San Francisco Fed President Cites Concern over Real Estate Prices

Fed: Economy grew modestly in September Source: USA Today The Federal Reserve reported that consumer spending and the housing market accelerated in the past six weeks while the overall economy grew modestly. A strong dollar and low oil prices continued to hamper manufacturers. The Fed said wage growth remained “subdued” in most districts and price pressures were “contained,” giving Fed policymakers little reason to lift interest rates. The Fed is closely scrutinizing the report for signs of a pickup in economic activity and pay growth as it struggles to decide whether to raise its benchmark interest rate before the end of the year.

Getting a mortgage may take longer under new rules Source: CNBC Borrowers are being advised to prepare for delays, have all paperwork ready before even starting the mortgage process, and possibly consider spending the extra money upfront for a longer lock term due to new rules for lenders that went into effect this past Saturday. The goal of the new “Know Before You Owe” process is to make the mortgage process much easier for consumers to understand. This has resulted in all-new paperwork and disclosure rules for lenders. The rules are designed to hold lenders accountable and protect consumers against what happened during the last housing boom.

San Francisco Fed President Cites Concern over Real Estate Prices Source: Urban Land Institute The U.S. economy is entering the seventh year of economic expansion, making it one of the longest expansions in U.S. history, and it is showing good momentum, according to John C. Williams, president of the San Francisco Federal Reserve. At a gathering of the Urban Land Institute, Williams expressed concern about real estate prices. He stated, “I don’t think we’re at a tipping point yet, and I’m not trying to argue that we are in some danger of a crash. But what I’m looking at is what path we’re on and what are the potential potholes that we want to avoid further down the road.” He expects housing prices to ease when rates increase.
What you should know …  While 92 percent of Americans surveyed have researched prices online before purchasing an item, only 30 percent said they look for better prices when shopping for major financial loans, such as a mortgage, according to Lending Tree.  Only 14 percent comparison shop loan products. Lending Tree found that about 32 percent of homeowners looked at only one mortgage rate before buying their home.  Roughly 18 percent stated they never looked for better rates or prices on loans.