In this episode, I meet with Dr. Frank Nothaft, Senior Vice President and Chief Economist at CoreLogic to get his opinion about the federal funds rate increase, and his predictions and outlook for the industry in 2017!
[:25] Jennifer introduces this episode's guest — Dr. Frank Nothaft.
[1:29] Who is Dr. Frank Nothaft?
[2:19] The Fed has just hiked the federal funds rate, the rate that banks charge one another for overnight borrowing.
[3:20] Frank shares his outlook for the industry in the next year.
[4:17] Will there be an increase in February, or will it be more likely in the spring market?
[6:20] Does Frank think a specific political party has an impact on rates increasing, or is it merely because of change?
[8:10] Frank expects a 4.5% increase in rates by Q4 of 2017. With all the changes and projection of possible inflation, why doesn't Frank think the rates will increase more than 4.5%?
[11:07] What does Frank think about the use of the Fed dot chart, in assessing where interest rates are headed in the short term?
[14:05] What are the five areas for economic growth in 2017?
[16:01] From the sales perspective, these changes should be seen as opportunities, so do reach out to your clients in these uncertain times, to help them figure out their strategy going forward.
[17:29] Frank gives his predictions for what the HELOC market will look like in 2017.
[19:50] In the last decade or so, the average age of America's housing stock has been getting a little bit older.
[23:01] Multifamily mortgage origination is also going up. Right now, close to $200 billion has come in from multifamily mortgage origination.
[27:58] Rates used to be quite predictable, due to their cyclical nature, but things have become very unpredictable now.
[28:32] What's happening in the rental market?
[32:24] Frank shares other predictions for the industry in 2017.
[36:20] What does Frank see in the situational lending (alternative lending/ subprime) market?
[37:30] What is the effect of higher interest rates going to be on millennials' perceptions?
[40:49] Jennifer has heard that baby boomers downsizing are competing with millennials buying their first homes. How will this play out in 2017?
[44:49] Frank shares some data on how long people own their homes before selling it. Prior to 2005, homeowners had owned their homes for 6 years before selling. After 2005, the length of home ownership has increased to 10 years!
[45:51] How often do homeowners refinance their mortgage loans, given that interest rates have been so low recently?
[47:55] Frank gives us his best wishes and some advice for a prosperous and successful 2017!
[50:08] What's a book that Frank is reading that he would like to share with us?
[52:21] Check out CoreLogic to get your hands on all the wonderful data they have to offer!
Mentioned in This Episode: