Weak economic data and bonds are selling off? Durable Goods Orders missed expectations BIG TIME coming in at -1.4 vs. forecast of +.4; ex-transportation it was -.4 vs. forecast of +.3. This is a big miss and would normally get investors to buy bonds - especially with equities down big this morning. That said, the recent run-up in the bond market, including a +33 basis point day yesterday probably has some traders wanting to take some chips off the table and take some profits.
The FNMA benchmark bond is currently down 19 basis points and the RSI has been overbought for several days now. At 102.31, the benchmark bond is just 4 basis points above the first level of support. Like every Thursday, we get weekly jobless claims numbers tomorrow and we get GDP and Michigan Consumer Sentiment Index on Friday. The bond continues to trend down and is now down 24 basis points - 1 point below the support level.
On a completely different note, rates are still fantastic and there are a lot of reasons why people should own rather than rent. Here is a nice convenient list of tax deductions that people can get if they own their home (sharing this with your clients, whether they bought their home last year or in years past, is a good way to add value and ask for referrals):
on Home Mortgage and Refinancing. If you have bought a home in 2014 by
availing mortgage, then apart from the mortgage interest, you can also
write off the points on your tax return. Simply put, ‘points’ are the
fees you pay to the lender for getting the loan. One point is equal to
one percent of the principal loan amount. The fee varies from one point
to three points depending on the trend prevalent
in the area. Full deduction can be claimed for the points, provided
they pertain to the purchase of the home.
on Home Improvement Loan. Interest on home improvement loan is fully
deductible if the improvement is made in the main home and it enhances
its sale value.
Energy Efficiency Tax Credit. This is a
tax credit the IRS offers you for making your home energy-efficient
by installing equipment that will conserve energy while heating or
cooling your home. Qualified storm doors, energy efficient windows,
insulation, air-conditioning and heating system, etc
are the things that can help save energy and earn you tax credits at
the same time. The lifetime limit of the home energy credit is $500, out
of which only $200 can be used for the windows. This credit is set to
expire on December 31, 2016.
Energy Tax Credit. The Renewable Energy Efficiency Property Credit
refers to the tax credit that you get on installing the equipment that
uses renewable sources of energy, such as the sun, wind, and geothermal
energy. You are eligible to gain this tax credit to the extent of 30
percent of the cost of the following equipment, installation included.
Qualified fuel cell property
Qualified solar electric systems
Qualified solar water heaters
Qualified small wind energy property
Qualified geothermal heat pumps.
Tax. The taxes paid to acquire the property are fully deductible from
the taxable income and the same is reflected in the Form 1040. Transfer
tax arising from the transfer of the property to the new owner is a
very common item.
Redeemable Ground Rents. The redeemable grounds rents can be deducted if you have been paying monthly or annual rentals.
Accrued on a Reverse Mortgage. The reverse mortgages considered as a
loan advance and not an income. Hence, the amount you receive is not
taxable. Any interest, including the original issue discount, accrued
on a reverse mortgage is not deductible until the loan is paid off.
Premium Mortgage Insurance. You may be eligible to claim the deduction for the
Premium Mortgage Insurance (PMI) on your tax return. However, this deduction is set to expire with the tax year 2014.
Make it a great day.