Follow up from last week..
Question of the week: No question this week, but see below for follow up from last week’s question and answer.
Answer: Last week the subject of our question of the week was the advice I give clients moving out of state to strongly consider retaining their current homes in Southern California for a period of time after they move.
I received a response from friend and CPA Blake,
“Just one caution for higher net worth clients – CA will factor in the retained house as evidence that the taxpayers have retained their CA “domicile” even though they are no longer “residents”. CA might still tax their income. We are fighting a $250K case like that right now. The taxpayer moved 5 years ago!!”
Great input from Blake, and a reminder that whenever making any large financial moves you consult your tax professional.
Have a question? Ask me!
The Labor Department released data on employment from the month of June earlier today. The two headline numbers, new jobs and unemployment, both showed a very strong labor market. Employers expanded payrolls by 224,000 new hires in June, much more than the 170,000 expected. Hourly wages continued their annual growth rate of 3.1%. The news is somewhat unfriendly to mortgage rates as strong labor markets can, should, lead to higher rates.
An easing of tension between the United States and China, as both sides have agreed to forestall additional tariffs as trade talks continue, also puts upward pressure on rates. The trade tension has caused many companies and investors to show a lot of restraint in new investments and expansion. A pull back of tariffs and a solid trade agreement with China should support stronger economic growth for both nations.
Rates for Friday July 5, 2019: Holidays lead to many major decision makers for major investors heading out to the Hamptons for prolonged weekends, leaving more junior traders in charge with instructions, “don’t screw up.” This tends to lead to moving funds to cash, which generally leads to downturns in daily markets. Today mortgage markets pushed rates higher and we are up from last Friday.
FIXED RATE MORTGAGES AT COST OF 1.25 POINTS LOCKED FOR 45 DAYS:
30 year conforming 3.75% Up 0.125%
30 year high-balance conforming 4.00% Up 0.125%
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down with 740 FICO score for purchase mortgages.
Was your Independence Day as exciting as mine? I had a small dumpster delivered on Wednesday for the purpose of filling it with limbs, branches, creeping vines, plants and other vegetation as we clean up the homestead. Yesterday was the first day of the project and project it to continue for the next few days. Nothing says celebration like being a on ladder with a chain saw!
I hope you and your family had a wonderful 4th of July.
Have a great week,
Dennis
Past Weekly Rate & Market Updates can be found on my blog page at my website www.DennisCSmith.com/my-blog
