Financial Markets
Stocks finished a horrible week horribly, as the Dow dropped nearly 400 points in just 3 trading sessions. The final blow came in the form of the May jobs report, in which only 83,000 private sector jobs were created, only half of what many analysts predicted. The national unemployment rate lurched up to 9.1% as a result of the lackluster job growth. Analysts attribute the stagnation in job growth to the increase in energy prices (particularly oil) and the catastrophe in Japan.
As a result, the price of oil dropped $2 per barrel to $98. Mortgage rates improved throughout the week, and 30 year fixed mortgages now hover around 4.5%.
Southern Nevada Real Estate and Economy
The day before the national unemployment rate rose to 9.1%, the state unemployment dropped to 12.5%, and Las Vegas unemployment rate dropped to 12.1%. The Southern Nevada Index of Leading Economic Indicators rose .52%, mainly due to the boost in tourism (up 5.6%) and convention bookings. Attached is the article in the Las Vegas Sun that discusses the report in further detail. http://www.vegasinc.com/news/2011/jun/03/economic-indexs-rise-could-signal-las-vegas-job-gr/
Down Payment Assistance Programs:
Primary Residential has brought on its 2nd down payment assistance program this past month, for the Nevada market. In addition to State Bond, we now have the WISH program which offers a 3 to 1 match in down payment for first time home buyers that earn 80% of the median household income or less. This means, that for every $1,000 the borrower puts down, WISH will contribute $3,000, up to $15,000.
Unique Qualifying Method for Investors
PRMI allows using the proposed rental income on the subject property to help qualify for the mortgage, which assists in qualifying from a debt-to-income standpoint. For example, let’s say the investor is purchasing an investment property, but his debt-to-income ratio is already at its limit. Let’s then say that the proposed mortgage for the property the investor is looking to buy is about $1,000 per month. Well, if the rental market analysis comes back with average rents at $1,000 per month, then the borrower essentially is not adding any debt to the debt-to-income ratio analysis. It is an acceptable Fannie Mae guideline that many banks impose overlays to prevent borrowers from using to qualify.
Have a great week!
