in hopes of saving your identity is more important than any money you may have invested or in savings.  My favorite quote from last week came from an economics professor somewhere in London (you like that detail?  J  ) – “I just suffered a 15% pay-cut over night because of this vote”.  He is referring to the fact that the British Pound is getting CRUSHED on the international equities market.  No one wants Pounds anymore.  And what happens when demand falls?  Prices fall too.  The price of the Pound is falling compared to the rest of the world’s major currencies, therefore that economics professor is simply stating that his purchasing power has fallen to the extent that he just as well have taken a 15% pay-cut pre-vote. 

Long story short, Brexit has opened the door to a TON of uncertainty.  Equity markets hate uncertainty, and so all the money is flowing out of the world’s stock markets and into the safe-haven of US mortgage bonds.  When money flows into the mortgage bond, mortgage interest rates fall. 

I’m sure things will be fine in the long run, but at least in the short run home-buyers/those looking to refinance their mortgage can enjoy slightly lower mortgage interest rates due to Brexit.  That's all for now. Have a great week!

Happy Investing!

Today's blog courtesy of Kyle Bergquist, Guild Mortgage

Federal Funds Rates

Mortgage rates are still low and forecast to remain low for the foreseeable future. Last week mortgage rates improved as traders continued to discount the probability of either a June or July rate hike from the Federal Reserve. Fed Funds are currently showing a 0% probability of a rate hike in today’s FOMC meeting and less than a 16.0% chance of a rate hike in July.

With a rather light week in terms of economic data, this coming week will be focused on the FOMC decision today and news from the UK on Brexit. Today, the focus will not be on whether or not the FOMC raises rates, as it is a forgone conclusion that they will not, but rather on any sense of timing of a future rate hike. As always, expect the FOMC statement to be a bit vague, leaving them flexibility to adjust in the future. 

Brexit will also continue to headline the markets, especially as long as polls show that the June 23 vote is too close to call.

Happy Investing!

Today's blog courtesy of Sarah Riley, Caliber Home Loans

Interest Rates Up

The Federal Reserve raised their funds rate 1/4 of one percent at their December meeting. What does this mean, and how will it affect home mortgages?

Let's give a little background on the Fed:

The Federal Reserve Board (the Fed) controls the Fed Funds Rate and the Discount Rate. These are overnight loans from bank to bank or from the Fed to member banks. The Fed adjusts the rate to influence the economy. For example, if things are going well, a rate increase may slow inflation. If the economy is struggling, a rate drop could be the boost it needs.

Two important things to remember:

- The Fed can influence, but does not directly set, consumer rates.

- The Fed's rates are short term and often do not impact longer term rates, such as mortgage loans.

Why all the fuss?

Increases in the Fed Funds rate can cause banks to raise their “prime” rates, which are often used to calculate costs of revolving credit or home equity lines of credit (HELOCs).

What about mortgages?

Mortgage loans are a different animal, so to speak. The "agencies" (Fannie Mae and Freddie Mac) pool them together and sell them as mortgage bonds. The amount investors pay for these bonds directly influences mortgage rates.

Bottom Line:

When the Fed moves, it generally provides lots of warning, and markets have already had a chance to react. Markets are constantly responding to other factors as well, from the stock market to global events to consumer spending. In the end, no one can say for certain what the reaction to Fed moves will be.

Happy Holidays! Happy Investing!

Today's blog courtesy of Cheryl Taylor, American Pacific Mortgage

Commercial Real Estate Investment

Marcus and Millichap Research Services has released a special report on market volatility and its impact on the future of commercial real estate investment:

■	Recent volatility reflects international uncertainty, not U.S. economic performance.
■	A side benefit of the volatility is that the Federal Reserve may delay rate increases, potentially supporting low mortgage rates awhile longer.
■	Broad-based economic momentum and commercial real estate performance are both exceptionally strong right now, and capital entering the commercial real estate market has risen accordingly.

See the full article here.


Happy Investing!

Mortgage Interest Rates

What a week! Investors had to take cover as several market indexes swooned to depths not seen in quite some time. Stocks responded negatively to China's continued economic woes, the not-entirely-unexpected resignation of Greece's prime minister (although he may be reelected in September), and crude oil hovering around $40. Compared to the August 14 close, the Dow lost nearly 1,000 points--closing down about 6%, Nasdaq dropped close to 7%, and each of the major market indexes are now in negative territory year-to-date.

The price of gold (COMEX) continued trending upward, selling at about $1,159.90 by late Friday afternoon. Crude oil (WTI) prices dropped further, selling at $40.29/barrel by week's end.

The minutes of the July meeting of the Federal Open Market Committee (FOMC) confirmed what had been alluded to by some individual members, including Chairwoman Janet Yellen--the economy in general is moderately gaining and the appropriate time is fast approaching for an interest rate increase. With recent strong economic indicators, the Fed is almost 100% certain to raise rates at any of the remaining meetings in 2015, September, October or December.

Overall, the housing market continued its positive trend. Home builder confidence hit its highest level since November 2005, according to the National Association of Home Builders.

Reaching the highest rate since February 2007, total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, increased 2.0% to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June, according to the National Association of Realtors®.


The NAHB and NAR are reporting higher levels of confidence, that may be driven by fears of increased home mortgage interest rates, the rising rental incomes, or perhaps anticipation that millennials will be jumping in to the market. Whatever the reasons, keep an eye on this blog for the latest breaking economic trends and impact on housing prices.


Happy Investing!


Contributions to today's blog courtesy of Rebecca J. Faught with Waddell & Reed.

Interest Rates To Rise

The Fed has made it clear that it intends to begin raising rates later this year.* 

Now is the time to secure a home mortgage or a lower rate for your home loan.

Reducing your interest rate can:

• Help you save money.
• Decrease the size of your monthly payment.
• Help you buy a bigger house.

**Data source : http://www.bloomberg.com/news/articles/2015-03-23/fed-s-fischer-says-rate-increase-probably-warranted-by-end-2015 March 23, 2015 

Happy Investing! 

Post Election Thoughts

The re-election of Barack Obama as President of the United States has been assured, and whether or not that means new hope or forward momentum, it is clear that American voters picked the leader they most believed would lead us to a better place. Many believe that his policies represent a victory for the middle class. But do they?

As American society becomes more and more polarized by economic and income inequality, our country is compromised. And we are compromised by forces much larger and greater than many of us comprehend. It is almost too much to believe that any one leader can right the wrongs inflicted on the American public for so long.

I am in the midst of reading "The Creature from Jekyll Island," by G. Edward Griffin, a book about the Federal Reserve. And it makes me angrier and angrier the more I understand. Robert Kiyosaki, author of Rich Dad, Poor Dad, describes the book this way:

"This is a murder mystery about the financial 'murder' of the middle class....."

And indeed it is. Here are just a few excerpts:

"The basic plan for the Federal Reserve System was drafted at a secret meeting held in November of 1910 at the private resort of J.P. Morgan on Jekyll Island off the coast of Georgia....[R]ival factions of the banking community had joined together...in restraint of trade....What emerged was a cartel agreement with five objectives: stop the growing competition from the nation's newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayer to pick up the cartel's inevitable losses; and convince Congress that the purpose was to protect the public....As a banking cartel...it [the Federal Reserve] has been an unqualified success.

"The name of the game is Bailout....The objective of this game is to shift the inevitable losses from the owners of the larger banks to the taxpayers."

Sound familiar? The book goes on to give example after example of how this fraud and failure, with corresponding government bailout has played out over and over again, right up to our current economic crisis that began with the housing meltdown.

The book goes on to blame government intervention in the housing markets for distorting free market laws of supply and demand:

"Once the pattern of government intervention had been established, there began a long, unbroken series of federal rules and regulations that were the source of windfall profits for managers, appraisers, brokers, developers, and builders. They also weakened the industry by encouraging unsound business practices and high-risk investments."

And then the pattern of the Federal Reserve has been applied to international monetary policies, with dire consequences for the future of the American middle class. Our future has been mortgaged to the hilt, with unprecedented levels of debt. This book is an eye-opener for anyone who cares about finance, investment and economic welfare. I highly recommend it.

As for our own recent elections: Let's pray for some real hope in the wisdom of our current political leadership. They have their work cut out for them....