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January 31, 2018

GDP Sings Sweet Song in 4th Quarter – Market Update

Bruno Mars had a really good night at the Grammys Sunday, sweeping all the top categories, including record, album and song of the year.

Bruno may have “24K Magic,” but the stock market has its own answer, with the Dow Jones industrial average in the 26K range.

Headline News
MBA Mortgage Applications
A push toward higher rates in recent weeks seems to have pushed the demand for mortgage applications up as people are locking the rates they like. The average rate on a 30-year fixed mortgage was up three basis points to 4.36%, the highest it’s been since March, according to the Mortgage Bankers Association.

Despite this, overall applications were up 4.5% last week ,with refinance applications rising 1% and purchase applications up 6.0% on the week.

FHFA House Price Index
Prices rose 0.4% nationwide in the month of November, according to the Federal Housing Finance Agency (FHFA). Prices are appreciating at a rate of 6.5% year to year.

The West North Central region had the strongest monthly performance, gaining 0.9% in November. This was followed by the South Atlantic at 0.8%.

It wasn’t all rosy, as the East South Central region fell 1.1%, and New England was down slightly, declining 0.1%.

Looking at annual rates, the Mountain region is up 8.9%, with the Pacific following at 8.6%. Homes in the Mid-Atlantic bring up the rear, with a 4.2% yearly gain.

Existing Home Sales
December wasn’t a great month for existing home sales, as they fell 3.6% on the month to a seasonally adjusted annualized rate of 5.570 million. However, part of this may be the fact that November was the best month since the last recession, according to this report from the National Association of REALTORS®.

Lack of supply is still a problem. It fell 11.4% to 1.480 million and is down to 3.2 months if sales continue at the current pace. Buyers just aren’t finding the homes they want. Median prices fell 0.2% to $246,800 but are still up 5.8% on the year.

Sales of existing homes are only up 1.1% on the year at this point.

Jobless Claims
Initial jobless claims were up 17,000 to 233,000 last week. Despite this, the four-week moving average was down 3,500 to 240,000.

It was a good week for continuing claims, down 28,000 to 1.937 million. The four-week moving average of continuing claims was down 3,500, coming in at 1.920 million, according to the Department of Labor.

New Home Sales
New home sales were down 9.3% to an annual rate of 625,000 on a seasonally adjusted basis. This is despite supply being up 3.9% in the market.

The supply issue may be getting better on the new home front. It’s up from 4.9 months in November to 5.7 months in December. For context, six months’ supply in the market is considered by analysts to indicate balance.

The median price of a new home was up 0.1% to $335,400, up just 2.6% on the year. However, there’s speculation that prices may be able to move up more, as sales were up 14.1% annually in December.

Durable Goods Orders
Grammys are probably considered a durable good. They just sit in the trophy case, after all. There were 350 trophies prepared for last year’s show. Bruno Mars may have been prophetic with his hit song because Grammys are plated in 24-karat gold.

There’s no word on how much Grammy production might have contributed to this, if at all, but durable goods orders were up 2.9% in December and have risen 11.5% on the year. A big part of this bump was that aircraft orders were up 1.5% after rising 24.4% the month previously. Vehicle orders were also up 0.4%.

However, excluding transportation, orders were up just 0.6% on the month and 8.2% on the year. Despite orders of capital goods falling 0.3% for an 8.4% annual gain, orders of machinery were good, as were orders of primary metals and fabricated materials.

The weakness in capital goods production is due to weakness in electrical and communications equipment and computers. Orders of communications equipment fell 6.1% on the month.

Gross Domestic Product (GDP)
The economy grew at a rate of 2.6% on a seasonally adjusted annualized basis in the fourth quarter. Prices were up 2.4% in the quarter. Finally, in a strong positive, consumer spending was up 3.8%, a strong holiday season.

Residential investment was up 11.6% on an annual basis in the quarter, and there was a 14.2% increase in spending on durable goods. Nonresidential fixed investment was also up 6.8%. Finally, government purchases saw a 3.0% increase.

On the negative side, net exports did decrease, with the trade deficit coming in at $652.6 billion. Inventories also increased at a slower pace than last quarter.

International Trade in Goods
The U.S. goods gap increased by $1.6 billion in December to $71.6 billion. Exports were up 2.7% on the month while imports increased 2.5%.

Exports came in at $137.6 billion, including a 2.7% rise in capital goods exports to $47.6 billion. Consumer goods were also up 2.7% to $17.5 billion.

Unfortunately, consumer goods were also up on the import side, up 6.0% to $55.6 billion. This makes sense with the holidays and was the biggest import driver of note. Imports totaled $209.2 billion.

Mortgage Rates
There can be no doubt about it at this point – mortgage rates are on their way up. While rates are still pretty good at the moment, they’ve risen steadily over the past several weeks. The 10-year treasury is at its highest point since 2014, with people moving their money out of bonds and into stocks as they expect economic growth. This is good for your 401(k), but it makes borrowing money for major purchases more expensive.

If you’re in the market to buy or refinance a home and you see a rate you like, don’t hesitate to lock it. Although no one can predict where rates will go from hour to hour, let alone week to week, the recent trend is not a friend if you’re thinking rates are going to dip.

The average rate on a 30-year fixed mortgage was 4.15%, with 0.5 points in fees, up 11 basis points on the week. This is down from 4.19% at this time last year.

Taking a look at shorter terms, the average rate for a 15-year fixed mortgage with 0.5 points was 3.62%, up 13 basis points on the week and rising from 3.40% at the same time last year.

Closing out rates for the week, the average rate on a 5-year treasury-indexed hybrid adjustable rate mortgage (ARM) with 0.4 points was up six basis points last week to 3.52%. Last year, the rate was 3.20% at this time.

Stock Market
All three major stock indexes hit record highs, led by optimism over a growing economy backed up by Friday’s great GDP report as well as strong earnings in tech and health care.

The Dow finished the week at 26,616.71, up 223.92 points on the day and 2.09% on the week. Meanwhile, the S&P 500 rose 2.23% on the week, up 33.62 points on the day to finish at 2,872.87. Finally, the Nasdaq was up 94.61 points on the day, closing at 7,505.77, up 2.31% weekly.

The Week Ahead
Monday, January 29

Personal Income and Outlays (8:30 AM ET) – This is a measurement of how much consumers are taking in as well as their corresponding spending. This also gives insight into how much is being saved.

Tuesday, January 30

S&P Case-Shiller HPI (9:00 a.m. ET) – The S&P Case-Shiller Home Pricing Index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S.

Consumer Confidence (10:00 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The Consumer Confidence Index is based on consumer perceptions of current business and employment conditions, as well as their expectations when considering business conditions, employment and income.

Wednesday, January 31

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

Thursday, February 1

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.

ISM Manufacturing Index (10:00 a.m.) – This index measures the general direction of manufacturing within the U.S. The qualitative survey of purchasing managers looks at production, new orders, order backlogs, inventories and supplier deliveries, among other factors.

Friday, February 2

Employment Situation (8:30 a.m. ET) – The employment situation report measures unemployment in the labor force as well as the sentiments of workers about the job market.

Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.

There’s quite a bit going on this week, including the always important employment situation report. There’s also a Federal Reserve meeting starting tomorrow, and we’ll be sure to keep you abreast of any developments and the effect they may have on mortgage rates.

Although I’ve turned into a total economic nerd in my time here, I completely understand it’s not everyone’s cup of tea. Fortunately, if you subscribe to the Zing Blog below, we have plenty more home, money and lifestyle content where this came from. Let’s continue our celebration of music by taking a look at songs that offer the best financial advice.

If you have rooting interest in the game on Sunday, good luck! Hopefully the rest of us get some good football. If for some reason the game doesn’t hold your attention, there’s always the food and commercials. Have a great week!

Call Michael Hansen at So EZ Mortgage right now 855-955-7639 for a free mortgage consultation for a no cost loan in CA and AZ or email him at

January 30, 2018

What Homeowners Need to Know About the New Tax Law

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act. It amounts to a major rewrite of several provisions of the individual and corporate tax code.

There are several big changes with the new tax bill, and there’s been a ton of analysis around the benefits and downsides of those changes, but we wanted to focus on what it means for current homeowners and those in the market to buy a home in the near future.

There’s going to be a big, bold disclaimer at the bottom of this article because it makes our lawyers (and by extension, me) more comfortable, but before we go any further together, I want to make one point as clearly as possible: While this article lays out several facts about provisions in the new tax law, it is not tax advice. Everyone’s finances are different, and if you’re looking for tax advice, feel free to contact a financial advisor, accountant or other tax preparation professional.

With that out of the way, let’s dive in. All the changes in the tax bill that was just passed took effect on January 1, 2018. This means you won’t have to worry about them until you file your 2018 tax return next year.

However, the calendar turning over does mean that we’ve now entered 2017 tax season. With that in mind, there’s one tax change you should know about for your current 2017 taxes that’s gone under the radar in the midst of all the coverage surrounding the updated tax bill just signed by the president. Let’s briefly touch on that first.

Elimination of Mortgage Insurance Deduction for 2017
Every year, homeowners who have a mortgage receive Form 1098, also referred to as the Mortgage Interest Statement. The mortgage company is required to send you and the IRS this form, which shows how much mortgage interest was paid in a given tax year. If you paid more than $600 in mortgage interest, the interest is fully deductible in most cases.

In the new tax bill for 2018, mortgage interest will still be fully deductible in many cases (subject to new restrictions and limits that we’ll get into below). However, there is an important change that occurred in 2017 for your mortgage insurance deductions that will affect your taxes this year.

Private mortgage insurance payments on conventional loans and mortgage insurance premiums charged on FHA and USDA loans were previously considered tax deductible under the mortgage interest provision. Earlier in 2017, Congress decided not to renew that provision for the 2017 tax year. This means that mortgage insurance payments are no longer deductible, beginning with your 2017 return. So while you may continue to account for your interest deductions, insurance payments will no longer be included.

Let’s take a look at how the new tax law will affect homeowners going forward from the date your current tax bills are due (hint: They’re due Tuesday, April 17, 2018).

Unpacking the New Tax Law
Before we get into what’s changing in the new tax code, we should note that while the portions applying to corporations are permanent, all the items pertaining to individuals, which is what we’re interested in here, have a seven-year lifespan. Those items went into effect on January 1, 2018, and expire at the end of 2025. If the amended portions haven’t been renewed before then, the tax law reverts back to what it was before the amendments.

Here’s what the new law changes regarding taxes and your home.

Increased Standard Deduction
One of the major features of the new tax bill is an increased standard deduction. Although not strictly related to homeownership, it may affect whether you take homeownership deductions that only apply if you itemize your taxes.

Under the new tax law, the standard deduction is $12,000 if you’re single and $24,000 if you’re married and filing a joint return. You can also get $2,000 in tax credits for each child you have and up to $500 for non-child dependents.

This standard deduction is increasing, but personal exemptions that many used to qualify for are going away. Whether you’re a single filer or filing jointly, the increase in the standard deduction will more than cover the size of the old standard deduction, even with all the exemptions you could take. However, there are no more exemptions to add to your standard deduction.

The following deduction changes are specific to homeownership if you choose not to take the standard deduction.

Property Tax Changes
Under the former tax law, you could take full deductions for every dollar of your local, state and property taxes.

In 2018 and going forward, your state, local and real estate taxes are put into one pool for deductibility purposes. Between the three of them, you only can deduct up to a limit of $10,000 total.

Mortgage Interest Deduction Changes
In addition to the mortgage insurance deduction change in effect for the 2017 tax year mentioned above, the tax bill makes several important changes to the mortgage interest deduction provision of the tax code in 2018 and going forward.

Starting in 2018, you’ll be able to deduct mortgage interest on qualifying residences (primary and vacation homes) with total mortgage amounts up to $750,000 for joint filers ($375,000 if married and filing separately). This does mean that if you’re a new homeowner buying a home that’s more on the expensive side, you won’t be able to deduct your full interest amount.

If you closed on the loan for your home before December 15, 2017, you’re grandfathered in under the old limits, which is $1 million for joint filers ($500,000, if married and filing separately).

You used to be able to deduct up to $100,000 worth of interest for a home equity loan. The home equity loan deduction applied to loans taken out in order to do something other than buy , build or improve your home. You could take this deduction if you borrowed from your home equity in order to give a college or retirement fund a boost, for example. As of January 1, 2018, this home equity deduction no longer exists.

Moving Expenses
Under the former tax law, there was a limited ability to deduct moving expenses when the relocation was work-related. Starting this year, this only applies to active-duty members of the armed forces.

Those are the big changes in the new tax law that are impacting homeowners. Here’s more information on this year’s 1098 mortgage insurance deduction elimination.

*Please note that none of this information shall be construed as tax advice. If you’re seeking tax assistance, please reach out to your tax professional or the IRS.

January 25, 2018

Todays No Cost Rates

Current rates for 30 year fixed purchase in AZ or CA based on $450k purchase price with 15% Down, 3.875% Rate and 3.875% APR No Points No Fees, seller pays all seller selected cost. Pricing subject to change. 1/25/2018

Benefits of So EZ Mortgage


Apply Online Using So EZ Application, Make Payments Online, Drop Rate Online


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So Easy Mortgage, Inc., DBA So EZ Mortgage NMLS: Broker: 344532 Officer: 1093652 CalBRE Broker: 01885141 Officer: 01940614 ASDFI: AZ Branch Office: 0123453 CA Broker Office: 0945395 Loan Originator: 0939162 Locations: 244 Juanita Way, Placentia, CA 92870 & 43989 W Palo Abeto Dr. Maricopa, AZ 85138

January 19, 2018

Possible Government Shutdown May Effect 4506-T Orders

It is possible the government may shut down by the end of day today, January 19, 2018. If the government shutdown continues into the following week and beyond, the fulfillment of our 4506-T service will be impacted. The IRS will not be fulfilling requests for transcripts during the shutdown and as a result our turn times will increase in line with the length of the shutdown. 


January 11, 2018

Want to take care of some of that debt that is lingering from the holiday season?

As we roll into the New Year, we wanted to let you know that we will be partnering with a personal loan company, RocketLoans.

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