Life Lesson – CupOfJoeLuca

How the Economy Impacts Mortgage Rates

As someone who’s thinking about buying or selling a home, you’re probably paying close attention to mortgage rates – and wondering what’s ahead.

One thing that can affect mortgage rates is the Federal Funds Rate, which influences how much it costs banks to borrow money from each other. While the Federal Reserve (the Fed) doesn’t directly control mortgage rates, they do control the Federal Funds Rate.

The relationship between the two is why people have been watching closely to see when the Fed might lower the Federal Funds Rate. Whenever they do, that’ll put downward pressure on mortgage rates. The Fed meets next week, and three of the most important metrics they’ll look at as they make their decision are:

The Rate of Inflation
How Many Jobs the Economy Is Adding
The Unemployment Rate

Here’s the latest data on all three.

1. The Rate of Inflation

You’ve probably heard a lot about inflation over the past year or two – and you’ve likely felt it whenever you’ve gone to buy just about anything. That’s because high inflation means prices have been going up quickly.

The Fed has stated its goal is to get the rate of inflation back down to 2%. Right now, it’s still higher than that, but moving in the right direction (see graph below):

2. How Many Jobs the Economy Is Adding

The Fed is also watching how many new jobs are created each month. They want to see job growth slow down consistently before taking any action on the Federal Funds Rate. If fewer jobs are created, it means the economy is still strong but cooling a bit – which is their goal. That appears to be exactly what’s happening now. Inman says:

“. . . the Bureau of Labor Statistics reported that employers added fewer jobs in April and May than previously thought and that hiring by private companies was sluggish in June.”

So, while employers are still adding jobs, they’re not adding as many as before. That’s an indicator the economy is slowing down after being overheated for quite some time. This is an encouraging trend for the Fed to see.

3. The Unemployment Rate

The unemployment rate is the percentage of people who want to work but can’t find jobs. So, a low rate means a lot of Americans are employed. That’s a good thing for many people.

But it can also lead to higher inflation because more people working means more spending – which drives up prices. Right now, the unemployment rate is low, but it’s been rising slowly over the past few months (see graph below):

It may seem harsh, but a consistently rising unemployment rate is something the Fed needs to see before deciding to cut the Federal Funds Rate. That’s because a higher unemployment rate would mean reduced spending, and that would help get inflation back under control.

What Does This Mean Moving Forward?

While mortgage rates are going to continue to be volatile in the days and months ahead, these are signs the economy is headed in the direction the Fed wants to see. But even with that, it’s unlikely they’ll cut the Federal Funds Rate when they meet next week. Jerome Powell, Chair of the Federal Reserve, recently said:

“We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy.”

Basically, we’re seeing the first signs now, but they need more data and more time to feel confident that this is a consistent trend. Assuming that direction continues, according to the CME FedWatch Tool, experts say there’s a projected 96.1% chance the Fed will lower the Federal Funds Rate at their September meeting.

Remember, the Fed doesn’t directly set mortgage rates. It’s just that whenever they decide to cut the Federal Funds Rate, mortgage rates should respond.

Of course, the timing of when the Fed takes action could change because of new economic reports, world events, and other factors. That’s why it’s usually not a good idea to try to time the market.

Bottom Line

Recent economic data may signal that hope is on the horizon for mortgage rates. Let’s connect so you have an expert to keep you up to date on the latest trends and what they mean for you.

Pets and Home Value

So you want to buy a new home…but before you can do that you need to sell your current home. If you have pets there is one important step you should consider taking before you begin showing your home. Ask your REALTOR® if they notice any pet-related odor. Time and time again studies show that when we are continually exposed to certain orders we become desensitized to them and no longer noticed them. Have you ever visited someone’s home who has cats and you walk in the front door and immediately you said yourself: “oh, I smell cats”. Chances are that the pet owner doesn’t notice that odor, and yet they have been living with it for years.

If there is a pervasive odor that is noticeable as soon as guests enter the house, what can you do? Deodorizers and scented-candles simply “mask” the source of the odor, they don’t remove and eliminate it. For me, deodorizers and scented-candles can be a telltale sign that there is something else going on in the house.

One of the first things I do as a Buyer Agent when I walk into a home is to take a deep breath. What I smell tells me a lot about the house…and its occupants. If I smell cigarette smoke, mold, or pet odors, it is an immediate “red flag” that I will ring to the attention of my Buyers. Why? Because it is going to be an added expense to get that smell removed, and it could indicate other deferred maintenance issues lurking within.

Usually, I ask my Buyer: “If there were to be a lingering smell post-closing, would that be an issue?” If the answer is yes they need to consider retaining the services of Green Home Solutions to remove the odor or remove the house from consideration.

Green Home Solutions uses a fine spray that is free of harmful chemicals and uses fast-acting enzymes that bind to and neutralize odor molecules. No perfumes or masking agents are ever used.

Conversely, you just moved into a new home and you want to avoid that “Pet Odor” from enveloping guests as soon as they enter. You love your pet(s) so getting rid of them is out of the question…what can you do? The old adage “An ounce of prevention is worth a pound of cure” is very appropriate in this instance.

There are certain things you can do to mitigate the smelly situation. Whether switching to a premium pet food, or to premium cat litter, you can proactively address the problem. Premium pet foods and cat litter have the potential to literally save you thousands when you sell your home. If you are preparing to put your house on the market the above applies to you too.

How can a Premium Pet Food help me when I sell my house?

If you feed your pet a premium pet food, they will not have to eat as much food because they will receive more than enough nutrition from a smaller amount of food. Additionally, since your pet is eating less food, they will have fewer bowel movements. That means less pooper-scooping in the yard, less residual waste, or smaller poops in the Litter Box. If there are fewer “land-mines” in the yard, and less “poop” in the litter box, that means there is less a chance that someone will “step-in-it” and less of a chance that the house will smell from your cat doing its business.

Cat litter can affect the sale of my house???

Most definitely. As the owner of two indoor cats, I know from first-hand experience. Over the years I have been in thousands of houses and all too often, you can tell the houses that have cats immediately upon entering. There is that “ammonia smell” that identifies the house as a “cat house”. There are some new, specialized premium cat litters that prevent that ammonia stench. The best one I’ve found and use is Lucy Pet’s Cats Incredible Litter, it may cost a bit more but you will notice that there is NO ammonia smell; even if you wait a whole week to change your litter box…I know I tested it and use it in my home. It still “clumps” so it is easy to clean, and it works well with multiple cats.

While neither of these products is the cheapest, they aren’t the most expensive either. Every time I change the cat litter, I find that the extra upfront cost is well worth it because it is much less unpleasant. I was impressed that there are companies that make specialized products for pets and in the case of Lucy Pet, I was also impressed to find they make some really great high-end specialized pet food as well. My friends with dogs feeding Lucy Pet dog food find that their pets shed less, there are fewer, and less-stinky, “land-mines” in the backyard, and their pets just look healthier overall. The lesson here is that just because you have pets you don’t have to let that interfere with, or potentially decrease the selling price of your home. … Aside from the fact that as pet lovers we all want to give our pets the very best, there really are benefits not only to their health but to the condition of your home. Your pets, and your home are worth the small investment.

Why We Celebrate Veterans Day

A little History: For those of you unaware and interested, Veterans Day was originally known as “Armistice Day” beginning on Nov. 11, 1919, the first anniversary of the end of WWI. In 1926, Congress passed a resolution making it an annual observance, and Nov. 11 became a national holiday beginning in 1938. Unlike Memorial Day, Veterans Day pays tribute to all American veterans —living or dead—but especially gives thanks to living veterans who served their country honorably during war or peacetime. Today it is not uncommon to have veterans from WWII, Korea, Vietnam, Persian Gulf War, and the Iraq and Afghanistan wars…in the same family. They all deserve our gratitude and respect. We must, individually and collectively, Never Forget.

Veterans Day Highlights

Veterans Day occurs on November 11 every year in the United States.
In 1954, President Dwight D. Eisenhower officially changed the name of the holiday from Armistice Day to Veterans Day.
In 1968, the Uniform Holidays Bill was passed by Congress, which moved the celebration of Veterans Day to the fourth Monday in October. The law went into effect in 1971, but in 1975 President Gerald Ford returned Veterans Day to November 11, due to the important historical significance of the date.
Great Britain, France, Australia, and Canada also commemorate the veterans of World War I and World War II on or near November 11th: Canada has Remembrance Day, while Britain has Remembrance Sunday (the second Sunday of November).
In Europe, Great Britain and the Commonwealth countries it is common to observe two minutes of silence at 11 a.m. every November 11.

Who are Today’s Veterans?

The military men and women who serve and protect the U.S. come from all walks of life; they are parents, children, grandparents, friends, neighbors and coworkers, and are an important part of their communities. Here are some facts about the veteran population of the United States:

16.1 million living veterans served during at least one war.
5.2 million veterans served in peacetime.
2 million veterans are women.
7 million veterans served during the Vietnam War.
5.5 million veterans served during the Persian Gulf War.
Of the 16 million Americans who served during World War II, about 558,000 are still alive.
2 million veterans served during the Korean War.
6 million veterans served in peacetime.
As of 2014, 2.9 million veterans received compensation for service-connected disabilities.
As of 2014, 3 states have more than 1 million veterans among their population: California (1.8 million), Florida (1.6 million) and Texas (1.7 million).
The VA health care system had 54 hospitals in 1930, since then it has expanded to include 171 medical centers; more than 350 outpatient, community, and outreach clinics; 126 nursing home care units; and 35 live-in care facilities for injured or disabled vets.

If you enjoy the right to vote, speak freely, assemble, own a firearm, or choose a religion (or not,) You need to Thank A Vet.

We All Must Never Forget…Freedom is NOT FREE.

Dancing With The Stars – The Path To Excellence

Much to my surprise, a few seasons ago I started watching Dancing with The Stars on TV. Since then I have witnessed many “Stars” succeed on the Path To Excellence. Initially I watched it out of curiosity; “I wonder how foolish these people are going to look?” To my surprise it was entertaining and I continued to watch every week, and now I watch it quite consistently – which is saying a lot since my TV selections are usually limited to news shows and the History Channel. Looking back over the previous seasons, I have always had a favorite contestant. Usually it is obvious which one or two contestants are not going to last too long, but after that it, it gets interesting. It is often very impressive, and illustrative, to see which contestants improves, and how much, from one week to the next. What I have found is that every season there are one or two contestants who are horrible dancers and who I would have figured would not last to the final weeks – but they prove me wrong. Whether this can be attributed to the Professionals’ coaching ability, the competitive atmosphere or something else I am not sure, but it is truly amazing that some “knucklehead” guy or a woman who does not appear to have a graceful bone in her body, can improve so much and actually be a joy to watch. Additionally, the contestants in the final weeks typically seem to be genuinely “nice” – the ones with bad attitudes having been voted off. Whether it is a professional athlete with the “Bad Guy” reputation or a reality TV star who has never demonstrated any sense of etiquette or class, it is truly impressive to watch them “blossom” into a ballroom dancer with grace and musicality. They do more than learn “the right steps”, they develop a fundamental understanding of the art of ballroom dancing – perhaps the “Zen” of Ballroom. this puts them on the Path To Excellence. Some of the qualities the best contestants embody are courage (to try and dance,) confidence (they can pull it off,) perseverance (to overcome setbacks,) patience (to improve,) and the integrity to win.
The lesson for the rest of us: Many of us are so busy Doing, that we “Miss-The-Boat” when it comes to “attaining enlightenment” in life – the “Zen” of things. Whether it is working at our job, working to be a better parent and provider, or working to improve at a leisure activity – sometimes we need to take a breath, smell the flowers, or just enjoy that which we are doing. Like the best contestants on Dancing With The Stars, we need to find the Path To Excellence in life. We should strive to have the courage to try, the confidence to do it, the perseverance to overcome failure, the patience to persist until we improve, and the integrity to succeed.

Thanks for stopping by.

May You Be Healthy, Wealthy, and WISE

What Do The Heisman Trophy, & Political Primaries Have In Common?

Headlines from the past several weeks have included: 1) Reggie Bush forfeiting the Heisman Trophy after the revelation of his numerous NCAA violations, (which were at the root of an investigation that cost the University of Southern California heavy sanctions.) As of this writing, according to a Chris Dufresne article in Tuesday’s LA Times , Bush still has not offered up any apology. 2) In the little State of Rhode Island, one Primary Candidate for Lt. Governor, an under-funded, relative unknown, was soundly beaten by another under-funded, relative unknown Candidate. Only days after the Primary, the winner dropped out of the race and threw her support to an Independent Candidate for Lt. Governor. However, what is interesting is the silence from the Party officials in the state- it is deafening. 3) In the Great State of Alaska, the loser in a US Senate Primary is embarking on a “write-in” campaign for the General Election because she cannot believe that the people of Alaska don’t want her. 4) In Delaware, The First State, a relative unknown and long-shot, beat an entrenched, well-financed, expected victor who was deemed not to be true to his Party’s Platform. The loser, and many of his Party’s Leaders, have yet to support the Victor.
What do all of these “events” have in common? Duplicity, fraud, hypocrisy – The reader can decide which most aptly fits each. What is unfortunate is that these instances of deception and fraud are being perpetrated on a public that is “innocent”, and occurring in areas of our culture that one would, perhaps naively, think should be immune to such trickery. All too often, people today “pose” to be something they aren’t and with a “wink and a nod” those in power look the other way so the fraud can be perpetrated and those in power can retain their power.
According to the NCAA.org website, the Core Purpose of the NCAA “is to govern competition in a fair, safe, equitable and sportsmanlike manner, and to integrate intercollegiate athletics into higher education so that the educational experience of the student-athlete is paramount.” In spite of this, college football has become a Big Business; player’s Agents are virtual “King-Makers” and will do what they can to assure their own financial future by way of young athletes’ allegiance and fealty. How did we get from that Core Purpose to Reggie Bush having to forfeit the Heisman Trophy and USC receiving heavy sanctions? When did we exit the path of righteousness?
Public Service is all but absent from politics today; those that have political power, whether they are elected or not, are unwilling to relinquish it. Party name does not matter, once the “outsiders” gain power and are “insiders”, they do not want to relinquish it, even to their own Party. Which is why today, there are bigwigs in a major political party who are cannibalizing newcomers so they can retain their own grip on power. Ideology has nothing to do with what these bigwig politicians say or believe. Even when these newcomers are more closely aligned with the official Party Platform than the individuals they beat, if they are a perceived threat, they are attacked.
Is this what our Founding Fathers had in mind? Is this what we, the “regular people” want? Or, do we want to demand truthfulness, righteousness and honesty from our athletes, politicians, business and civic leaders? After all, Leadership by a good example is what makes Great Teams, Great Movements, Great Companies, Great Cultures and Great Nations.

Thanks for stopping by.

May You Be Healthy, Wealthy, and WISE